Monday, December 30, 2013
HUD Decreases FHA Loan Maximum Limits
If you are looking to get and FHA-insured loan for a higher-priced purchase in 2014, you may be out of luck. HUD has announced new maximum limits for the 2014 calendar year. The maximum FHA-insured mortgage loan in 2014 will be $625,500. That's nearly a 15% decrease from the amount currently allowed, $729,750. 650 counties throughout the country will be affected. Standard streamline refinances that meet all of the other requirements will not be affected by this decrease.
Thursday, December 26, 2013
New Online Tool to Help Find Housing Counseling Services
Last month, the Consumer Financial Protection Bureau announced a new tool to assist homeowners in anticipation of the new mortgage rules taking effect in January 2014. The purpose of the tool, which can be accessed here, is to connect homeowners with local housing counseling agencies. Effective January 10, 2014, mortgage lenders will be required to give mortgage applicants a list of housing counseling agencies. In case they do not have their own lists available by that time, they can use the tool provided by CFPB.
The new online tool will help homeowners and home buyers find the closest HUD-approved counseling agencies. It will also list the languages spoken at each agency, as well as list the specific services available there.
The new online tool will help homeowners and home buyers find the closest HUD-approved counseling agencies. It will also list the languages spoken at each agency, as well as list the specific services available there.
Monday, December 16, 2013
FHA Requires Lenders to Self-Report
Lenders who are FHA-approved and lend on single-family property now face a new set of reporting requirements. Effective last month, lenders must report "material findings" of suspected fraud or material misrepresentation, discovered through the lender's quality control process, directly to the Federal Housing Administration. The lender must also disclose what the lender is doing to resolve the issue. Any issues that have already been resolved need not be reported.
So, what's a "material finding"? A material finding is any finding that would have caused the lender to disapprove the loan or not request an FHA endorsement had the lender discovered the material finding before the loan was approved. For example, if the borrower would not have qualified under FHA guidelines but was approved anyway because of the lender's failure to verify his eligibility, income, employment, credit, or the appraisal of the house, that would constitute a "material finding". If the home the borrower purchased was not repaired to FHA standards even though the appraisal noted significant deficiencies, that would be a "material finding" as well.
If lenders fail to report such material findings to the FHA, they are subject to administrative action.
So, what's a "material finding"? A material finding is any finding that would have caused the lender to disapprove the loan or not request an FHA endorsement had the lender discovered the material finding before the loan was approved. For example, if the borrower would not have qualified under FHA guidelines but was approved anyway because of the lender's failure to verify his eligibility, income, employment, credit, or the appraisal of the house, that would constitute a "material finding". If the home the borrower purchased was not repaired to FHA standards even though the appraisal noted significant deficiencies, that would be a "material finding" as well.
If lenders fail to report such material findings to the FHA, they are subject to administrative action.
Monday, December 9, 2013
Alternative Energy Tax Credits Available Through 2016
If you are making, or thinking about making, certain large-scale alternative-energy improvements to your home, there's good news for you. You can get a tax credit for 30% of the cost of these improvements. And you have plenty of time to make the improvements too -- all the way through 2016. There is no limit on the tax credit for these improvements, except that they cannot exceed 30% of the cost of labor and installation.
To qualify, you must install certain types of equipment, such as solar panels, solar water heaters, wind-energy systems, fuel cells or geothermal heat pumps. More information is available on the IRS' web site.
If you're not making such large changes to improve your home's energy efficiency, you may still qualify for certain tax credits for 2013. Click here for more information.
To qualify, you must install certain types of equipment, such as solar panels, solar water heaters, wind-energy systems, fuel cells or geothermal heat pumps. More information is available on the IRS' web site.
If you're not making such large changes to improve your home's energy efficiency, you may still qualify for certain tax credits for 2013. Click here for more information.
Saturday, November 30, 2013
JP Morgan Chase Settles Toxic Mortgage Claim for $13 Billion
Recently, JP Morgan Chase finally settled a lawsuit alleging that they had sold bonds backed by "toxic" residential mortgages between 2005 and 2008, and misled investors in the process. The settlement amount, $13 billion, includes a $2 billion fine paid to the Department of Justice ("DOJ").
Additionally, a portion of the funds will be used for homeowner relief. Specifically, $500 million are earmarked for loan modifications, and $1.5 billion are meant to be used for principle reductions. $2 billion are set aside to forgive the principal balances on homes that are vacant but are not foreclosed yet, to demolish deserted homes, and to assist low and medium-income borrowers who are trying to finance a purchase. $100 million is coming to Illinois, and other states will divvy up close to $1 billion. The bank has until 2017 to complete the delivery of relief to homeowners and borrowers.
Much of the rest of the money will go to the various regulatory agencies involved, such as state attorney general offices and the Federal Housing Finance Agency, among others.
According to the DOJ, JP Morgan Chase repeatedly misled investors and sold them loans, even when the loans did not meet internal guidelines. The DOJ has insisted that the settlement does not relieve the bank's employees of wrongdoing or potential criminal actions.
Additionally, a portion of the funds will be used for homeowner relief. Specifically, $500 million are earmarked for loan modifications, and $1.5 billion are meant to be used for principle reductions. $2 billion are set aside to forgive the principal balances on homes that are vacant but are not foreclosed yet, to demolish deserted homes, and to assist low and medium-income borrowers who are trying to finance a purchase. $100 million is coming to Illinois, and other states will divvy up close to $1 billion. The bank has until 2017 to complete the delivery of relief to homeowners and borrowers.
Much of the rest of the money will go to the various regulatory agencies involved, such as state attorney general offices and the Federal Housing Finance Agency, among others.
According to the DOJ, JP Morgan Chase repeatedly misled investors and sold them loans, even when the loans did not meet internal guidelines. The DOJ has insisted that the settlement does not relieve the bank's employees of wrongdoing or potential criminal actions.
Wednesday, November 27, 2013
Chicago Area Homes Becoming Less Affordable!
Every quarter, the National Association of Home Builders, in conjunction with Wells Fargo, calculates the "home affordability index". The index calculates the median income of families in a given area, and compares it with the median home price in that same area.
For example, for the third quarter of 2013, the home affordability increase for the Chicago area calculated a $73,400 median income and a $210,000 median home price. Based on these figures, only approximately 64% of homes sold in the Chicago area were affordable to families earning the median income. Interestingly enough, in the second quarter of 2013, nearly 71% of Chicago area homes were affordable to the median-income buyer. The latest figures represent quite a drop just over the last three months.
What's causing this drop? Well, most probably it's rising home prices and increased interest rates. Home prices are increasing faster than wages do. Although the winter months are usually the slowest in the real estate market, this year prices are expected to continue to increase regardless. If you're in the market to buy, don't dawdle!
For example, for the third quarter of 2013, the home affordability increase for the Chicago area calculated a $73,400 median income and a $210,000 median home price. Based on these figures, only approximately 64% of homes sold in the Chicago area were affordable to families earning the median income. Interestingly enough, in the second quarter of 2013, nearly 71% of Chicago area homes were affordable to the median-income buyer. The latest figures represent quite a drop just over the last three months.
What's causing this drop? Well, most probably it's rising home prices and increased interest rates. Home prices are increasing faster than wages do. Although the winter months are usually the slowest in the real estate market, this year prices are expected to continue to increase regardless. If you're in the market to buy, don't dawdle!
Sunday, November 24, 2013
Energy Tax Credit Deadline is Soon!
If you have made any energy-efficient home improvements since 2006 and have not claimed a tax credit of $500 or more for them already, you may be eligible for a tax credit of up to $500 for improvements made before the end of 2013. The types of items that qualify are listed below:
1) Up to $300 in materials and labor for some energy-efficient electric water heaters and heat pumps, central a/c units, and biomass stoves.
2) Up to $150 for certain energy-efficient propane, natural gas, or oil furnaces and boilers.
3) Up to 10% of the cost, excluding installation, of some energy-efficient insulation, doors and skylights, and certain metal and asphalt roofs.
4) Up to 10% of the cost up to $200 only, excluding installation, of certain energy-efficient windows.
You will need your receipts and also manufacturer documentation, so keep the paperwork for when you file your taxes!
1) Up to $300 in materials and labor for some energy-efficient electric water heaters and heat pumps, central a/c units, and biomass stoves.
2) Up to $150 for certain energy-efficient propane, natural gas, or oil furnaces and boilers.
3) Up to 10% of the cost, excluding installation, of some energy-efficient insulation, doors and skylights, and certain metal and asphalt roofs.
4) Up to 10% of the cost up to $200 only, excluding installation, of certain energy-efficient windows.
You will need your receipts and also manufacturer documentation, so keep the paperwork for when you file your taxes!
Monday, November 11, 2013
Appellate Court Strictly Interprets Notice Provisions of Property Tax Code
In a case decided just last week on appeal in Illinois, In re Application of the County Treasurer, 2013 IL App (1st) 130103 (November 8, 2013) Cook Co., 5th Division, the potential purchaser of a tax deed lost the property because of a two-day discrepancy in the notice he provided.
In August of 2008, the appellant bought delinquent real estate taxes from 2006 for real estate located in Cook County. In December of that same year, the appellant filed a copy of it's Section 22-5 notice, stating that the property owner had until February 12, 2011 to redeem the taxes. February 12, 2011 happened to be a Saturday.
No one attempted to redeem the taxes, and in August of 2011, the appellant petitioned for a tax deed. Even though all parties were served, no one appeared in court. Regardless, in July of 2012, the appellant's tax deed petition was denied because the final date of redemption was listed as a Saturday on the Section 22-5 notice, instead of the following Monday, February 14, 2011. Under Illinois law, when calculating time frames, if the last day to perform is a Saturday, Sunday or a holiday, the time frame is extended to the next business day.
The appellant filed a motion for reconsideration, was denied, and eventually appealed on various grounds and lost at appeal as well. After extensive discussion, the bottom line is this -- if your Section 22-5 notice puts the last day on a weekend or holiday, your notice is deficient. Period. The court felt that the burden of proper notice was a minimal one for the appellant to meet.
