Associations frequently want to know what they can do when a unit owner rents out their condominium unit to someone who constantly violates rules. Well, assuming the association has not banned rentals altogether, there are a few options available:
1) If the condominium documents allow it, the association can assess fines to the unit for the various rule violations. Unit owners will not want to pay fines for problems their tenants are creating. In this way, unit owners are encouraged to deal more proactively with their tenants. Hopefully the unit owners can convince their tenants to comply with the association's rules, or if not, they can start the eviction process.
2) The condominium board can also terminate the lease. The Illinois Condominium Property Act allows condominium associations to terminate tenant leases, so long as the requirements of the Act are met (i.e. proper notice, eviction proceedings, etc.)
If you have problem tenants in your association, it is wise to address the problems early on, before it gets any worse!
Friday, June 4, 2010
Friday, May 14, 2010
Home Loans Based on Your Stock Portfolio?
Yes, you read right. It is possible to get a loan to buy a new home based on your stock portfolio. In other words, you may be able to get through the home-buying process without any appraisal of the home and other traditional mortgage paperwork.
In order to get approved for this type of loan, you must have a reasonably high net worth and a significant stock portfolio. The stock will be your collateral, instead of your new home. Of course, the loan will still have to be underwritten based on which stocks you own.
What's the plus side of a loan based on your stock portfolio? Well, there are actually quite a few positives: 1) If you find the right lender, the processing time may be a lot faster than for a traditional home loan; this is especially helpful if you want to close early; 2) Credit scores are not as much of an issue as with traditional mortgages -- that is not to say, however, that your credit score will not be taken into account; 3) The loan typically has a fixed interest rate, which is usually lower than a traditional mortgage rate; and 4) The loan is non-recourse.
Of course, there's a downside as well. What happens if the value of your stocks drop? You have to make up the difference with cash (or other outside financing). Also, you have no option to pre-pay the loan, so you have to work with the lender to find a term that you feel will best meet your needs!
In order to get approved for this type of loan, you must have a reasonably high net worth and a significant stock portfolio. The stock will be your collateral, instead of your new home. Of course, the loan will still have to be underwritten based on which stocks you own.
What's the plus side of a loan based on your stock portfolio? Well, there are actually quite a few positives: 1) If you find the right lender, the processing time may be a lot faster than for a traditional home loan; this is especially helpful if you want to close early; 2) Credit scores are not as much of an issue as with traditional mortgages -- that is not to say, however, that your credit score will not be taken into account; 3) The loan typically has a fixed interest rate, which is usually lower than a traditional mortgage rate; and 4) The loan is non-recourse.
Of course, there's a downside as well. What happens if the value of your stocks drop? You have to make up the difference with cash (or other outside financing). Also, you have no option to pre-pay the loan, so you have to work with the lender to find a term that you feel will best meet your needs!
Monday, May 3, 2010
New Disclosure Rules for Illinois Residential Real Estate Sales
It wasn't too long ago that the Radon Disclosure became a requirement for every residential sale in Illinois. Now, the Radon Disclosure has been modified. What's new? Well, 1) If you're selling a condo or co-op on the third story or higher, you no longer need to provide a Radon Disclosure at all; 2) If you are a seller and your home previously had elevated radon levels which have since been mitigated, you will have space to disclose this on the Radon Disclosure; and 3) A new Radon Disclosure form is now available and should be used whenever a Radon Disclosure is necessary.
There is a also a new Illinois Residential Real Property Disclosure form available! Again, this new form should be used in all Illinois residential transactions. There is one primary difference between the old disclosure and the new one -- now the seller is required to disclose whether or not he is aware if the property has been used as a meth lab in the past.
Real estate agents and for sale by owner homeowners beware -- the law requires the use of the new forms! If you don't have them already and are in the process of selling a house, make sure you obtain and complete these forms right away!
There is a also a new Illinois Residential Real Property Disclosure form available! Again, this new form should be used in all Illinois residential transactions. There is one primary difference between the old disclosure and the new one -- now the seller is required to disclose whether or not he is aware if the property has been used as a meth lab in the past.
