Last week, the Illinois Supreme Court formed a committee to look into the mortgage foreclosure process in Illinois. This new 14 person committee will include a representative from the attorney general's office, bankers, attorneys, and judges.
The committee will be charged with investigating foreclosures in Illinois -- specifically, the committee will look into how various counties handle foreclosures differently, and what legislative proposals affecting foreclosures are making their way through the Illinois General Assembly.
The Illinois Supreme Court hopes that the new committee will provide recommendations on improving the foreclosure process overall. As it stands now, many homeowners are confused about the court process that accompanies foreclosure. Additionally there is a great deal of variation in the process between counties. While the court is not trying to standardize the process throughout Illinois, it may be beneficial to have certain rules that are the same across the board. Hopefully the committee will be able to propose such rules to help streamline the foreclosure process.
Once the committee does its job and new standards are implemented, however, foreclosures will not go away. All we can hope for is that the process becomes easier to understand for homeowners!
Monday, April 18, 2011
Tuesday, April 12, 2011
Proposed Law Would Allow Automatic Cook County Senior Citizen Property Tax Exemption
As you may or may not know, last year the Illinois legislature passed a law which required senior homeowners in Cook County to start re-applying for the senior citizen property tax exemption for their homes on an annual basis, effective in the fall of 2011. Many people, particularly seniors, were not happy about this. After all, if a senior citizen fails to apply for any reason, his or her property tax liability could increase substantially.
The legislature has been working on a fix, however, and while it may or may not make it through the House, the Senate recently approved legislation allowing senior exemptions for Cook County senior homeowners to renew automatically, as they did prior to last year's law. The bill has been passed on the House, and as of yet there is no word on whether or not the House will approve it.
In the meantime, seniors should exercise diligence and apply for the senior exemption or risk losing it!
The legislature has been working on a fix, however, and while it may or may not make it through the House, the Senate recently approved legislation allowing senior exemptions for Cook County senior homeowners to renew automatically, as they did prior to last year's law. The bill has been passed on the House, and as of yet there is no word on whether or not the House will approve it.
In the meantime, seniors should exercise diligence and apply for the senior exemption or risk losing it!
Monday, April 4, 2011
Can the Home Affordable Refinance Program (HARP) help bring your payments down?
Many homeowners are trying to refinance but are unable to for a variety of reasons. If you have been denied a traditional refinance because the value of your home has declined or you owe more than your home is worth, the Home Affordable Refinance Program (HARP) may be of assistance.
In order to qualify for the HARP program, your mortgage must either be owned or guaranteed by Fannie Mae or Freddie Mac. Additionally, you must meet the following criteria:
1. You are current on your mortgage payments.
2. In the last year, you have never been more than 30 days late when making a mortgage payment.
3. You do not have an FHA, VA, or USDA loan.
4. Your mortgage is for more than your home is currently worth. However, the outstanding amount of your mortgage is not more than 125% of the current value of your home.
5. You can demonstrate that you will be able to afford the new payments.
Note that if you do qualify for a refinance under HARP, you will still need to submit a loan application and a refinance fee, just as if you were obtaining a refinance through normal channels. The loan will be underwritten to see if you are qualified to obtain a loan in general. Just because you meet the criteria listed above, there is no guarantee you will be refinanced under HARP if you do not otherwise qualify for a refinance.
The HARP program is available until June 30, 2012.
In order to qualify for the HARP program, your mortgage must either be owned or guaranteed by Fannie Mae or Freddie Mac. Additionally, you must meet the following criteria:
1. You are current on your mortgage payments.
2. In the last year, you have never been more than 30 days late when making a mortgage payment.
3. You do not have an FHA, VA, or USDA loan.
4. Your mortgage is for more than your home is currently worth. However, the outstanding amount of your mortgage is not more than 125% of the current value of your home.
5. You can demonstrate that you will be able to afford the new payments.
Note that if you do qualify for a refinance under HARP, you will still need to submit a loan application and a refinance fee, just as if you were obtaining a refinance through normal channels. The loan will be underwritten to see if you are qualified to obtain a loan in general. Just because you meet the criteria listed above, there is no guarantee you will be refinanced under HARP if you do not otherwise qualify for a refinance.
The HARP program is available until June 30, 2012.