In August of 2008, the appellant bought delinquent real estate taxes from 2006 for real estate located in Cook County. In December of that same year, the appellant filed a copy of it's Section 22-5 notice, stating that the property owner had until February 12, 2011 to redeem the taxes. February 12, 2011 happened to be a Saturday.
No one attempted to redeem the taxes, and in August of 2011, the appellant petitioned for a tax deed. Even though all parties were served, no one appeared in court. Regardless, in July of 2012, the appellant's tax deed petition was denied because the final date of redemption was listed as a Saturday on the Section 22-5 notice, instead of the following Monday, February 14, 2011. Under Illinois law, when calculating time frames, if the last day to perform is a Saturday, Sunday or a holiday, the time frame is extended to the next business day.
The appellant filed a motion for reconsideration, was denied, and eventually appealed on various grounds and lost at appeal as well. After extensive discussion, the bottom line is this -- if your Section 22-5 notice puts the last day on a weekend or holiday, your notice is deficient. Period. The court felt that the burden of proper notice was a minimal one for the appellant to meet.
Thursday, October 31, 2013
FHA Shortens Waiting Period Requirement
Until just recently, if you filed a bankruptcy or lost a home to foreclosure or completed a short sale, the FHA had a fairly lengthy waiting period for you to be eligible for FHA financing for the purchase of another home. If you filed a Chapter 7 bankruptcy, you would have had to wait for two years after it was discharged. If you did a short sale or were foreclosed, you would have to wait three whole years before you could get another FHA loan.
Now, however, those rules have changed. Under the new Back to Work - Extenuating Circumstances Program, you only have to wait one year if you qualify. Do you qualify? Here are some of the criteria:
1. You must have had significant (20% or more) reduction in household income for at least six month, resulting from loss of employment or some circumstance beyond your control. This qualifies as an "Economic Event".
2. Your lender must determine that your earlier financial and credit issues were based on the Economic Event, and that you have now recovered.
3. Your credit must be satisfactory for at least the last 12 months.
4. You must have completed housing counseling.
A new home might be closer than you think!
Now, however, those rules have changed. Under the new Back to Work - Extenuating Circumstances Program, you only have to wait one year if you qualify. Do you qualify? Here are some of the criteria:
1. You must have had significant (20% or more) reduction in household income for at least six month, resulting from loss of employment or some circumstance beyond your control. This qualifies as an "Economic Event".
2. Your lender must determine that your earlier financial and credit issues were based on the Economic Event, and that you have now recovered.
3. Your credit must be satisfactory for at least the last 12 months.
4. You must have completed housing counseling.
A new home might be closer than you think!
Friday, October 25, 2013
Do You Have Grounds for a Property Tax Appeal?
No one ever thinks their real estate tax bill is fair when it comes out. But to determine whether or not you might successfully appeal your taxes in Cook County, look at these things:
1) Check the description of your property. If the county thinks your house is bigger than it is, you have a good shot at appeal. Make sure you can provide blueprints or a survey or an appraisal that shows the size of your home. Of course, if the county thinks your home is smaller than it is, it's probably assessed less than it should be anyway.
2) If your home has been damaged -- water, fire, any kind of significant damage -- that was not accounted for when it was assessed, you can appeal based on that.
3) If your home is in an exceptionally undesirable location (and no, not being able to stand your neighbors doesn't qualify as exceptionally undesirable), you could use that as a basis for appeal.
4) Go online and do some research. If other homes in your area that are about the same size as yours are assessed at least 10% less, you have a basis to appeal. Ideally, these other homes need to be in your neighborhood and have the same neighborhood and property class codes in the county assessor's system.
5) If you recently bought your home, and if it wasn't a short sale or a foreclosure when you purchased it, you can use the HUD or Closing Statement from your closing to show the assessed value should be less than what the county thinks it is.
Of course, you could meet all five of these criteria and still not get your assessed value reduced, but I do think it's worth a shot!
1) Check the description of your property. If the county thinks your house is bigger than it is, you have a good shot at appeal. Make sure you can provide blueprints or a survey or an appraisal that shows the size of your home. Of course, if the county thinks your home is smaller than it is, it's probably assessed less than it should be anyway.
2) If your home has been damaged -- water, fire, any kind of significant damage -- that was not accounted for when it was assessed, you can appeal based on that.
3) If your home is in an exceptionally undesirable location (and no, not being able to stand your neighbors doesn't qualify as exceptionally undesirable), you could use that as a basis for appeal.
4) Go online and do some research. If other homes in your area that are about the same size as yours are assessed at least 10% less, you have a basis to appeal. Ideally, these other homes need to be in your neighborhood and have the same neighborhood and property class codes in the county assessor's system.
5) If you recently bought your home, and if it wasn't a short sale or a foreclosure when you purchased it, you can use the HUD or Closing Statement from your closing to show the assessed value should be less than what the county thinks it is.
Of course, you could meet all five of these criteria and still not get your assessed value reduced, but I do think it's worth a shot!
Monday, October 21, 2013
Lawsuit Alleges Foreclosure Law Violations by Lender-Hired Company
If you were thrown out of your house pending a foreclosure case, this might interest you: The Illinois Attorney General recently filed a suit against Safeguard Properties, a large national company that maintains foreclosed properties for lenders. According to the Illinois Attorney General's office, more than 200 homeowners have complained that Safeguard Properties wrongfully removed their personal property from their homes, even though the homes had not yet been foreclosed, and even had their utilities shut off.
Moreover, Safeguard Properties supposedly told homeowners they could not continue to live in their homes pending foreclosure. Under state law, homeowners are allowed to stay in their homes until the foreclosure process is complete.
The suit also alleges that Safeguard told tenants of properties in foreclosure that they must also vacate. Again, this is a violation of state law, which allows tenants to remain in possession until their lease ends, even if the lease ends after the foreclosure is complete.
Safeguard has announced its intention to defend this suit vigorously. It remains to be seen what happens!
Moreover, Safeguard Properties supposedly told homeowners they could not continue to live in their homes pending foreclosure. Under state law, homeowners are allowed to stay in their homes until the foreclosure process is complete.
The suit also alleges that Safeguard told tenants of properties in foreclosure that they must also vacate. Again, this is a violation of state law, which allows tenants to remain in possession until their lease ends, even if the lease ends after the foreclosure is complete.
Safeguard has announced its intention to defend this suit vigorously. It remains to be seen what happens!
Monday, October 7, 2013
Changes to Loan Modification Policies
After numerous complaints by homeowner's struggling to be compensated or have their loans modified pursuant to the $25 million national mortgage foreclosure settlement, the settlement's monitoring committee finally announced some changes last week. It turns out there are a whopping 304 standards that the banks are supposed to be following, but compliance has been slim
Pursuant to the changes announced last week, all five banks affected by the settlement (Bank of American, JP Morgan Chase, Citigroup, Wells Fargo and Ally/GMAC), will give homeowners 60 days to submit additional loan modification documents before the home goes into foreclosure. Generally, the banks have also stated they will provide better oversight of their employees.
Additionally, Bank of America and Wells Fargo have agreed to the following additional policies: 1) They will have to provide specific information about missing documentation to homeowners. For example, instead of saying they never received "X document", or "X document" is missing, they will have to specify if the document was received but is defective for some reason (i.e. it's not completely filled out, it's not signed, it's not dated, etc.); 2) They will escalate the application of any borrower who has repeatedly been requested to submit the same paperwork; and 3) They will create an online system to communicate directly with housing counseling agencies.
Pursuant to the changes announced last week, all five banks affected by the settlement (Bank of American, JP Morgan Chase, Citigroup, Wells Fargo and Ally/GMAC), will give homeowners 60 days to submit additional loan modification documents before the home goes into foreclosure. Generally, the banks have also stated they will provide better oversight of their employees.
Additionally, Bank of America and Wells Fargo have agreed to the following additional policies: 1) They will have to provide specific information about missing documentation to homeowners. For example, instead of saying they never received "X document", or "X document" is missing, they will have to specify if the document was received but is defective for some reason (i.e. it's not completely filled out, it's not signed, it's not dated, etc.); 2) They will escalate the application of any borrower who has repeatedly been requested to submit the same paperwork; and 3) They will create an online system to communicate directly with housing counseling agencies.
Monday, September 30, 2013
Hardest Hit Program Deadline is Today!
If you were planning on applying to the state's Hardest Hit Program for mortgage assistance, you'd better hurry up. The deadline is today.
When the program started in 2011, eligible homeowners could qualify for up to $25,000 in assistance, although that number was increased to $35,000 earlier this year. Nearly 15,000 people have applied, and almost 60% of those who applied received some assistance. Nearly $122 million were paid out. The good news is that most homeowners who qualified and received assistance continued to own their homes 6 months later.
Based on the information we have now, it appears the program was successful. For more information and to see if you might qualify, click here. If you do apply, act quick. The deadline is today, September 30, 2013.
When the program started in 2011, eligible homeowners could qualify for up to $25,000 in assistance, although that number was increased to $35,000 earlier this year. Nearly 15,000 people have applied, and almost 60% of those who applied received some assistance. Nearly $122 million were paid out. The good news is that most homeowners who qualified and received assistance continued to own their homes 6 months later.
Based on the information we have now, it appears the program was successful. For more information and to see if you might qualify, click here. If you do apply, act quick. The deadline is today, September 30, 2013.
Sunday, September 29, 2013
Changes to Cook County Human Rights Ordiannce
Recently, the Cook County Human Rights Ordinance was modified to prevent landlords from discriminating against tenants using Section 8 or any other housing choice voucher income to pay their rent. Effective August 8, 2013, a landlord can no longer turn down a prospective tenant solely on the basis that the rent will be paid through Section 8 income.
The new rule applies to all landlords -- whether they are leasing a house, a condo, a townhouse, a duplex or an apartment building. The only landlords exempt from the provisions are those who are renting one or more rooms in a home that they themselves occupy.