Real estate agents and for sale by owner homeowners beware -- the law requires the use of the new forms! If you don't have them already and are in the process of selling a house, make sure you obtain and complete these forms right away!
Thursday, March 18, 2010
New FHA Rules Taking Effect Soon!
Many first-time homebuyers turn to FHA loans these days. After all, FHA loans have lower down payment requirements, and first-time homebuyers don't always have a lot of cash to put down. New FHA regulations, while making the business of lending a bit safer for the FHA, will certainly affect first-time homebuyers, who often have lower credit scores and less money.
What is the FHA doing? Specifically, it's making the following changes:
1) The up-front mortgage insurance premium (UFMIP) will be raised to 2.25%, up from 1.75%, effective April 5, 2010.
2) If the borrower's credit score is 580 or below, the minimum down payment will be increased to 10% of the purchase price of the home. Note that if the borrower's credit scroe is above 580, the current requirement of only a 3.5% down payment stands.
3) Sellers can only provide a maximum of 3% in closing cost credits. Previously sellers were allowed to provide up to 6% in concessions (though in practice, this was rare).
What is the FHA doing? Specifically, it's making the following changes:
1) The up-front mortgage insurance premium (UFMIP) will be raised to 2.25%, up from 1.75%, effective April 5, 2010.
2) If the borrower's credit score is 580 or below, the minimum down payment will be increased to 10% of the purchase price of the home. Note that if the borrower's credit scroe is above 580, the current requirement of only a 3.5% down payment stands.
3) Sellers can only provide a maximum of 3% in closing cost credits. Previously sellers were allowed to provide up to 6% in concessions (though in practice, this was rare).
Wednesday, March 10, 2010
New EPA Rules for Remodeling of Pre-1978 Homes
If you own a home built before 1978, there may be lead-based paint present in your home. Granted, you may have been through numerous remodeling projects, and you may have brand new drywall or paneling. However, unless you've had your home tested and confirmed that it is now lead-free, you have no way of confirming whether there is lead-based paint in your home or not.
The U.S. Environmental Protection Agency (the EPA) has issued new rules, which will take effect on April 22, 2010. If you are doing any remodeling work in your pre-1978 home after that date, you may only hire contractors that are certified by the EPA. Specifically, the EPA will be certifying contractors in practices that are "lead-safe". Of course, if the paint in your house is not being touched, then you may use any contractor you wish. However, most remodeling work does require at least some paint or touch-up. Therefore it is most likely you will have to hire a contractor certified by the EPA.
This new EPA rule applies not only to homes, but to schools and child care centers built before 1978 also, so long as children under the age of six are present in those schools and child care centers. However, the new rule does not apply to minor maintenance, or repairs where less than six square feet of lead-based paint is disturbed. If the work is on the outside of the home or school, the rule only applies if more than twenty square feet of lead-based paint is disturbed.
In order to avoid accidental lead poisoning, anyone with a home built before 1978, or anyone who has children in a school built before 1978, should be diligent to make sure that any lead-based paint present in their home or school does not endanger the health of their family!
The U.S. Environmental Protection Agency (the EPA) has issued new rules, which will take effect on April 22, 2010. If you are doing any remodeling work in your pre-1978 home after that date, you may only hire contractors that are certified by the EPA. Specifically, the EPA will be certifying contractors in practices that are "lead-safe". Of course, if the paint in your house is not being touched, then you may use any contractor you wish. However, most remodeling work does require at least some paint or touch-up. Therefore it is most likely you will have to hire a contractor certified by the EPA.
This new EPA rule applies not only to homes, but to schools and child care centers built before 1978 also, so long as children under the age of six are present in those schools and child care centers. However, the new rule does not apply to minor maintenance, or repairs where less than six square feet of lead-based paint is disturbed. If the work is on the outside of the home or school, the rule only applies if more than twenty square feet of lead-based paint is disturbed.
In order to avoid accidental lead poisoning, anyone with a home built before 1978, or anyone who has children in a school built before 1978, should be diligent to make sure that any lead-based paint present in their home or school does not endanger the health of their family!
