Alaska’s real estate prices
Alaska’s median residential real estate prices are generally much higher than the national median price for single-family homes.
According to Yahoo!’s real estate page, the November 2010 median price for a single-family home in Alaska ranged from $259,000-$269,000. This is nearly a 33% increase over the November 2010 national median price of $179,500. Many economists think that Alaska’s sharply higher median residential real estate prices are the result of a dearth of affordable housing in cities that are located close to Anchorage and Juneau. Other economists believe Alaska’s higher median residential real estate prices are the result of a high demand for housing in Alaska’s major cities and Alaska’s higher marginal incomes.
Alaska’s mortgage rates tend to be slightly lower than national mortgage rates for a variety of reasons.
For example, Alaska’s 15 and 30-year fixed mortgage rates tend to be slightly lower than the national average because the per-capita demand for fixed-rate mortgages tends to be slightly lower than in other parts of the United States. In addition, Alaska’s 1, 3 and 5-year adjustable rate mortgages tend to be slightly lower than the national average because most Alaska residents seem to convert these mortgages into more traditional fixed rate mortgages. Finally, Alaska’s jumbo rate mortgage rates tend to be lower than most national jumbo mortgage rates because Alaska seems to have a slightly lower jumbo mortgage default rate.
Alaska’s most popular cities
Fairbanks is located inside the heart of Alaska’s Tanana Valley. It is popular with many tourists who travel each year to relive the area’s Gold Rush days. It is also a popular destination and travel hub for locals who work at the nearby North Slope oil fields.
Seward is located about 2 hours south of Anchorage. It is a popular tourist spot in the summer because the area’s verdant forests, warm sunshine and fantastic festivals are popular with many people. In addition, Seward’s proximity to the Alaska Railroad and several small shopping districts make the area popular with many locals who travel to the area during the spring and summer.
Alaska also features two cities that are growing despite the country’s current economic woes.
Wasilla is located about eight hours southeast of Anchorage. Its population grew by more than 5% over the last five years because many people from near-by Juneau are taking advantage of Wasilla’s affordable housing and convenient location. Furthermore, Wasillia is also experiencing fantastic growth because its timber, mining and concrete industries are experiencing record demand for their products from local and international governments.
Anchorage has experienced rapid population growth because its business-friendly tax regulations and the US government’s expanded presence in the area have brought more people to the area. In addition, many newcomers are taking advantage of the growth in Anchorage’s petroleum industry to find high-paying jobs that often lead to satisfying careers.
Alaska’s Mortgage Types
Most of Alaska’s home loan contracts are deeds of trust instruments. Alaska’s contract laws require lenders who issue deeds of trust to provide specific details about the location of the property, the owner of the property, the maturity of the loan, who is responsible for paying the loan and how the property is actually used to secure the loan. These stipulations are important to consider because they govern how a home can be legally foreclosed upon if homeowners fail to make their mortgage payments in a timely manner. As a result, most home loan providers in Alaska prefer to offer home buyers deeds of trust. This especially true nowadays because most deeds of trust tend to be easier to govern during the foreclosure process.
However, some older Alaskan home loan contracts could be classified as mortgages. This is especially the case for many home refinance loans issued between 1940-1990 because Alaska’s home loan statues had different criteria that were used to classify home loan contracts. As a result, people who are interested in obtaining older foreclosed homes that have refinance loans attached to their liens should study the homes’ loan histories to determine if a mortgage governs the home’s rules for foreclosure.
In addition, most Alaska deeds of trust are non-recourse loan contracts. As a result, most lenders often have problems recovering the difference between the value of a home loan and the price they receive from a home that has been sold at a foreclosure auction. This is the case because Alaska’s strict anti-deficiency statutes preclude a lender from recovering a deficiency judgment against a borrower unless the lender is able to obtain a non-judicial foreclosure on a home.
Therefore most Alaskan home loan providers find it prudent to understand how Alaska’s home foreclosure process works.
Alaska has procedures for judicial and non-judicial home foreclosures. Each process has its own special set of rules and regulations that make them unique.
Alaska’s foreclosure laws
Alaska’s non-judicial foreclosure process is preferred by most borrowers. This is true because Alaska’s non-judicial foreclosure process gives borrowers options to cure defaulted home loan contracts.