The ordinance applies everywhere in Cook County except where a local municipality has its own ordinance, in which case the local ordinance prevails. If you are not sure what the rule is in your town, contact your local village hall or city hall for more information.
The new rule applies to all landlords -- whether they are leasing a house, a condo, a townhouse, a duplex or an apartment building. The only landlords exempt from the provisions are those who are renting one or more rooms in a home that they themselves occupy.
The ordinance applies everywhere in Cook County except where a local municipality has its own ordinance, in which case the local ordinance prevails. If you are not sure what the rule is in your town, contact your local village hall or city hall for more information.
Friday, September 13, 2013
Energy Use Disclosure Required For Chicago Building Owners
Pursuant to a new law passed recently by the Chicago City Council, the owners of approximately 3,500 buildings in Chicago will be required to disclose how much energy they use. The goal of this new ordinance is to increase energy efficiency.
The disclosures will then be compiled and scored, and the scores will be public information. If a building's score is poor, they may have trouble finding tenants or buyers. On the other hand, if the building scores well, it could be an added marketing benefit for that building's owners, perhaps helping to lure new tenants and buyers.
The new ordinance covers buildings 50,000 square feet and up. If you have a commercial building greater than 250,000 square feet, the reporting requirement kicks in for you in June 2014. If you have a commercial building that is between 50,000 and 250,000 square feet, you must start reporting in June 2015. Residential buildings are subject to the new ordinance also, but they have an extra year to comply.
The disclosures will then be compiled and scored, and the scores will be public information. If a building's score is poor, they may have trouble finding tenants or buyers. On the other hand, if the building scores well, it could be an added marketing benefit for that building's owners, perhaps helping to lure new tenants and buyers.
The new ordinance covers buildings 50,000 square feet and up. If you have a commercial building greater than 250,000 square feet, the reporting requirement kicks in for you in June 2014. If you have a commercial building that is between 50,000 and 250,000 square feet, you must start reporting in June 2015. Residential buildings are subject to the new ordinance also, but they have an extra year to comply.
Wednesday, September 4, 2013
Failure to Show Up in Court Will Not Help You Defend Your Foreclosure Case
Surprise, surprise. If you don't show up in court to defend your foreclosure, you can't claim the judge treated you unfairly later. A recent appellate case, Deutsche Bank National Trust Co. v. Nichols, 2013 IL App (1st) 120350 (August 30, 3013) Cook Co., 6th Div., serves as a case in point.
In Deutsche Bank, the lender served notice of foreclosure upon the defendant in April 2011. The defendant never responded, and in July 2011, the court entered the bank's motion for default judgment.
In mid-November, the defendant asked for leave to file an answer to the original complaint of foreclosure, but the court denied the defendant's request, since the defendant had been served 7 months ago and judgment of foreclosure had already been entered. The defendant then filed a petition to substitute judges, and set it for January 26, 2012. The bank filed a motion requesting the court to approve the sale of the property, and set it for January 25, 2012.
The defendant did not show up in court on either January 25 or 26, to contest the bank's motion or argue its own motion. The court entered the order approving the sale, and the defendant appealed, on the grounds that the judge lacked the authority to enter the final judgment since the motion for substitution of judges was still pending. After a great deal of analysis, the court pointed out that pursuant to existing law, the filing of a motion to substitute judges does not void any final order. In order to void the final order, the defendant would have to show that the petition to substitute judges was improperly denied.
In this case, the defendant never showed up to argue its motion for subsitution. The motion was never ruled on at all. Therefore it certainly wasn't denied. Bottom line, the court felt that a motion to substitute judges should not be used to delay a case.
What does this mean for you? Well, if you're being foreclosed and you want to contest it, show up in court. Do something about it now before it's too late!
In Deutsche Bank, the lender served notice of foreclosure upon the defendant in April 2011. The defendant never responded, and in July 2011, the court entered the bank's motion for default judgment.
In mid-November, the defendant asked for leave to file an answer to the original complaint of foreclosure, but the court denied the defendant's request, since the defendant had been served 7 months ago and judgment of foreclosure had already been entered. The defendant then filed a petition to substitute judges, and set it for January 26, 2012. The bank filed a motion requesting the court to approve the sale of the property, and set it for January 25, 2012.
The defendant did not show up in court on either January 25 or 26, to contest the bank's motion or argue its own motion. The court entered the order approving the sale, and the defendant appealed, on the grounds that the judge lacked the authority to enter the final judgment since the motion for substitution of judges was still pending. After a great deal of analysis, the court pointed out that pursuant to existing law, the filing of a motion to substitute judges does not void any final order. In order to void the final order, the defendant would have to show that the petition to substitute judges was improperly denied.
In this case, the defendant never showed up to argue its motion for subsitution. The motion was never ruled on at all. Therefore it certainly wasn't denied. Bottom line, the court felt that a motion to substitute judges should not be used to delay a case.
What does this mean for you? Well, if you're being foreclosed and you want to contest it, show up in court. Do something about it now before it's too late!
Wednesday, August 28, 2013
Fannie Mae and Freddie Mac not subject to Chicago Vacant Building Ordinance
The Federal Housing Finance Authority (FHFA) just won a case against the City of Chicago, a case which was filed nearly two years ago, right after the Chicago Vacant Building Ordinance took effect.
The FHFA argued that vacant foreclosed buildings with Fannie Mae and Freddie Mac mortgages should not be subject to the Chicago Vacant Building Ordinance, claiming that the city acted outside of its jurisdiction in making laws applicable to federal agencies, and that the registration fee requir4d by the ordinance was essentially a tax on the federal government.
While Fannie Mae and Freddie Mac have their own standards for the maintenance of vacant buildings, those standards are by no means as stringent as Chicago's ordinance. In Chicago alone, the FHFA owns nearly 260,000 mortgages. Granted, not all of them are vacant or foreclosed, but the decision still has ramifications for Chicago, which is trying to get derelict properties under control.
Spurred on by its success, the FHFA is expected to file more such suits in other areas with vacant building ordinances.
The FHFA argued that vacant foreclosed buildings with Fannie Mae and Freddie Mac mortgages should not be subject to the Chicago Vacant Building Ordinance, claiming that the city acted outside of its jurisdiction in making laws applicable to federal agencies, and that the registration fee requir4d by the ordinance was essentially a tax on the federal government.
While Fannie Mae and Freddie Mac have their own standards for the maintenance of vacant buildings, those standards are by no means as stringent as Chicago's ordinance. In Chicago alone, the FHFA owns nearly 260,000 mortgages. Granted, not all of them are vacant or foreclosed, but the decision still has ramifications for Chicago, which is trying to get derelict properties under control.
Spurred on by its success, the FHFA is expected to file more such suits in other areas with vacant building ordinances.
Monday, August 26, 2013
What is Chicago's Vacant Building Ordinance?
One of the weapons in the city's arsenal to fight foreclosure is the Vacant Building Ordinance. The ordinance aims to keep ownership accountable for the condition of any vacant buildings in the city.
What's a vacant building? Well, according to the ordinance, for a building to be vacant, it has to lack the "habitual presence of human beings who have a right to be on the premises." In English, that means it has to be vacant of people who are actually supposed to be or allowed to be there. Another way to define vacancy is that a property is vacant if there is no legal business or legal construction activity at the premises. Residential apartment buildings are not vacant unless they are at least 90% unoccupied. For an individual residence to be considered occupied, someone must have actually lived there for at least three months out of the last nine months, and intend to return and live there. Otherwise, it shall be deemed vacant.
So let's say the house or building is deemed vacant. Then what? If it is vacant for more than 30 days, the owners must do all of the following:
1) Register the building with the Department of Buildings as vacant property. The registration is for 6 months only, and costs $250. It must be updated every 6 months as necessary. If the building has any code violation at the time of renewal, the renewal fee is $500 instead of $250. And if the building still has violations at the second renewal, the renewal fee is then $750. If the building has violations at the time of the third renewal, the registration fee shall be $1,000.
2) Procure liability insurance and provide proof of the same to the Department of Buildings. For residential property, the minimum insurance is $300,000. For commercial property, the minimum insurance is $1,000,000.
3) Maintain the property all year long. The owner must take care of the roof, the foundation, the stairs, decks, fences, floors, balconies, chimneys, gutters, etc. The owner must also do seasonal work -- weeding and cutting grass in the summer, and snow plowing and winterizing plumbing in the winter. The owner must also keep the property rodent and pest-free.
4) For the first six months, the owner must cover all openings into the property with plywood. For the next six months and thereafter, the openings must be covered with steel, commercial-grade security paneling. If the owner wishes, in lieu of the steel paneling, he may install a burglar alarm, standard security door, and glazed windows.
Fines are steep, so compliance is important!
What's a vacant building? Well, according to the ordinance, for a building to be vacant, it has to lack the "habitual presence of human beings who have a right to be on the premises." In English, that means it has to be vacant of people who are actually supposed to be or allowed to be there. Another way to define vacancy is that a property is vacant if there is no legal business or legal construction activity at the premises. Residential apartment buildings are not vacant unless they are at least 90% unoccupied. For an individual residence to be considered occupied, someone must have actually lived there for at least three months out of the last nine months, and intend to return and live there. Otherwise, it shall be deemed vacant.
So let's say the house or building is deemed vacant. Then what? If it is vacant for more than 30 days, the owners must do all of the following:
1) Register the building with the Department of Buildings as vacant property. The registration is for 6 months only, and costs $250. It must be updated every 6 months as necessary. If the building has any code violation at the time of renewal, the renewal fee is $500 instead of $250. And if the building still has violations at the second renewal, the renewal fee is then $750. If the building has violations at the time of the third renewal, the registration fee shall be $1,000.
2) Procure liability insurance and provide proof of the same to the Department of Buildings. For residential property, the minimum insurance is $300,000. For commercial property, the minimum insurance is $1,000,000.