Wednesday, March 3, 2010
How HAFA Can Help You
If you qualified for a loan modification and were unable to work out a plan you could afford, and you otherwise qualify under the Home Affordable Foreclosure Alternative Program (HAFA), you should know what you can expect for participating in the program.
First and most important, you will have a plan for completing a short sale or deed in lieu of foreclosure. Many short sales languish for months. Often buyers get fed up and walk out of the deal, just waiting for the seller's lender's response. HAFA is expected to speed up the short sale process; prior to listing the property, homeowners will receive pre-approved terms for their short sales.
Second, and also important, you will be released from liability for any portion of the debt that is not paid. In other words, if you bought your home with a $300,000 mortgage, and sold the home for $250,000 in a HAFA-approved short sale, you will not be liable for the $50,000 balance to your lender.
Third, if you are able to complete a short sale or deed your home to the bank in lieu of foreclosure, you will receive $1500 towards your moving costs.
Of course, your bank is not required to sign up for HAFA, but banks that do sign up receive some incentives also. Namely, the bank can get $1000 towards covering their administrative costs. If the bank is a secondary lienholder and agrees to relinquish its lien, the bank can get up to $3000 of government monies through a matching program.
If you are having trouble with your loan payments, look into HAFA to see if you qualify! For a list of criteria to qualify for HAFA, click here.
First and most important, you will have a plan for completing a short sale or deed in lieu of foreclosure. Many short sales languish for months. Often buyers get fed up and walk out of the deal, just waiting for the seller's lender's response. HAFA is expected to speed up the short sale process; prior to listing the property, homeowners will receive pre-approved terms for their short sales.
Second, and also important, you will be released from liability for any portion of the debt that is not paid. In other words, if you bought your home with a $300,000 mortgage, and sold the home for $250,000 in a HAFA-approved short sale, you will not be liable for the $50,000 balance to your lender.
Third, if you are able to complete a short sale or deed your home to the bank in lieu of foreclosure, you will receive $1500 towards your moving costs.
Of course, your bank is not required to sign up for HAFA, but banks that do sign up receive some incentives also. Namely, the bank can get $1000 towards covering their administrative costs. If the bank is a secondary lienholder and agrees to relinquish its lien, the bank can get up to $3000 of government monies through a matching program.
If you are having trouble with your loan payments, look into HAFA to see if you qualify! For a list of criteria to qualify for HAFA, click here.
Tuesday, February 23, 2010
Do You Qualify for Short Sale Assistance Under the HAFA Program?
The new Home Affordable Foreclosure Alternative Program, or HAFA, is meant to assist homeowners who are eligible for a loan modification but cannot work out a payment plan they can afford. Instead of being foreclosed, HAFA assists such homeowners with the short sale or deed in lieu of foreclosure process. HAFA is voluntary, and lenders are not required to sign up for it. Do you qualify under HAFA? Here's a checklist to see if you do:
1) Your loan is a Freddie Mac or Fannie Mae loan. However, you may qualify even if it is NOT a Freddie Mac or Fannie Mae loan.
2) Your bank or servicing company signed up to participate in the Home Affordable Modification Program (HAMP) by December 31, 2009, AND your bank has also since signed up to participate in HAFA.
3) The property in question is your primary residence.
4) Your loan is the first mortgage on the property.
5) You took out the loan before January 1, 2009.
6) Your unpaid balance is less than $729,750.
7) Your monthly mortgage payment is exceeds 31% of your gross income.
8) Your loan is already in default, OR default is reasonably foreseeable.
1) Your loan is a Freddie Mac or Fannie Mae loan. However, you may qualify even if it is NOT a Freddie Mac or Fannie Mae loan.
2) Your bank or servicing company signed up to participate in the Home Affordable Modification Program (HAMP) by December 31, 2009, AND your bank has also since signed up to participate in HAFA.
3) The property in question is your primary residence.
4) Your loan is the first mortgage on the property.
5) You took out the loan before January 1, 2009.
6) Your unpaid balance is less than $729,750.
7) Your monthly mortgage payment is exceeds 31% of your gross income.
8) Your loan is already in default, OR default is reasonably foreseeable.
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