Monday, March 28, 2011
FTC Rule Protects Homeowners from Mortgage Relief Scams
The Federal Trade Commission recently issued the Mortgage Assistance Relief Services Rule to protect homeowners from mortgage relief scams. When the real estate market started to flounder, a number of fly-by-night operations claiming expertise in loan modifications and short sales sprung up. As a result, homeowners -- many of whom were already struggling to stay on top of their mounting bills -- paid sums to such companies in an attempt to obtain mortgage relief or short sale assistance, to no avail.
In an attempt to protect homeowners, effective January 31, 2011, the FTC banned mortgage relief companies from collecting any fees from homeowners until a loan modificaton or short sale is in fact completed. For mortgage relief to be "complete", the lender must present a written offer which the homeowner accepts. Mortgage relief companies must remind homeowners that they have an option to reject any offer which they receive, without incurring fees from the mortgage relief company.
Mortgage relief companies should also disclose whether or not they are affiliated with any goverment agency; currenty many companies prepare marketing material which falsely implies that they are a government affiliate, causing unsuspecting homeowners to hire them. Mortgage relief companies must also clearly state that there is no guarantee that homeowners will in fact receive any mortgage relief. Additionally, all fees must be disclosed in advance.
Homeowners should be wary of mortgage relief companies. Prior to hiring a company, investigate them thoroughly!
In an attempt to protect homeowners, effective January 31, 2011, the FTC banned mortgage relief companies from collecting any fees from homeowners until a loan modificaton or short sale is in fact completed. For mortgage relief to be "complete", the lender must present a written offer which the homeowner accepts. Mortgage relief companies must remind homeowners that they have an option to reject any offer which they receive, without incurring fees from the mortgage relief company.
Mortgage relief companies should also disclose whether or not they are affiliated with any goverment agency; currenty many companies prepare marketing material which falsely implies that they are a government affiliate, causing unsuspecting homeowners to hire them. Mortgage relief companies must also clearly state that there is no guarantee that homeowners will in fact receive any mortgage relief. Additionally, all fees must be disclosed in advance.
Homeowners should be wary of mortgage relief companies. Prior to hiring a company, investigate them thoroughly!
Friday, March 25, 2011
Builder Liability or Developer Liability
Condominium associations often sue developers for construction defects. But can they sue the builder, even though the builder did not sell any of the units directly to the condominium owners? According to 1324 W. Pratt Condominium Association v. Platt Construction Group, (2010 Ill. App. LEXIS 1030), the answer is yes.
In this recent court decision, the builder built an 8-unit residential building for a developer, who then sold the units to individual owners. The individual owners eventually found out that the building (and their personal property) was damaged due to water leaking in from the roof. The condominium association then sued the developer, the builder, and the roofer.
The builder claimed he should not be held liable, since he sold the building to the developer, not to the individual unit owners. The court, however, disagreed, and held that the builder could be liable under the implied warranty of habitability, regardless of whether or not he sold units directly to condominium owners. Even though the unit owners had no direct contract with the builder, they could sue him.
Previously, courts in Illinois held that if there was no direct connection between the builder and individual unit owners, the builder could not be held liable. Whether these cases can be reconciled with the Pratt decision remains to be seen.
In this recent court decision, the builder built an 8-unit residential building for a developer, who then sold the units to individual owners. The individual owners eventually found out that the building (and their personal property) was damaged due to water leaking in from the roof. The condominium association then sued the developer, the builder, and the roofer.
The builder claimed he should not be held liable, since he sold the building to the developer, not to the individual unit owners. The court, however, disagreed, and held that the builder could be liable under the implied warranty of habitability, regardless of whether or not he sold units directly to condominium owners. Even though the unit owners had no direct contract with the builder, they could sue him.
Previously, courts in Illinois held that if there was no direct connection between the builder and individual unit owners, the builder could not be held liable. Whether these cases can be reconciled with the Pratt decision remains to be seen.
Monday, March 14, 2011
U.S. Military and Foreign Service Personnel May Still be able to claim a Homebuyer Tax Credit!
The famous homebuyer tax credits, as extended, are long gone now. Or are they? Actually, they are still available to you, but only if you are a member of the armed services, foreign service, or U.S. intelligence. In that case, you have until April 30, 2011 to enter into a contract for the purchase of your primary residence, and until June 30, 2011 to close it!
In order to qualify, you must have been on official duty outside of the United States for at least 90 days, anytime between December 31, 2008, and May 1, 2010. If you were married and on official duty outside of the United States for such a 90 day period, then your spouse also qualifies for the extended eligibility timeframe for the home buyer tax credit. Both spouses need not be overseas -- so long as one spouse qualifies, the spouse who remains in the United States receives the extension as well.