3) Maintain the property all year long. The owner must take care of the roof, the foundation, the stairs, decks, fences, floors, balconies, chimneys, gutters, etc. The owner must also do seasonal work -- weeding and cutting grass in the summer, and snow plowing and winterizing plumbing in the winter. The owner must also keep the property rodent and pest-free.
4) For the first six months, the owner must cover all openings into the property with plywood. For the next six months and thereafter, the openings must be covered with steel, commercial-grade security paneling. If the owner wishes, in lieu of the steel paneling, he may install a burglar alarm, standard security door, and glazed windows.
Fines are steep, so compliance is important!
Thursday, August 22, 2013
New Law Protecting Illinois Tenants of Foreclosed Properties
Since federal protections for tenants in foreclosed properties are expiring next year, yesterday the governor signed a law extending federal protections for renters in foreclosed buildings in Illinois,
Under the law, if you are renting in a building that has been foreclosed, you are entitled to the following protections:
1) The bank (or a receiver) that owns the foreclosed building, or any other person or entity that buys the building out of foreclosure, must honor your lease until it ends.
2) The bank or owner must give you at least 90 days' written notice before asking you to leave.
3) If the new owner intends to move in, however, he or she can terminate your lease upon 90 days' written notice.
If you are otherwise honoring your lease and the new owner tries to evict you, you can fall back on these protections and file a case against your landlord.
Under the law, if you are renting in a building that has been foreclosed, you are entitled to the following protections:
1) The bank (or a receiver) that owns the foreclosed building, or any other person or entity that buys the building out of foreclosure, must honor your lease until it ends.
2) The bank or owner must give you at least 90 days' written notice before asking you to leave.
3) If the new owner intends to move in, however, he or she can terminate your lease upon 90 days' written notice.
If you are otherwise honoring your lease and the new owner tries to evict you, you can fall back on these protections and file a case against your landlord.
Thursday, August 15, 2013
Foreclosures Decline in 2013
It looks like 2013 might finally be the year that foreclosures start to decline. According to RealtyTrac, nationwide, lenders repossessed over 30% fewer homes last month than they did a year ago, in July of 2012. They also initiated foreclosure proceedings on nearly 40% less homes than they did in July 2012. If you look at how 2013 has gone so far, we have the fewest foreclosures this year since 2007.
Of course, nearly 20% of all homes in the country that have a mortgage are still underwater. In a normal housing market, that number should not be more than 5%. And it's interesting to note, though certainly not surprising, that many of those home loans were made during the real estate boom.
But overall, it's good news for the housing market. As foreclosures decline and get off the market, with any luck housing will start to thrive again!
Of course, nearly 20% of all homes in the country that have a mortgage are still underwater. In a normal housing market, that number should not be more than 5%. And it's interesting to note, though certainly not surprising, that many of those home loans were made during the real estate boom.
But overall, it's good news for the housing market. As foreclosures decline and get off the market, with any luck housing will start to thrive again!
Wednesday, July 31, 2013
What To Do When Your Tax Bill is Wrong
The second installment of Cook County real estate taxes are due tomorrow. If you haven't paid, you better get a move on.
What's that you say? You didn't pay because the bill is wrong? They forgot your homeowner's exemption? They forgot your senior exemption? They forgot your senior freeze? Wow, the county really did it this time, huh? Did you say you were going to have it fixed and then pay the bill? Is that right?
Wrong. You need to pay the bill now. You can go back and "fight city hall", or in this case, Cook County, later. You MUST pay the taxes first. If not, you will be assessed late fees and penalties starting on August 2nd. You will owe the late fees and penalties regardless of how wrong your bill was.
Pay your taxes, and then go back and file a certificate of error for the missing exemption(s). If you qualify for the exemption, eventually you'll get a refund.
What's that you say? You didn't pay because the bill is wrong? They forgot your homeowner's exemption? They forgot your senior exemption? They forgot your senior freeze? Wow, the county really did it this time, huh? Did you say you were going to have it fixed and then pay the bill? Is that right?
Wrong. You need to pay the bill now. You can go back and "fight city hall", or in this case, Cook County, later. You MUST pay the taxes first. If not, you will be assessed late fees and penalties starting on August 2nd. You will owe the late fees and penalties regardless of how wrong your bill was.
Pay your taxes, and then go back and file a certificate of error for the missing exemption(s). If you qualify for the exemption, eventually you'll get a refund.
Monday, July 29, 2013
Take Root Program Aims to Reduce Foreclosures
A new community-based foreclosure prevention and homeowner education project is starting in Chicago. It's called Take Root, and it's already operational in Milwaukee, Denver, and parts of Florida. Chicago is the next step.
Take Root is a Freddie Mac sponsored program. Unlike many other foreclosure prevention programs, however, Take Root teams up with a local community organization, operating on the assumption that local residents might be more comfortable talking to a local organization, rather than the bank or an arm of the government. In Chicago, Freddie mac is working with the Chicago Urban League.
Take Root does not offer money to participants. Rather, it educates homeowners in preventing foreclosure, and also in purchasing a new home. The program has been successful in other cities. For example, in its very first year in Milwaukee, Take Root helped more than 2,000 families avoid foreclosure.
If you need help avoiding foreclosure or advice on purchasing a home, contact the Chicago Urban League for assistance.
Take Root is a Freddie Mac sponsored program. Unlike many other foreclosure prevention programs, however, Take Root teams up with a local community organization, operating on the assumption that local residents might be more comfortable talking to a local organization, rather than the bank or an arm of the government. In Chicago, Freddie mac is working with the Chicago Urban League.
Take Root does not offer money to participants. Rather, it educates homeowners in preventing foreclosure, and also in purchasing a new home. The program has been successful in other cities. For example, in its very first year in Milwaukee, Take Root helped more than 2,000 families avoid foreclosure.
If you need help avoiding foreclosure or advice on purchasing a home, contact the Chicago Urban League for assistance.
Friday, July 19, 2013
Don't Take Multiple Homeowner's Exemptions in Cook County!
If you own a home in Cook County that you don't live in, but are claiming a homeowner's exemption on your real estate taxes, it's time to stop. If you own more than one residence in Cook County and are claiming more than one homeowner's exemption, again -- it's time to stop.
In the past, many people got away with taking multiple homeowner's exemptions. If the county ever caught you, all they did was remove the exemption going forward. They did not penalize you. But not anymore.
Under a new law, the Cook County Assessor's office will fine property owners who claim multiple exemptions. Once the county notifies you that you are claiming too many exemptions, you will have 60 days to pay back the exemptions. If you do not, a lien will be placed against the properties you own that don't qualify for the exemption. As time goes on, the penalties will increase.
The good news is that even if you know you owe exemptions, you do have some time to come clean right now. There is an amnesty period in place until the end of this year. Take advantage of it!
In the past, many people got away with taking multiple homeowner's exemptions. If the county ever caught you, all they did was remove the exemption going forward. They did not penalize you. But not anymore.
Under a new law, the Cook County Assessor's office will fine property owners who claim multiple exemptions. Once the county notifies you that you are claiming too many exemptions, you will have 60 days to pay back the exemptions. If you do not, a lien will be placed against the properties you own that don't qualify for the exemption. As time goes on, the penalties will increase.
The good news is that even if you know you owe exemptions, you do have some time to come clean right now. There is an amnesty period in place until the end of this year. Take advantage of it!
Friday, July 12, 2013
FEMA Extends Deadline for Flood Recovery Assistance
Chicagoland suffered heavy storm damage in April of this year. As a result, the Federal Emergency Management Agency (FEMA) extended flood recovery assistance to area homeowners. Homeowners may receive a grant or a low interest loan for lost property from FEMA and the Small Business Administration (SBA).
The deadline to apply with FEMA passed a couple weeks back, but FEMA has now extended the deadline to July 24, 2013 That gives affected homeowners a few more weeks to apply. In order to apply, you will need your address, a list of everyone who lives in your home, description of the damage, your social security numbers, and your insurance information.
The SBA's filing deadline is actually February 10, 2014. Affected homeowners can borrow up to $200,000 for lost real property, and up to $40,000 for lost personal property. Homeowners and renters will pay a low interest rate, amortized over 30 years, of 1.688%. Small business and non-profits that suffered a loss may also apply, but the interest rate shall be 2.875%.
The deadline to apply with FEMA passed a couple weeks back, but FEMA has now extended the deadline to July 24, 2013 That gives affected homeowners a few more weeks to apply. In order to apply, you will need your address, a list of everyone who lives in your home, description of the damage, your social security numbers, and your insurance information.
The SBA's filing deadline is actually February 10, 2014. Affected homeowners can borrow up to $200,000 for lost real property, and up to $40,000 for lost personal property. Homeowners and renters will pay a low interest rate, amortized over 30 years, of 1.688%. Small business and non-profits that suffered a loss may also apply, but the interest rate shall be 2.875%.
Friday, June 28, 2013
Case Hinging on the Illinois Residential Real Property Disclosure Decided in Favor of Sellers
Under state law, any seller of residential real estate must provide the Illinois Residential Real Property Disclosure to potential buyers. But the report, extensive as it is, does not cover everything. Buyers must be aware of that, and perform thorough inspections to satisfy themselves before moving forward with any purchase.
As you will see in Kalkman v. Nedved, 2013 IL App (3d) 120800 (June 14, 2013) Knox Co. (McDADE), sometimes buyers learn this too late. The Kalkmans found a lakefront home they liked, and decided to purchase it. Their mold inspector discovered the presence of mold, but that issue was resolved between the parties. The home inspector noted a potential problem with the windows, but it appears that the parties did not deem it serious at the time.
The buyers reviewed the Illinois Residential Real Property Disclosure, which stated, among other things, that the sellers had no knowledge of defects in the walls. After the closing, the buyers found a number of leaks in the windows and doors. The buyers sued the sellers, claiming such leaks should have been disclosed, The trial court ruled in the buyers' favor, stating that the language of the disclosure should be interpreted broadly, and that "walls" should include "doors and windows".
