Dragging Out The Foreclosure Process
July 8th, 2009 categories: Chicago Real Estate News
Losing a home to foreclosure is a terrible experience. These days, it’s also an experience that takes longer and longer to reach resolution.
The Washington Post recently ran an interesting profile of families who are no longer able to make their monthly mortgage payments. These families know that they’re losing their homes to foreclosure. The only problem is that their banks or lenders haven’t been able to foreclose on their residences yet. Lenders are just too busy dealing with the record number of foreclosures on their dockets to begin the process in a timely manner.
This may seem like a blessing: After all, it lets families live in their homes basically for free while their banks or lenders dawdle. But to the families interviewed in the Post’s story, it’s more of a long nightmare.
Many of these families have packed up and moved on to lower-cost housing or rental options. But because their banks or lenders haven’t yet foreclosed on their former homes, the owners are still responsible for maintenance.
This is bad news because it also means that the nation’s foreclosure numbers will only continue to rise. The numbers will surely jump as banks and lenders slowly begin to catch up to the growing number of homeowners who are no longer paying their monthly mortgages but are still living in their homes.
I always have the same advice for homeowners worried about losing their own residences to foreclosure: Call your lender. Right away.
If you’ve missed payments, or fear that you’ll soon begin missing them, you need to immediately call your mortgage lender. Remember, your bank or lender doesn’t want you to lose your home. Foreclosures are a blessing for no one. Instead, your lender will do whatever it can to help you stay in the home.
This may mean renegotiating the terms of your loan, giving you a grace period to catch up with missed payments or lowering your interest rate. But you’ll never know just what compromise can be reached if you don’t call first.
PLEASE CLICK HERE TO VIEW PROPERTIES NOT YET ON THE MARKET.
| Discussion: No Comments »
FHA Changes Will Make City Condo Sales Easier
July 6th, 2009 categories: Chicago Info/News, Economic Recovery, For Buyers, For Homeowners, For Sellers
It’s no secret that the Chicago condominium market is in a slump. Developers overbuilt during the housing boom, and now unsold condominium units are clogging the city market.
This is bad news for anyone trying to sell a condominium. There are simply too many units out there for too few buyers. Part of the problem is that it’s always been more difficult to obtain mortgage financing for condo units than it has been for single-family homes. This cuts down on the number of buyers who can even attempt to buy a city condo.
But the FHA last month approved a change that may make it easier for sellers to move their city condo units, and for buyers to purchase them.
The new FHA guidelines spell out changes in the way lenders approve financing for condo units. The guidelines are complicated, but if you’re trying to sell a condominium unit, there’s one thing you need to know: The new guidelines will make it easier for potential buyers of your condo to qualify for FHA financing.
This can only help you move that condo. It opens the door to a wider pool of buyers. In fact, this story on the Web site of the National Association of REALTORS says that a growing number of condo boards are voting to approve building-wide approval from the FHA.
If an entire condominium building has FHA approval, buyers can get their mortgage loans in as little as two weeks and, even more importantly, with a down payment of as little as 3.5 percent of a condominium unit’s purchase price.
The truth is, many first-time homebuyers looking to spend less than $500,000 on a condominium, are hoping to obtain FHA financing. For many of these buyers, it’s the only way they can afford to buy a condo.
The FHA condo-approval changes, then, will have a dramatic positive impact on the residential real estate market because a greater number of first-time buyers will be able to purchase units. Sellers can then move on to buy their own residences, whether they’ll invest in another condo or a townhome or single-family home.
We often complain when government entities enact legislation that makes our lives more difficult. In this case, though, it’s time to appreciate the government: The FHA changes just might help boost the city’s stagnant condo market.
PLEASE CLICK HERE TO VIEW PROPERTIES NOT YET ON THE MARKET.
| Discussion: 1 Comment »
City Home Sales Continue to Show Improvement
July 1st, 2009 categories: Chicago Real Estate News
With each passing month, it becomes more evident: Chicago’s housing market has stabilized, and has begun its long-awaited recovery.
The numbers from the Illinois Association of REALTORS® tell the story. The sales of existing homes in Chicago rose 11.5 percent in May. A total of 1,537 existing condominiums and single-family homes were sold in the month. In April, only 1,378 of these residences were sold.
At the same time, the median sales price of these homes continued its steady, gradual rise. Condominiums and single-family homes sold in the city in May saw their median sales price go up 2.3 percent to $225,000. In April, the median sales price stood at $220,000.
Of course, this is a slow recovery. Both sales and median prices are still significantly down from last year at this time.