There is still more good news: If you purchase a home and receive the home buyer tax credit, and you (or your spouse) are subsequently ordered for extended duty, you will not be required to pay back the credit if you sell the home or it ceases being your principal residence. What qualifies as extended duty for these purposes? Well, if you need to travel more than 50 miles from your new home for 90 days or more, or if you need to live in government housing for 90 days or more, the IRS cannot require you to repay the tax credit. The IRS repayment and recapture requirements for the home buyer tax credit are quite strict, so this is a great incentive!
In order to qualify, you must have been on official duty outside of the United States for at least 90 days, anytime between December 31, 2008, and May 1, 2010. If you were married and on official duty outside of the United States for such a 90 day period, then your spouse also qualifies for the extended eligibility timeframe for the home buyer tax credit. Both spouses need not be overseas -- so long as one spouse qualifies, the spouse who remains in the United States receives the extension as well.
There is still more good news: If you purchase a home and receive the home buyer tax credit, and you (or your spouse) are subsequently ordered for extended duty, you will not be required to pay back the credit if you sell the home or it ceases being your principal residence. What qualifies as extended duty for these purposes? Well, if you need to travel more than 50 miles from your new home for 90 days or more, or if you need to live in government housing for 90 days or more, the IRS cannot require you to repay the tax credit. The IRS repayment and recapture requirements for the home buyer tax credit are quite strict, so this is a great incentive!
Monday, March 7, 2011
Do I have to pay back my Home Buyer Tax Credit?
As you may have heard, there were some fairly strong tax incentives available for homebuyers from 2008 until September of 2010. The most recent first-time homebuyer tax credit for up to $8,000, as well as a repeat homebuyer tax credit of up to $6,500, lured some buyers out of the woodwork. You may have been one of them.
But did you know that you may have to pay the credit back? There are a variety of situations in which you could be required to repay all or a portion of the credit you received. If you fall into any one of the categories below, the IRS can require repayment:
1. Receipt of the First Time Home Buyer Credit for a 2008 purchase, and the subsequent sale of your home to a related party within 15 years;
2. Receipt of the First Time Home Buyer Credit for a 2009 or 2010 purchase, and the subsequent sale of your home to a related party within 36 months;
3. Receipt of any home buyer credit for your primary residence (whether it was purchased in 2008, 2009, or 2010), and subsequent condemnation of the home, UNLESS you replace it with the purchase of a new primary residence within 2 years of the date of condemnation;
4. Receipt of any home buyer credit for your primary residence (whether it was purchased in 2008, 2009, or 2010), subsequent destruction of the home, UNLESS you either rebuild it or replace it with the purchase of a new primary residence within 2 years of the date of destruction;
5. Receipt of any home buyer credit for your home (whether it was purchased in 2008, 2009, or 2010), and subsequent conversion of the home to a rental property or other business use.
Additionally, any sale of your home within three years after your receipt of either the 2009 or 2010 credits can trigger repayment of the entire credit to the IRS.
If you find yourself in a situation where you might need to repay the tax credit, you should consult with your accountant!
But did you know that you may have to pay the credit back? There are a variety of situations in which you could be required to repay all or a portion of the credit you received. If you fall into any one of the categories below, the IRS can require repayment:
1. Receipt of the First Time Home Buyer Credit for a 2008 purchase, and the subsequent sale of your home to a related party within 15 years;
2. Receipt of the First Time Home Buyer Credit for a 2009 or 2010 purchase, and the subsequent sale of your home to a related party within 36 months;
3. Receipt of any home buyer credit for your primary residence (whether it was purchased in 2008, 2009, or 2010), and subsequent condemnation of the home, UNLESS you replace it with the purchase of a new primary residence within 2 years of the date of condemnation;
4. Receipt of any home buyer credit for your primary residence (whether it was purchased in 2008, 2009, or 2010), subsequent destruction of the home, UNLESS you either rebuild it or replace it with the purchase of a new primary residence within 2 years of the date of destruction;
5. Receipt of any home buyer credit for your home (whether it was purchased in 2008, 2009, or 2010), and subsequent conversion of the home to a rental property or other business use.
Additionally, any sale of your home within three years after your receipt of either the 2009 or 2010 credits can trigger repayment of the entire credit to the IRS.
If you find yourself in a situation where you might need to repay the tax credit, you should consult with your accountant!
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