The sellers appealed and won. The appellate court found that the statute and the disclosure should be strictly construed. The document does not mention doors and windows, only walls. Since there was no clear case on whether a window or door was considered part of a wall, the court relied on the dictionary definition of a wall, which does not include a window or a door. The court also stated that the legislature could have chosen to make the Illinois Residential Real Property Disclosure more detailed, but they did not.
So the sellers won and the buyers were stuck with their leaky doors and windows. At the end of the day, you cannot rely on any disclosures; they may not be complete, and the court has clearly indicated that it will take a strict construction of the items listed in the disclosure. If you are concerned, make sure you conduct a detailed inspection!
As you will see in Kalkman v. Nedved, 2013 IL App (3d) 120800 (June 14, 2013) Knox Co. (McDADE), sometimes buyers learn this too late. The Kalkmans found a lakefront home they liked, and decided to purchase it. Their mold inspector discovered the presence of mold, but that issue was resolved between the parties. The home inspector noted a potential problem with the windows, but it appears that the parties did not deem it serious at the time.
The buyers reviewed the Illinois Residential Real Property Disclosure, which stated, among other things, that the sellers had no knowledge of defects in the walls. After the closing, the buyers found a number of leaks in the windows and doors. The buyers sued the sellers, claiming such leaks should have been disclosed, The trial court ruled in the buyers' favor, stating that the language of the disclosure should be interpreted broadly, and that "walls" should include "doors and windows".
The sellers appealed and won. The appellate court found that the statute and the disclosure should be strictly construed. The document does not mention doors and windows, only walls. Since there was no clear case on whether a window or door was considered part of a wall, the court relied on the dictionary definition of a wall, which does not include a window or a door. The court also stated that the legislature could have chosen to make the Illinois Residential Real Property Disclosure more detailed, but they did not.
So the sellers won and the buyers were stuck with their leaky doors and windows. At the end of the day, you cannot rely on any disclosures; they may not be complete, and the court has clearly indicated that it will take a strict construction of the items listed in the disclosure. If you are concerned, make sure you conduct a detailed inspection!
Monday, June 24, 2013
Delinquent Property Tax Sale Coming Soon!
Cook County's annual sale of delinquent property taxes is just six weeks away. What can you buy? Delinquent taxes from 2011. The sale is scheduled to begin on August 5. Although most real estate taxes get paid before the tax sale buyer ends up with the property, some tax sale buyers do get lucky and end up with a property at a bargain price,.
If you owe taxes for 2011, and you don't want your home to be sold at the tax sale, you need to go downtown to the Cook County Treasurer's office at least one business day before the sale and pay the taxes. The treasurer's office will only accept cash, cashier's checks, money orders, or certified checks. The taxes can also be paid on the Cook County Treasurer's website until July 26, 2013, or at any Chicagoland Chase Bank until August 1, 2013.
If you owe taxes for 2011, and you don't want your home to be sold at the tax sale, you need to go downtown to the Cook County Treasurer's office at least one business day before the sale and pay the taxes. The treasurer's office will only accept cash, cashier's checks, money orders, or certified checks. The taxes can also be paid on the Cook County Treasurer's website until July 26, 2013, or at any Chicagoland Chase Bank until August 1, 2013.
Monday, June 17, 2013
Non-Lawyers No Longer Allowed at Lake County Tax Appeals Board
Following at least eleven other counties in Illinois, Lake County no longer allows non-lawyers to represent homeowners at the Tax Appeal Board level. Homeowners and property owners may represent themselves (assuming they are individuals and not entities), or they may engage a licensed attorney. Any other person or entity who appears shall be committing the unauthorized practice of law.
However, real estate brokers, architects, accountants and appraisers may continue to serve as expert witnesses.
However, real estate brokers, architects, accountants and appraisers may continue to serve as expert witnesses.
Monday, June 10, 2013
Local Rules Trump State Rules when it comes to Condos
In Palm v 2800 Lake Shore Drive Condo Ass'n, 2013 IL 110505, the court determined that any home-rule municipality may enact its own regulations affecting condominiums, despite the existence of the Illinois Condominium Property Act.
Following a dispute with his condominium association in 1999, Mr. Palm requested the association's financial records pursuant to Chicago law. Under Chicago law, a condominium owner need not provide a reason for his request; moreover, the association must provide all financial records within three business days. On the other hand, the Illinois Condominium Property Act requires condominium owners to submit a reason for the request, limits the request to the last ten years, and gives the association thirty days to produce the documents.
At the end of the day, the condominium association in the Palm case challenged local law, and lost. The court ruled that home rule municipalities can govern condominiums as they choose, since the state has not limited their right to do so, nor does the state have any vital interest in condominium associations.
So keep in mind that if your condominium is in a town with its own local ordinance governing condominiums, that local ordinance will supersede state law.
Following a dispute with his condominium association in 1999, Mr. Palm requested the association's financial records pursuant to Chicago law. Under Chicago law, a condominium owner need not provide a reason for his request; moreover, the association must provide all financial records within three business days. On the other hand, the Illinois Condominium Property Act requires condominium owners to submit a reason for the request, limits the request to the last ten years, and gives the association thirty days to produce the documents.
At the end of the day, the condominium association in the Palm case challenged local law, and lost. The court ruled that home rule municipalities can govern condominiums as they choose, since the state has not limited their right to do so, nor does the state have any vital interest in condominium associations.
So keep in mind that if your condominium is in a town with its own local ordinance governing condominiums, that local ordinance will supersede state law.
Thursday, May 30, 2013
Home Owners Defaulting on HAMP-modified Mortgages
Although it's hard to pinpoint the reason why, in a report presented to Congress last month by TARP (the Troubled Asset Relief Program) we learned that many homeowners whose loans were modified under HAMP are defaulting on their modified mortgages. Nearly half of the people that were approved for permanent modifications when HAMP first started, in the summer/fall of 2009, have defaulted. Also, nearly 40% of the people whose loans were modified in the last quarter of 2009 have defaulted. And averaging across the year, about a third of mortgages modified under HAMP in 2010 have now re-defaulted.
That is a whole lot of defaulting. It's not easy to get a mortgage modified, much less to have it modified under HAMP. Generally homeowners are glad to receive the modification, so long as they believe they can make the payments. Then why all of these defaults?
Unfortunately, there is no data available that pinpoints the cause of the defaults. Why couldn't the homeowners sustain the payments? Why weren't the modifications viable in the long run?
While there are over 860,000 homeowners out there who have received permanent HAMP modifications, there are over 312,000 that have defaulted on their HAMP-modified mortgages.
What can HAMP do to stop this trend? Without further data, it's impossible to say.
That is a whole lot of defaulting. It's not easy to get a mortgage modified, much less to have it modified under HAMP. Generally homeowners are glad to receive the modification, so long as they believe they can make the payments. Then why all of these defaults?
Unfortunately, there is no data available that pinpoints the cause of the defaults. Why couldn't the homeowners sustain the payments? Why weren't the modifications viable in the long run?
While there are over 860,000 homeowners out there who have received permanent HAMP modifications, there are over 312,000 that have defaulted on their HAMP-modified mortgages.
What can HAMP do to stop this trend? Without further data, it's impossible to say.
Friday, May 24, 2013
Mortgage Settlement Distributions in Illinois
Last year, the government reached a $25 billion settlement with five large mortgage lenders. During the last year, Illinois homeowners have slowly been receiving the fruits of that settlement. Over a year later, almost $1.8 billion has been distributed to over 25,000 Illinois residents. Initial estimates were that Illinois residents would receive between $1 billion and $1.5 billion, but it turns out we were owed more.
How have these benefits played out? Well, over 5,000 homeowners were able to complete short sales with their lender's permission. More than 8,000 homeowners had their secondary liens canceled entirely, leaving them with only their first mortgage. Over 3,500 homeowners received permanent loan modifications with large reductions in the principal owed, averaging over $118,000.
The government is still monitoring banks for compliance.
How have these benefits played out? Well, over 5,000 homeowners were able to complete short sales with their lender's permission. More than 8,000 homeowners had their secondary liens canceled entirely, leaving them with only their first mortgage. Over 3,500 homeowners received permanent loan modifications with large reductions in the principal owed, averaging over $118,000.
The government is still monitoring banks for compliance.
Friday, May 10, 2013
April 2013 Foreclosure Auction Activity
According to RealtyTrac, there were 2,945 scheduled residential auctions last month in Cook County. That's the most auctions in any given month in nearly three years. Just a year ago in April of 2012, there were only 1,844 scheduled foreclosure auctions.
Of course, not all of the properties actually end up auctioned. Some auctions get canceled because the homeowner is able to work out an alternative deal with the lender, such as a foreclosure or short sale. Some are simply postponed for a short while.
Of the auctions that did happen, only about ten percent went to third parties. Most of the time, the bank just ends up taking possession of the property and eventually selling it on the market.
Despite the increased auctions last month, RealtyTrac stated that in general, foreclosure activity is down in Illinois.
Of course, not all of the properties actually end up auctioned. Some auctions get canceled because the homeowner is able to work out an alternative deal with the lender, such as a foreclosure or short sale. Some are simply postponed for a short while.
Of the auctions that did happen, only about ten percent went to third parties. Most of the time, the bank just ends up taking possession of the property and eventually selling it on the market.
Despite the increased auctions last month, RealtyTrac stated that in general, foreclosure activity is down in Illinois.
Friday, May 3, 2013
Increased Rents on Streets with Name Recognition
What's in a name? Sometimes quite a lot. According to a report by Colliers International, in 2012 streets worldwide with strong name recognition saw double-digit rent increases. For example, Fifth Avenue (New York), Old Bond Street (London), and our very own North Michigan Avenue here in Chicago all saw significant rent increases.
