There is yet another program to assist Illinois homeowners facing foreclosure. Just announced this week, the new program is known as the Illinois Hardest Hit program. It aims to help about 15,000 Illinois families. The federal goverment is funding the program with $345 million.
In order for your family to qualify, you must meet the following criteria:
1) You must have had at least a 25% drop in your household income, either due to unemployment or reduced employment (i.e. not being able to work as many hours as you are available), through no fault of your own.
2) Regardless, your family income can be slightly higher than the average income in your area, but no greater than 120% of the median income in your area.
3) The subject property must be in Illinois.
4) The property must be your primary and only residence. Additionally, if there are other people named on the mortgage, the property must be their primary and only residence.
5) Your current cash and other liquid assets cannot be greater than three months worth of mortgage payments.
6) The principal balance of your loan cannot be greater than $500,000.
7) The subject property must be a house, townhome, or condominium. If the property is a multi-unit apartment building, it can still qualify, so long as there are four units or less, and your entire household lives in only one of the units.
8) Your loan must NOT be an interest-only loan or a negative amortization loan.
9) You must not have been convicted of a mortgage-related felony in the last ten years.
10) Your lender must agree to accept payment from the Illinois Hardest Hit program.
If you qualify for the program, you can get up to $25,000 in assistance (depending on where you're located) spread over an eighteen-month period. This $25,000 will be used entirely towards payment of your monthly mortgage. While the money is technically a loan, the entire loan can be forgiven after five years if you follow all of the program's requirements and maintain eligibility. In lieu of receiving monthly mortgage payment assistance, you may qualify for a one-time payment to bring your mortgage current.
If you live in Illinois and are facing foreclosure, consider applying to the Illinois Hardest Hit program for assistance!
Friday, September 23, 2011
Friday, September 16, 2011
Tax Deeds Require Attention to Detail!
If you purchased a property at a tax sale, make sure you give all required notices, or you could be denied your tax deed when the time comes! That's exactly what happened in In re Application of the County Treasurer and Ex Officio County Collector of Cook County, Illinois v. OneWest Bank, 2011 IL App (1st) 101966 (August 25, 2011) Cook Co., 4th Div.
In that case, a homeowner owned a two-flat in the southwest side of Chicago. She failed to pay $1383 in real estate taxes. Ridge TP, LLC purchased the homeowner's taxes at public auction. However, when it came time to petition for the tax deed, the court denied Ridge TP, LLC. The court determined that the proposed tax deed purchaser had not sent the notice of redemption period properly, nor had they exercised proper due diligence in serving notices. Specifically, the proposed tax deed purchaser had not notified the servicer for the lender who had loaned money for purchase of the property. Since all parties having any interest in the property must receive notice, the proposed purchaser's tax deed was denied.
Tax sales are very technical. When you obtain a tax deed, you are essentially taking over a property from the owner, the lender, and possibly an association. If the letter of the law is not followed, courts will deny a tax deed in order to protect other parties' interests in the property!
In that case, a homeowner owned a two-flat in the southwest side of Chicago. She failed to pay $1383 in real estate taxes. Ridge TP, LLC purchased the homeowner's taxes at public auction. However, when it came time to petition for the tax deed, the court denied Ridge TP, LLC. The court determined that the proposed tax deed purchaser had not sent the notice of redemption period properly, nor had they exercised proper due diligence in serving notices. Specifically, the proposed tax deed purchaser had not notified the servicer for the lender who had loaned money for purchase of the property. Since all parties having any interest in the property must receive notice, the proposed purchaser's tax deed was denied.
Tax sales are very technical. When you obtain a tax deed, you are essentially taking over a property from the owner, the lender, and possibly an association. If the letter of the law is not followed, courts will deny a tax deed in order to protect other parties' interests in the property!
Thursday, September 8, 2011
Earnest Money Forfeited Pursuant to a Liquidated Damages Provision
A recent case, Karimi v. 401 North Wabash Venture, 2011 IL App (1st) 102670 (July 26, 2011) Cook Co., 2d Div. demonstrates that earnest money, no matter how much, can be forfeited when a liquidated damages provision is properly enforced.