This is the case because Alaska’s non-judicial foreclosure process gives borrowers many opportunities to stop the foreclosure process by making payments in a timely matter.
Alaska’s non-judicial foreclosure process
- A lawyer who represents the lender must file a lawsuit to ask for the formal right to foreclose on a property. This process is usually carried out in one Alaska’s district courts. The lawsuit must be filed because the court must decide if a formal “power of sale” clause is included among the documents that govern the borrower’s deed of trust or mortgage.
- If such a “power of sale” clause exists in the home loan documents, the lender is required to follow Alaska’s Power of Sale Foreclosure Guidelines.” These guidelines govern how a lender can legally sell a foreclosed home using Alaska’s non-judicial foreclosure statues.
- Alaska’s Power of Sale Foreclosure Guidelines state that if the power of sale clause includes clear and specific instructions for selling the home then those instructions must be followed as long as they follow Alaska’s minimum protection laws.
- If the power of sale does not include clear and specific instructions to govern the sale, a judge will order a foreclosed home to be sold using these steps:
- The trustee must file a default notice at the county records office in the borough in which the property is located. The notice must include the borrower’s name, an accurate description of the property, the location of where the deed is recorded, the nature of the default, the amount the borrower owes. It must also include a formal notice that the lender wishes to sell the property at a specified time, date and place.
- This notice must be provided after at least thirty days after the default has been noted and at least three months before the home’s sale. This provision gives the borrower time to attempt to rescue, or “redeem”, the home loan contract by making sufficient payments to clear the default that exists on the contract.
- The lender must send a copy of this notice via certified mail to the borrower, to any occupants living in the home and to any person who might have a legal claim against the home. This must be done within ten calendar days after recording the notice of default.
- At any time before the sale, the borrower may cure the default by handing over a sufficient sum of money equal to the missed payments plus any attorney fees that were incurred. Furthermore, the lender is not allowed to force the borrower to pay off the entire loan balance to cure the default.
- If the lender has already recorded at least two default notices against the same borrower on the same property, the lender is allowed to refuse to accept the borrower’s missed payments and may proceed with the foreclosure sale instead.
- If the sale occurs, it must be a public auction that is located in front of the superior court in the borough where the home is located. The person representing the lender must sell the property to the highest bidder. Furthermore, the lender may also bid for the home during the auction to purchase the property outright.
- Bidders may start the bidding at $1.00 for the property. Winning bidders may pay for the home with a cashier’s check, cash, or via bank transfer.
- The trustee may postpone the sale by sending to the auctioneer handling the sale a written request to postpone the sale of the home until a later time. The person conducting the sale must publicly announce the postponement of the sale to everyone involved. This procedure must be followed for all subsequent postponements.
- Furthermore, the lender may not sue the borrower for a deficiency payment if the sale price is less than the amount owed on the loan.
Alaska’s judicial foreclosure process is preferred by most lenders because they tend to have more recourse. Here is how Alaska’s judicial foreclosure process works:
- A lawyer who represents the lender must first file a formal complaint of default at a courthouse located inside the same borough where the home is located.
- The lawyer must then file what is called a “lis pendens” lien on the property. This lien is used to prevent the homeowner from selling the property. This document is a special kind of lien that tells people who are interested in the home that their rights to the property will be subject to the outcome of the pending litigation.
- Next, the court must issue a formal notice via certified mail to the borrower stating that foreclosure proceedings have begun. In addition, a formal notice must also be sent to any occupants living in the home and to any person who has a claim against the property. This must be done within ten calendar days after the lis pendens lien is issued.
- The notice must provide information to the borrower stating the nature of the default, the amount that is owed and the time and location of the foreclosure proceedings.
- If the lender wins the right to foreclose on the home, the court sets up a date to sell the home.
- Borrowers may not try to “cure” their defaulted contracts if the court finds in favor of the lender.
- The sale of the home is governed by the same Power of Sale Foreclosure Guidelines that were outlined above.
- Finally, borrowers may sue for a deficiency judgment against the borrower whenever a foreclosed home’s auction price is smaller than the amount of the original loan.
As a result, borrowers must make sure they can afford a mortgage payment to avoid the possibility they could default on a loan in Alaska.