A lot of retailers want to be on the "best" streets -- the streets that pull both the locals and the tourists -- and that drives the increased rent. In the United States, key streets in Miami and New York saw rent increases of over 30%; in fact, rents on Madison Avenue in New York increased nearly 40%. Key streets in Atlanta and San Diego saw rent increases over 10%.
That's great news for landlords, and also signifies that retailers are investing more. If retailers feel the increased rents are justified by profits, that's good news for the economy.
A lot of retailers want to be on the "best" streets -- the streets that pull both the locals and the tourists -- and that drives the increased rent. In the United States, key streets in Miami and New York saw rent increases of over 30%; in fact, rents on Madison Avenue in New York increased nearly 40%. Key streets in Atlanta and San Diego saw rent increases over 10%.
That's great news for landlords, and also signifies that retailers are investing more. If retailers feel the increased rents are justified by profits, that's good news for the economy.
Sunday, April 28, 2013
Zombie Foreclosures are Everywhere!
Close your windows! Lock your doors! Turn out the lights and hide! The zombies are coming!
No, seriously, they are, but these zombies are not a threat to your life. These are zombie foreclosures, and they seem to be increasing nationwide. What are zombie foreclosures? Well, let's say a homeowner who is not making mortgage payments gets a foreclosure notice. Instead of trying to fight it, the homeowner decides it's not worth it and moves out. Subsequently the bank does not complete the foreclosure process.
Wait a minute, why didn't the bank foreclose? You may have noticed that 1) the real estate market crashed a few years back; 2) many homeowners are facing or fighting foreclosure; 3) the economy's been troubled. As a result, there is quite a backlog of foreclosures. Moreover, some banks don't even want to foreclose because they don't want to be stuck with the burden of maintaining homes, especially as more and more municipalities impose fines for allowing homes to become fall apart.
In a zombie foreclosure, at the end of the day, the homeowner has moved out, but the bank didn't foreclose. Now the home is vacant, and no one is taking care of it. It could be flooded, damaged or used by thugs as a meth lab. No one is paying the insurance or real estate taxes or maintaining the house.
This is a high risk situation. The home could attract criminals or just simply fall apart. Either way, this hurts the community. Moreover, the unsuspecting homeowner who moves out still owns the house! He could be stuck with real estate tax bills and other expenses related to the house, and they may come as a complete surprise.
According to RealtyTrac, there are approximately 302,000 such zombie foreclosures nationwide. That's about 35% of homes facing foreclosure overall. Illinois is ranked second in the number of zombie foreclosures. Only Florida has more zombie foreclosures than Illinois does.
So as the weather improves and you are out and about your neighborhood this spring, be careful where you go. . .A zombie may be lurking around the corner!
No, seriously, they are, but these zombies are not a threat to your life. These are zombie foreclosures, and they seem to be increasing nationwide. What are zombie foreclosures? Well, let's say a homeowner who is not making mortgage payments gets a foreclosure notice. Instead of trying to fight it, the homeowner decides it's not worth it and moves out. Subsequently the bank does not complete the foreclosure process.
Wait a minute, why didn't the bank foreclose? You may have noticed that 1) the real estate market crashed a few years back; 2) many homeowners are facing or fighting foreclosure; 3) the economy's been troubled. As a result, there is quite a backlog of foreclosures. Moreover, some banks don't even want to foreclose because they don't want to be stuck with the burden of maintaining homes, especially as more and more municipalities impose fines for allowing homes to become fall apart.
In a zombie foreclosure, at the end of the day, the homeowner has moved out, but the bank didn't foreclose. Now the home is vacant, and no one is taking care of it. It could be flooded, damaged or used by thugs as a meth lab. No one is paying the insurance or real estate taxes or maintaining the house.
This is a high risk situation. The home could attract criminals or just simply fall apart. Either way, this hurts the community. Moreover, the unsuspecting homeowner who moves out still owns the house! He could be stuck with real estate tax bills and other expenses related to the house, and they may come as a complete surprise.
According to RealtyTrac, there are approximately 302,000 such zombie foreclosures nationwide. That's about 35% of homes facing foreclosure overall. Illinois is ranked second in the number of zombie foreclosures. Only Florida has more zombie foreclosures than Illinois does.
So as the weather improves and you are out and about your neighborhood this spring, be careful where you go. . .A zombie may be lurking around the corner!
Friday, April 19, 2013
Proposed Changes to Rules about Condominum Assessments when Buying Foreclosures
The Illinois Condominium Property Act states what a Buyer needs to pay to the association when purchasing foreclosed property from a lender. A blog post I wrote some years ago talks about that. But the reality is, there's a lot of confusion out there. A new bill introduced recently to the state House makes some proposals to help clarify the prospective buyer's obligations. Specifically:1) Anyone who purchases a foreclosed condominium from the mortgagee of the condominium will be responsible for up to 9 months of regular back assessments.2) The association can include legal fees and court costs incurred because of the non-payment of assessments, but the TOTAL bill to the new buyer cannot be greater than 9 months of regular back assessments total.3) Any foreclosure sale notice must specifically state that anyone who buys the property from the mortgagee may be responsible for up to 9 months of back assessments.4) Any proposed buyer must include a statement in his offer or his contract saying he will pay the fees required pursuant to ths new provision.5) The current language, which states that the buyer pays for up to 6 months of back assessments prior to an action to collect such assessments, shall be deleted. Most real estate attorneys agree that the act needs to be clarified, although they may not agree on what the clarifications should be. Regardless, at this point the above clarifications are not law. Let's see what happens!
Friday, April 12, 2013
First Quarter 2013 Foreclosure Roundup
According to RealtyTrac, in Illinois and around the country, foreclosures went down during the first quarter of 2013. While Illinois' rate of foreclosure activity dropped nearly 5% from the first quarter of 2012, Illinois still ranks the third highest in foreclosure activity in the country. Only Florida and Nevada have more foreclosures than Illinois.
Chicago, Cook County, and all of the collar counties, with the exception of DuPage County, had reduced foreclosure activity between January 1 and March 31, 2013. DuPage County's foreclosure rate increased over both the first and last quarters of 2012.
Nationally, 152,500 properties had foreclosures filed againt them in March of 2013. That's actually a little less than the number of new foreclosures filed in February 2012, and about 23% less than the number of new foreclosures filed in March 2012.
Chicago, Cook County, and all of the collar counties, with the exception of DuPage County, had reduced foreclosure activity between January 1 and March 31, 2013. DuPage County's foreclosure rate increased over both the first and last quarters of 2012.
Nationally, 152,500 properties had foreclosures filed againt them in March of 2013. That's actually a little less than the number of new foreclosures filed in February 2012, and about 23% less than the number of new foreclosures filed in March 2012.
Friday, April 5, 2013
Don't ignore your foreclosure!
In a recent case, OneWest Bank, FSB v. Hawthorne, 2013 IL App (5th) 110475 (February 4, 2013), the appellate court basically told a homeowner who was trying to appeal her foreclosure that she should not have ignored it for so long, and that she should have acted with diligence.
The bank filed its foreclosure on April 5, 2010, and after trying and failing to reach Ms. Hawthorne directly, filed a motion for default judgment on June 21, 2010. Judgment was entered in the bank's favor just three days later.
That fall, Hawthorne file a motion, pro se, to have the judgment vacated. She hired an attorney to assist her a little later. However, neither she nor her attorney appeared in court for the hearing. The property was eventually sold at a public auction in April 2011, and the court entered the order approving the sale in May. Shortly thereafter, Hawthorne tried to get the court to reconsider the order approving the sale, but she was not successful. Thus the matter went to the appellate court.
Citing Malkin v. Malkin, 301 Ill. App. 3d 303, 310 (1998), the appellate court stated that in order to vacate a judgment, the appellant must show a meritorious claim or defense and diligence in pursuing that claim or defense both before and after the judgment. Based on the facts of the case, the court decided that not only did Hawthorne not have a valid defense or claim, but that she had not been diligent in pursuing any purported defense or claim anyhow.
The court affirmed the circuit court's judgment in favor of the bank.
So if you are being foreclosed, what should you take away from this? Don't ignore the foreclosure, especially if you want to try to keep your home. The bank may foreclose you whether or not you do something about it, but if you don't do anything at all, the bank will foreclose you quickly and you could lose any valid claims or defenses you have.
The bank filed its foreclosure on April 5, 2010, and after trying and failing to reach Ms. Hawthorne directly, filed a motion for default judgment on June 21, 2010. Judgment was entered in the bank's favor just three days later.
That fall, Hawthorne file a motion, pro se, to have the judgment vacated. She hired an attorney to assist her a little later. However, neither she nor her attorney appeared in court for the hearing. The property was eventually sold at a public auction in April 2011, and the court entered the order approving the sale in May. Shortly thereafter, Hawthorne tried to get the court to reconsider the order approving the sale, but she was not successful. Thus the matter went to the appellate court.
Citing Malkin v. Malkin, 301 Ill. App. 3d 303, 310 (1998), the appellate court stated that in order to vacate a judgment, the appellant must show a meritorious claim or defense and diligence in pursuing that claim or defense both before and after the judgment. Based on the facts of the case, the court decided that not only did Hawthorne not have a valid defense or claim, but that she had not been diligent in pursuing any purported defense or claim anyhow.
The court affirmed the circuit court's judgment in favor of the bank.
So if you are being foreclosed, what should you take away from this? Don't ignore the foreclosure, especially if you want to try to keep your home. The bank may foreclose you whether or not you do something about it, but if you don't do anything at all, the bank will foreclose you quickly and you could lose any valid claims or defenses you have.
Friday, March 29, 2013
Expect a long wait at the Illinois Property Tax Appeals Board
The Illinois Property Tax Appeals Board is short-staffed, and as a result nearly 87,500 Illinois real estate tax payers have a long wait ahead of them. One of the auditors estimated two years to process the pending cases.
In 2012 alone, 42,871 appeals were filed, nearly a 36% increase over 2011, and a whopping 226% increase since 2002, when the agency had twice as much staff as it does now. Back then, applications were fewer, and despite the larger staff, it still took a while to process files, though not as long as it does now.
