I would think the costs would vary greatly on each property, depending on the condition and what is involved to remove the homeowner/tenant in the property....I would call a foreclosure company or a legal firm that handles them for a guestimate....Likely, though, Citicorp is already aware of what the costs will be to foreclose. You may wish to investigate the new housing legislation and see if there is any benefit to you with these new provisions- you may refinance via FHA so long as your lender agrees to write down your note by 15%.
Above all, remember, markets are cyclical- the sun will shine again in PHX, and the market will come back....we just dont know when!
Since I am a Mortgage Lender, I will help you answer your first question. Rates have been trending up since early this year. Rates daily change throughout the day based on the stock and bond market which have a direct impact on 30 year fixed mortgage rates.