According to the REALTORS® association, May sales in Chicago were down 27.5 percent from the 2,119 homes sold during the same month one year earlier. At the same time, the median sales price in Chicago was down 29.5 percent from the price of $319,000 that sellers fetched a year ago.
The numbers may not be quite as high as we’d like. But the fact that they are trending upwards – no matter how gradually – is good news. This marks the fourth straight month in which both sales and median sales prices have risen for homes sold in Illinois.
It’s good to see some normalcy returning to the Chicago housing market. I, for one, hope to see sales and sale prices continue to their upward movement.
PLEASE CLICK HERE TO VIEW PROPERTIES NOT YET ON THE MARKET.
| Discussion: No Comments »
The Power of the Two-Flat
June 29th, 2009 categories: Chicago Real Estate News
The traditional Chicago two-flat – multiple-story homes common on the city’s North Side – has always been a great home for first-time buyers. That’s because these buyers could live on one floor and then rent out the other. This rental income helps the first-time buyers pay their mortgage.
The plan, then, is to wait as the two-flat appreciates. When it’s time to sell, you’ll make a nice profit that you can use toward your next home.
Does this plan still work? Yes. In fact, according to a story in the Chicago Tribune, the two-flat is attracting a growing number of first-time buyers today.
Two-flats in neighborhoods such as Lincoln Park, Lakeview, Lincoln Square, Ravenswood and other top Chicago communities are more affordable than they’ve been in years. According to the Tribune story, these homes were some of the first lost to foreclosure during the housing slump.
That leaves the prices on today’s two-flats in a range that’s affordable to many first-time buyers. Experts quoted in the Tribune story say that many two-flats today are selling for the same amount that they were moving for in 2000 and 2001.
The story also explains that financing a two-flat is relatively simple for owners who plan to live in the building. These owners can acquire an FHA loan that allows owner-occupants to put less than 5 percent down. The loan also allows owner-occupants to apply potential rental income to their own incomes. This way, owners may quality for a higher loan than they would if they were buying a traditional single-family home or condominium.
Of course, there are some downsides to living in a two-flat. The main one: You may not like being a landlord. It’s not always easy to live with renters. When something in your renter’s unit breaks, you’ll have to get it fixed. You’ll also have to do the background work to make sure you’re renting to occupants who have a history of paying their bills on time.
If you are willing to do this work, though, buying a Chicago two-flat may be the right choice for you. It might serve as your entry into the Chicago housing market.
PLEASE CLICK HERE TO VIEW PROPERTIES NOT YET ON THE MARKET.
| Discussion: No Comments »
Will New Governmental Agency Prevent Another Mortgage Crisis?
June 26th, 2009 categories: Chicago Real Estate News
The Obama administration last week announced a new plan designed to prevent any future mortgage meltdowns like the one we’ve seen during the housing slump. The plan would result in a new consumer protection agency that would have broad powers to revamp the way the mortgage-lending business works.
According to a feature story on the Politico blog, the proposed new agency would require mortgage lenders to offer consumers loans with simple terms in addition to those with more complex terms. Borrowers would have to opt out of the simple mortgage loan products if they wanted to instead go with the more complicated versions.
The new agency might also place more responsibilities on mortgage brokers. Though nothing is final yet, brokers might have to make sure that their customers can afford the mortgages they write for them. The new consumer agency might even ban certain lending practices such as pre-payment fees, which on some loans are passed on to borrowers who pay off their mortgage loans early.
The consumer protection agency wouldn’t concentrate only on mortgage lending, but would also oversee the way credit card companies charge their customers.
It’s all part of an effort, Pres. Barack Obama said last week, to prevent another financial disaster like the one that pushed the country into the recession we’re still trying to work our way out from.
Is this new agency a good idea? Anything that protects consumers is a positive. But borrowers have to remember one thing: They have to use some common sense, too, when applying for mortgage loans.
First, it’s important for borrowers to only work with reputable mortgage professionals. Despite what you might read in the newspapers, the vast majority of mortgage loan officers, bankers and brokers are honest, hard-working and smart professionals. If you’re looking for a loan officer, check with your REALTOR®. He or she should be able to recommend several.
Secondly, if you feel that a loan officer is trying to talk you into taking out a mortgage product with which you are uncomfortable, walk away. There are many more professional mortgage loan officers out there.
Finally, take an honest look at your financial situation before applying for a mortgage loan. You know how large of a mortgage payment you can make each month. Don’t try to stretch yourself too thin financially to get into a more expensive home.
PLEASE CLICK HERE TO VIEW PROPERTIES NOT YET ON THE MARKET.
| Discussion: No Comments »