The state legislature has set aside more funds to increase the staff at the appeals board, but even so, the staff won't reach 2002 levels.
So if your tax appeal is not getting processed, it's probably sitting in a pile somewhere with 42,000 other tax appeals in the same boat. It will get processed eventually, so sit tight.
In 2012 alone, 42,871 appeals were filed, nearly a 36% increase over 2011, and a whopping 226% increase since 2002, when the agency had twice as much staff as it does now. Back then, applications were fewer, and despite the larger staff, it still took a while to process files, though not as long as it does now.
The state legislature has set aside more funds to increase the staff at the appeals board, but even so, the staff won't reach 2002 levels.
So if your tax appeal is not getting processed, it's probably sitting in a pile somewhere with 42,000 other tax appeals in the same boat. It will get processed eventually, so sit tight.
Friday, March 22, 2013
Low Sales Price for Half-Interest in Real Estate Okay
A recent case, NAV Bank . LaSalle Bank, N.A., 2013 IL App
(1st) 121147 (January 22, 2013) Cook Co.,1st Div. found that it was fair to sell a half-interest in a home at a forced sale at a price significantly below half of the market value of the home.
NAV Bank revolves around a dispute over a single family home that began in the 1990s. After much litigation, one family, the Toms, won against the other party, Adeline Moy. Ms. Moy has since passed, and the Toms attempted to enforce the judgment against Ms. Moy by going after her interest in the home that she and her husband, Mr. Moy, owned.
After much maneuvering, Ms. Moy's half-interest in the home was sold. The Toms purchased the half-interest for $20,000, even though the house appraised at $280,000. No one else placed a bid. Mr. Moy asked the court to set aside the sale on the grounds that the sales price was too low.
In the end, the court did not agree. What it boils down to is this: Buying a half-interest in a house is nowhere near buying the entire house. Any such ownership will be fraught with difficulties and disputes. No one would pay half the market value of a house for buying only a half-share in the house. By its very nature, such a purchase must be significantly discounted. Therefore, the sales price of $20,000 is fair.
NAV Bank revolves around a dispute over a single family home that began in the 1990s. After much litigation, one family, the Toms, won against the other party, Adeline Moy. Ms. Moy has since passed, and the Toms attempted to enforce the judgment against Ms. Moy by going after her interest in the home that she and her husband, Mr. Moy, owned.
After much maneuvering, Ms. Moy's half-interest in the home was sold. The Toms purchased the half-interest for $20,000, even though the house appraised at $280,000. No one else placed a bid. Mr. Moy asked the court to set aside the sale on the grounds that the sales price was too low.
In the end, the court did not agree. What it boils down to is this: Buying a half-interest in a house is nowhere near buying the entire house. Any such ownership will be fraught with difficulties and disputes. No one would pay half the market value of a house for buying only a half-share in the house. By its very nature, such a purchase must be significantly discounted. Therefore, the sales price of $20,000 is fair.
Monday, March 18, 2013
Community Association Managers Require Licensing
If you are involved in community association management, or if you are a member of or on the board of a community association looking for a new manager for your association, you need to know that effective October 2012, community association managers in Illinois must be licensed under the Community Association Manager License and Disciplinary Act (CAMLDA).
Community association managers are not the same as property managers. To fall under the purview of the CAMLDA, a manager must be managing one or more community associations. A community association is a group that 1) individual unit owners must be a part of as a result of their ownership in a condominium association or other such homeowners' association, and 2) the association must have a right to impose assessments on unit owners.
Moreover, a community association manager may have a lot of responsibilities that a property manager doesn't have, such as collecting assessments, organizing and assisting with association and board meetings, maintaining association documentation and other records, dealing with unit owners selling their property in the association (as well as prospective buyers), and preparing budgets for board approval.
If all the manager is doing is managing rental apartments on behalf of an owner, he doesn't need a license under CAMLDA (although if it's not his own building, he may need a real estate license, but that's the subject of a separate post)!
Community association managers are not the same as property managers. To fall under the purview of the CAMLDA, a manager must be managing one or more community associations. A community association is a group that 1) individual unit owners must be a part of as a result of their ownership in a condominium association or other such homeowners' association, and 2) the association must have a right to impose assessments on unit owners.
Moreover, a community association manager may have a lot of responsibilities that a property manager doesn't have, such as collecting assessments, organizing and assisting with association and board meetings, maintaining association documentation and other records, dealing with unit owners selling their property in the association (as well as prospective buyers), and preparing budgets for board approval.
If all the manager is doing is managing rental apartments on behalf of an owner, he doesn't need a license under CAMLDA (although if it's not his own building, he may need a real estate license, but that's the subject of a separate post)!
Friday, March 1, 2013
What is a Special Assessment?
If you own or are buying a condominium, you may come across the term "special assessment". What does that mean? Well, there's a regular assessment, usually monthly, that you are paying towards the association's general maintenance expenses. But when there's a large scale improvement or repair that wasn't budgeted for, the association needs to get the money from somewhere. So what do they do? They assess it to the homeowners. It's not a part of the regular expense; hence, it's "special".
Often when you see a special assessment, it's for a big-ticket items like a roof repair, tuckpointing, sudden damage to the building, or some other large renovation or repair. Special assessments can be a few dollars or thousands of dollars, so make sure you do your diligence if you're buying . A Section 22.1 Disclosure is key to help you determine what costs you may be looking at in the near future. Even if you do all the diligence you possibly could, you may end up owing a special assessment anyway if there's an emergency repair needed.
As a condominium owner or condominium purchaser, make sure you are setting a little something by for a rainy day (i.e. a special assessment) in case you ever need it!
Often when you see a special assessment, it's for a big-ticket items like a roof repair, tuckpointing, sudden damage to the building, or some other large renovation or repair. Special assessments can be a few dollars or thousands of dollars, so make sure you do your diligence if you're buying . A Section 22.1 Disclosure is key to help you determine what costs you may be looking at in the near future. Even if you do all the diligence you possibly could, you may end up owing a special assessment anyway if there's an emergency repair needed.
As a condominium owner or condominium purchaser, make sure you are setting a little something by for a rainy day (i.e. a special assessment) in case you ever need it!
Friday, February 22, 2013
Home Inspections: What to Look For
If you are buying residential property, you are probably aware that you should get a home inspection. This means you should hire a licensed home inspector to check out the house for you. Typically this is done within the first 5 days after the contract is signed by the seller. If you are not happy with the way the inspection turns out, your attorney can cancel the transaction or try to negotiate the repairs or a credit for you.
Keep in mind, however, that a typical home inspection is not meant to cover cosmetic items. If you are walking through the house and notice chipped tiles or peeling paint, take all of that into account when you make your initial offer. The purpose of the inspection is to make sure that the home's structure and systems are in good condition, not to find peeling wallpaper or dirty carpets.
Make sure your home inspector focuses on the following:
1) Roof condition and water-tightness
2) Foundation condition and water seepage
3) Mechanicals and HVAC
4) Plumbing and internal water damage
5) Electrical panel and system
6) Exterior walls
7) Exterior slope
If you are concerned that there might be mold that is not visible, or radon, you may have to ask your inspector to run specialized tests. Not all inspectors are able to do mold and radon testing, however, and you might need to contact someone else for assistance.
If your inspection reveals conditions that are unacceptable to you, or will cost too much to fix, you can back out as long as you do it in a timely manner. If the flaws are manageable, you can move forward.
Keep in mind, however, that a typical home inspection is not meant to cover cosmetic items. If you are walking through the house and notice chipped tiles or peeling paint, take all of that into account when you make your initial offer. The purpose of the inspection is to make sure that the home's structure and systems are in good condition, not to find peeling wallpaper or dirty carpets.
Make sure your home inspector focuses on the following:
1) Roof condition and water-tightness
2) Foundation condition and water seepage
3) Mechanicals and HVAC
4) Plumbing and internal water damage
5) Electrical panel and system
6) Exterior walls
7) Exterior slope
If you are concerned that there might be mold that is not visible, or radon, you may have to ask your inspector to run specialized tests. Not all inspectors are able to do mold and radon testing, however, and you might need to contact someone else for assistance.
If your inspection reveals conditions that are unacceptable to you, or will cost too much to fix, you can back out as long as you do it in a timely manner. If the flaws are manageable, you can move forward.
Friday, February 15, 2013
Chicago Named Strongest Buyer's Market in the Country
According to data recently released by Zillow, Chicago was the best buyer's market in the United States in the third and fourth quarters of 2012. Zillow studied 142 metro areas across the country, and found that buyers in Chicago have far stronger bargaining positions than sellers do. Cleveland came in second place, and the top five were rounded out by by Philadelphia, Cincinnati, and New York City.
The top three seller's markets, meaning metro areas in which the sellers had greater bargaining power than the buyers, were all in California: San Jose, San Francisco, and Sacramento. The top five were rounded out by Las Vegas and Phoenix.
The formula Zillow used to determine the best markets had three components: 1) A comparison of how much a house sells for as compared to its last listed price; 2) the amount of time a house stays on the market; and 3) the percentage of homes in any metropolitan area that have had at least one price reduction. Chicago is the strongest buyer's market because in order to sell their homes, sellers are not only having to reduce prices more often than sellers in other metro areas, their homes are on the market longer, and the final price they accept is a smaller percentage of the asking price than the prices accepted in other metropolitan areas.
What does this mean for you? Well, if you're looking to buy, according to Zillow, it's a great time to do it. On the other hand, if you're looking to sell, you have a lot of competition out there!
The top three seller's markets, meaning metro areas in which the sellers had greater bargaining power than the buyers, were all in California: San Jose, San Francisco, and Sacramento. The top five were rounded out by Las Vegas and Phoenix.