In Karimi, the buyer contracted to purchase a $2.188 million condominium at Trump Tower in 2003. When the unit was almost ready, as per contract, the seller identified a closing date for October of 2008. At that time, the buyer was unable to obtain financing. The parties agreed to extend the closing date to May of 2009. The buyer was still unable to obtain financing and the condominium did not close. Subsequently, the seller terminated the contract and kept the earnest money (well over $300,000) as liquidated damages pursuant to the contract. The seller later sold the unit for $2.5 million.
The buyer sued for the return of his earnest money. The court found that per the terms of the contract, the buyer was not entitled to his earnest money. The parties had agreed to a liquidated damages whereby buyer would forfeit his earnest money if he did perform his end of the contract. Both parties had taken a risk when they signed the contract. The buyer failed to close as per contract, and the court held that the seller properly kept the earnest money.
When the buyer signed the contract in 2003, he could not have anticipated that the real estate market would plummet by the time his condominium was ready. Unfortunately, when it came time to close, the economy had changed drastically. Regardless, the buyer's contract was still valid and enforceable, and the court felt that the buyer should honor his end of the bargain!
In Karimi, the buyer contracted to purchase a $2.188 million condominium at Trump Tower in 2003. When the unit was almost ready, as per contract, the seller identified a closing date for October of 2008. At that time, the buyer was unable to obtain financing. The parties agreed to extend the closing date to May of 2009. The buyer was still unable to obtain financing and the condominium did not close. Subsequently, the seller terminated the contract and kept the earnest money (well over $300,000) as liquidated damages pursuant to the contract. The seller later sold the unit for $2.5 million.
The buyer sued for the return of his earnest money. The court found that per the terms of the contract, the buyer was not entitled to his earnest money. The parties had agreed to a liquidated damages whereby buyer would forfeit his earnest money if he did perform his end of the contract. Both parties had taken a risk when they signed the contract. The buyer failed to close as per contract, and the court held that the seller properly kept the earnest money.
When the buyer signed the contract in 2003, he could not have anticipated that the real estate market would plummet by the time his condominium was ready. Unfortunately, when it came time to close, the economy had changed drastically. Regardless, the buyer's contract was still valid and enforceable, and the court felt that the buyer should honor his end of the bargain!
Thursday, September 1, 2011
SmartMove Loan Program Offers Assistance to Illinois Buyers
Last month, the Illinois Housing Development Authority (IHDA) announced that $200 million dollars had been committed to the SmartMove loan program, a program designed by IHDA to assist first-time homebuyers and veterans. Where is all this money coming from? Well, to fund the $200 million necessary for this program, the IHDA is selling tax-exempt mortgage revenue bonds to private investors.
If you qualify for the SmartMove program, you could obtain either a 30-year fixed-rate loan, or FHA, VA, or USDA financing. You could also receive up to $6,000 towards your down payment and closing costs. This $6,000 (or lesser amount, depending on how much you qualify for) would be in the form of a 10-year, zero-percent forgivable loan. If your loan requires mortgage insurance, your mortgage insurance rates would be about 1/3 less than the rates offered by conventional sources of mortgage financing.
Of course, you have to meet the requirements. You must be either a first-time homebuyer or a veteran. If you are applying for an FHA, VA or USDA loan, your credit score must be at least 620. If you are applying for conventional financing, your credit score must be at least 660. You must contribute at least 1% of the purchase price, or $1,000, whichever is more, towards your down payment. You will be required to attend homeownership counseling. Income limits apply as well.
SmartMove loans are expected to assist approximately 1,300 families in Illinois buy a home. Let's hope it happens!
If you qualify for the SmartMove program, you could obtain either a 30-year fixed-rate loan, or FHA, VA, or USDA financing. You could also receive up to $6,000 towards your down payment and closing costs. This $6,000 (or lesser amount, depending on how much you qualify for) would be in the form of a 10-year, zero-percent forgivable loan. If your loan requires mortgage insurance, your mortgage insurance rates would be about 1/3 less than the rates offered by conventional sources of mortgage financing.
Of course, you have to meet the requirements. You must be either a first-time homebuyer or a veteran. If you are applying for an FHA, VA or USDA loan, your credit score must be at least 620. If you are applying for conventional financing, your credit score must be at least 660. You must contribute at least 1% of the purchase price, or $1,000, whichever is more, towards your down payment. You will be required to attend homeownership counseling. Income limits apply as well.
SmartMove loans are expected to assist approximately 1,300 families in Illinois buy a home. Let's hope it happens!
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