The formula Zillow used to determine the best markets had three components: 1) A comparison of how much a house sells for as compared to its last listed price; 2) the amount of time a house stays on the market; and 3) the percentage of homes in any metropolitan area that have had at least one price reduction. Chicago is the strongest buyer's market because in order to sell their homes, sellers are not only having to reduce prices more often than sellers in other metro areas, their homes are on the market longer, and the final price they accept is a smaller percentage of the asking price than the prices accepted in other metropolitan areas.
What does this mean for you? Well, if you're looking to buy, according to Zillow, it's a great time to do it. On the other hand, if you're looking to sell, you have a lot of competition out there!
Friday, February 8, 2013
Changes to the Security Deposit Return Act
Landlords and tenants often end up fighting, and sometimes the arguments continue well past the end of the tenancy. You may have had a bad landlord, or a bad tenant, but the fact is, not all landlords are bad, and neither are all tenants. Periodically the state legislature makes little tweaks to various laws to acknowledge either or both of these assertions.
Recently, for example, the legislature tweaked the Security Deposit Return Act. Pursuant to this Act, the landlord must give the tenant an itemized list of the damage the tenant caused to the landlord's property within 30 days after the tenant leaves, along with the cost (either actual or estimated) of repairing the same. This notice must be given to the tenant personally, or at his last known address. Effective January 1, 2013, however, landlords have the option of sending this notice via electronic mail to an e-mail address that has been previously verified by the landlord (perhaps an e-mail address on which the landlord and tenant communicated with each other earlier -- the statute uses the word "verified" but does not state exactly what that means).
Regardless, this revision helps get around an argument often used by tenants, namely that the tenant did not receive the notice. In many cases, the tenant truly has not received the notice because he had left the landlord's property before the notice was prepared, and he is not living at the address he lived at prior to moving to the landlord's property. If the notice is sent via electronic mail, the landlord can have a greater degree of confidence that it will actually be received by the tenant.
For more information on the Security Deposit Return Act, click here.
Recently, for example, the legislature tweaked the Security Deposit Return Act. Pursuant to this Act, the landlord must give the tenant an itemized list of the damage the tenant caused to the landlord's property within 30 days after the tenant leaves, along with the cost (either actual or estimated) of repairing the same. This notice must be given to the tenant personally, or at his last known address. Effective January 1, 2013, however, landlords have the option of sending this notice via electronic mail to an e-mail address that has been previously verified by the landlord (perhaps an e-mail address on which the landlord and tenant communicated with each other earlier -- the statute uses the word "verified" but does not state exactly what that means).
Regardless, this revision helps get around an argument often used by tenants, namely that the tenant did not receive the notice. In many cases, the tenant truly has not received the notice because he had left the landlord's property before the notice was prepared, and he is not living at the address he lived at prior to moving to the landlord's property. If the notice is sent via electronic mail, the landlord can have a greater degree of confidence that it will actually be received by the tenant.
For more information on the Security Deposit Return Act, click here.
Friday, February 1, 2013
Mortgage Relief Extended for 2013
A few laws benefiting home owners and borrowers have been extended through December 31, 2013.
First of all, the Mortgage Debt Relief Act of 2007 expired on Decembr 31, 2012. On New Year's Day, however, lawmakers extended the act through 2013. This is good news if you are going through a short sale. Typically, any debt that is forgiven during the course of a short sale is taxable income to the homeowner who's debt is forgiven. But pursuant to the Mortgage Debt Relief Act, such debt is not taxable.
Second, mortgage insurance premiums will remain deductible, as they were in the past, as a result of the recent "fiscal cliff" laws. These deductions allow a sizeable savings for homeowners who pay mortgage insurance, so long as their income is less than $110,000 annually
Third, in 2012, homeowners who made energy-efficient improvements were allowed to take a $500 tax credit if they met certain criteria. This has also been extended through 2013.
First of all, the Mortgage Debt Relief Act of 2007 expired on Decembr 31, 2012. On New Year's Day, however, lawmakers extended the act through 2013. This is good news if you are going through a short sale. Typically, any debt that is forgiven during the course of a short sale is taxable income to the homeowner who's debt is forgiven. But pursuant to the Mortgage Debt Relief Act, such debt is not taxable.
Second, mortgage insurance premiums will remain deductible, as they were in the past, as a result of the recent "fiscal cliff" laws. These deductions allow a sizeable savings for homeowners who pay mortgage insurance, so long as their income is less than $110,000 annually
Third, in 2012, homeowners who made energy-efficient improvements were allowed to take a $500 tax credit if they met certain criteria. This has also been extended through 2013.
Friday, January 25, 2013
Will Cook County get a Land Bank?
According to research conducted by an advisory committee appointed by the Cook County Board President, 80 government bodies in 23 different states have a land bank. Last month the Cook County Board President is recommending that Cook County form one too.
What is a land bank? In this context, a typical land bank is a quasi-governmental group that buys (or receives via donation), maintains, manages and then eventually sells off properties that were otherwise serving no real purpose. Usually the properties owned by the land bank were either foreclosed or sold at scavenger sales; often they are vacant and seldom have they been maintained.
If Cook County's land bank is formed, the advisory committee hopes it will deal with 850 properties in its first year. This estimate assumes that the land bank would purchase 30% of the properties with an initial $1 million start-up investment, and that 70% of the properties would be donated by banks.
The Cook County Board is considering the land bank proposal this year.
What is a land bank? In this context, a typical land bank is a quasi-governmental group that buys (or receives via donation), maintains, manages and then eventually sells off properties that were otherwise serving no real purpose. Usually the properties owned by the land bank were either foreclosed or sold at scavenger sales; often they are vacant and seldom have they been maintained.
If Cook County's land bank is formed, the advisory committee hopes it will deal with 850 properties in its first year. This estimate assumes that the land bank would purchase 30% of the properties with an initial $1 million start-up investment, and that 70% of the properties would be donated by banks.
The Cook County Board is considering the land bank proposal this year.
Friday, January 18, 2013
Radon Revisions Effective January 1, 2013
In 2012, the Illinois state legislature made some changes to radon-related items that took effect on January 1, 2013. Here are the basics:
1) Licensed day care centers, licensed home day care facilities, and licensed group day care homes must be tested for radon at least once every three years. The radon test report must be posted in the facility, and copies must be available to parents and guardians upon request.
2) The Radon Disclosure form (given to buyers) has been changed. Specifically, sellers are now required to give buyers the most current records of radon on the property, as opposed to "all available" records. Attorneys, real estate agents, and sellers should take care to use the new form.
1) Licensed day care centers, licensed home day care facilities, and licensed group day care homes must be tested for radon at least once every three years. The radon test report must be posted in the facility, and copies must be available to parents and guardians upon request.
2) The Radon Disclosure form (given to buyers) has been changed. Specifically, sellers are now required to give buyers the most current records of radon on the property, as opposed to "all available" records. Attorneys, real estate agents, and sellers should take care to use the new form.
Friday, January 11, 2013
Illinois Provides Funding for Military Homebuyers
Recently, Illinois invested more money into Welcome Home Heroes. The $5 million cash injection will help military families and veterans buy homes in the state. In addition to active military members and veterans, the program is also available to Illinois National Guard members and reservists. To qualify under this program, you must be a first-time home buyer unless you are a veteran.
There are income limits as well. If you are buying a home in Cook, Lake, DuPage, Will, McHenry, or Kane counties, then your household income must be less than $90,960, assuming your household consists of 1-2 people. If your household consists of 3 or more people, your household income must be less than $106,120. All other Illinois counties are eligible too, although they each have their own income limits.
Of course, there are limits on the purchase price as well. If you are buying a single-family property in Cook, Lake, DuPage, Will, McHenry, Kane, Kendall, Grundy, or DeKalb counties, the home must cost less than $378,461. All of the other counties have their own purchase price limits, but they are all less than $378,461.
If you meet the various requirements and qualify for a Welcome Home Heroes loan, here's what you get:
1) A 30-year fixed loan. As of today, the interest rate is 3.725% for conventional financing and 3.25% for FHA or VA programs (subject to change).
2) A forgiveable loan of $10,000 for closing costs and down payment assistance
3) A special mortgage credit certificate to help save more money than the traditional itemized deduction for interest on your income taxes
If you feel you might qualify, it's worth looking into!
There are income limits as well. If you are buying a home in Cook, Lake, DuPage, Will, McHenry, or Kane counties, then your household income must be less than $90,960, assuming your household consists of 1-2 people. If your household consists of 3 or more people, your household income must be less than $106,120. All other Illinois counties are eligible too, although they each have their own income limits.
Of course, there are limits on the purchase price as well. If you are buying a single-family property in Cook, Lake, DuPage, Will, McHenry, Kane, Kendall, Grundy, or DeKalb counties, the home must cost less than $378,461. All of the other counties have their own purchase price limits, but they are all less than $378,461.
If you meet the various requirements and qualify for a Welcome Home Heroes loan, here's what you get:
1) A 30-year fixed loan. As of today, the interest rate is 3.725% for conventional financing and 3.25% for FHA or VA programs (subject to change).
2) A forgiveable loan of $10,000 for closing costs and down payment assistance
3) A special mortgage credit certificate to help save more money than the traditional itemized deduction for interest on your income taxes
If you feel you might qualify, it's worth looking into!
Friday, January 4, 2013
2012 Residential Real Estate Round-Up
The National Association of Realtors recently profiled home buyers in 2012. Here are some tidbits:
In 2012:
1) 39% of homes were purchased by first-time home buyers.
2) Married couples purchased 65% of all homes bought.
3) Married couples sold 76% of all homes sold.
4) The average seller had lived in his home for 9 years at the time he or she sold it.
5) The average home buyer was 42 years old.
If you are trying to sell your home, perhaps this information can help you cater to the potential buyers out there!
In 2012:
1) 39% of homes were purchased by first-time home buyers.
2) Married couples purchased 65% of all homes bought.
3) Married couples sold 76% of all homes sold.
4) The average seller had lived in his home for 9 years at the time he or she sold it.
5) The average home buyer was 42 years old.
If you are trying to sell your home, perhaps this information can help you cater to the potential buyers out there!
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