Lost Your Home To Foreclosure In Chicago? You Might Be Owed Money
April 2nd, 2012 categories: Chicago Real Estate News, Economic Recovery, For Homeowners, For Sellers, Foreclosures, Housing Market
Some former Chicago homeowners who lost their residences to foreclosure may be due some money from Cook County, according to a recent story by NBC 5.
The Cook County Clerk of the Circuit Court currently holds a pot of about $16 million in surplus funds created after foreclosed homes were re-sold. Those foreclosed homeowners who owed less on their mortgage loans than what these homes were sold for will receive the extra funds.
Of course, not everyone is owed a big payday. Dorothy Brown, clerk of the circuit court, told NBC 5 that one homeowner is owed just 13 cents. Of course, Brown also said that another homeowner is due $400,000.
The problem, though, is tracking down all of the former Chicago homeowners who are owed money. Many of these owners don’t realize that they are owed the money. Many who have suffered through the foreclosure process don’t leave forwarding addresses.
There is a way for Chicago residents who’ve gone through foreclosure to quickly determine if they are owed funds. They simply have to log onto the Cook County Clerk of the Circuit Court Website and enter their last names, first initials and phone numbers.
Brown told NBC 5 that she wanted to set up the Web site to make life at least a bit easier for those who have lost their residences to foreclosure. After all, these families have already been through an extraordinary amount of stress. Maybe the money they are owed can help at least a bit. Many homeowners who have lost their residences to foreclosure are also saddled with large amounts of credit-card debt and other unpaid bills. Every little bit of extra money, especially in today’s challenging economy, can help.
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Will Cash Incentives Boost Number Of Short Sales?
March 27th, 2012 categories: Chicago Real Estate News
Will cash incentives provided by banks convince more homeowners to consider short sales to move their homes?
That’s the question asked by a recent story in the Chicago Tribune. And like most housing-related matters today, the answer isn’t clear.
In a short sale, banks agree to allow homeowners to sell their residences for less than what they owe on their mortgage loans. This helps homeowners who need to move their homes move quickly; it’s easier to sell a residence, after all, if you can price it lower. Many homeowners who go the short sale route are in danger of falling into foreclosure. For the banks, a short sale is a better alternative; even though they’ll still lose money on the sale, banks won’t have to go through the expense and hassle of taking over a home through the foreclosure process and then have to sell it on their own.
Not all struggling homeowners, though, want to go through a short sale. Many would instead prefer that their banks lower the principal balance on their mortgage loans, leaving these owners with a smaller monthly mortgage payment. Others might fight a foreclosure action in court. Still others will simply stop paying their mortgage payments and live in their homes for free for months or longer until their banks finally foreclosure on their homes.
Banks obviously prefer short sales to either of these options. It’s why several banks are actually providing cash incentives to encourage struggling homeowners to sell their residences through short sales.
According to the Tribune story, some sellers are nabbing incentives of as much as $35,000 from their banks to close a short sale.
Whether this is a trend that continues remains to be seen. But homeowners who are considering a short sale should ask their REALTORS®. Some of the country’s largest lenders, such as Citigroup, Bank of America, Wells Fargo, Ally Financial and JP Morgan Chase, are offering short-sale incentives.
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The Relationship Between Unemployment And Home Values
March 26th, 2012 categories: Chicago Real Estate News
The housing market will not boom again until unemployment drops. People who aren’t working, after all, can’t afford to make the major investment that buying a single-family home or condominium represents.
That’s why anyone who’s rooting for a more robust recovery in the housing market had to have been cheered by the recent news that jobless claims across the country in mid-March fell to a four-year low.
According to a story in the Chicago Tribune, people made 14,000 claims for unemployment benefits in March. That puts the United States on pace for 351,000 new claims for unemployment benefits this year.
That comes out to a four-year low that the country previously reached in February.
Of course, the country still has a long way to go before unemployment falls to pre-recession levels. Yes, the 8.3 percent unemployment we’re seeing now is a three-year low. But there are still far too many people out of work.
And until these consumers return to the workforce, don’t expect the country’s housing market to recover at a quicker pace.
With spring on the way, we’ve already seen in Chicago home sales increase steadily the last several months. What we haven’t seen, though, are price increases. The median sales value of condominiums and single-family homes in Chicago, in fact, continue to fall each month.
That’s a trend that shows few signs of stopping. And until the unemployment numbers locally and across the nation fall even lower, don’t expect to see local home values rise.
This is still all about supply and demand. Housing prices won’t rise again until the large inventory of homes on the market – including the many that are in the middle of the foreclosure process – is reduced. It’s only when supply falls that prices will rise. Right now, there are simply too many homes available for sale. Consumers who think one residence is priced too high can move on to another home that fits in their price range.
And this is a situation that will remain in place until unemployment falls and more consumers feel confident enough to purchase a home.
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Expect Chicago Foreclosure Numbers To Keep Rising
March 23rd, 2012 categories: Chicago Real Estate News
Foreclosures remain a problem in Chicago. And until foreclosure condominiums and single-family homes here are bought up and removed from the market, don’t expect local home values to rise.
According to a feature story in the Chicago Sun-Times, the number of homes in the Chicago area receiving foreclosure filings rose 43.2 percent in February when compared to the same month one year earlier.
If you’re desperate for some good news, the number of foreclosure filings in the month did drop 8.5 percent when compared to January of this year.
Still, the large rise in year-over-year foreclosure filings is not news that anyone interested in selling a home wants to hear. Those ready to buy a condo or single-family home, though? That’s a different story.
Foreclosures drag down the average median sales price in an area. There’s a simple reason for this: Foreclosures are usually priced lower than non-distressed homes sold. Consumers, then, will often gravitate toward lower-priced foreclosures if they are in good condition and situated in a solid location.
This forces other homeowners to lower their asking prices. It’s the only way they can compete with comparable foreclosure properties located near them. This is bad news for sellers. Buyers, though, will have the continued opportunity to purchase more home for less money.
According to the Sun-Times story, 12,587 homes in the Chicago area received foreclosure filings in February. That represents one in every 302 area homes. In the same month last year, 8,788 homes received foreclosure filings.
The Sun-Times story quotes a spokesperson from online foreclosure source RealtyTrac who says that Chicago-area residents should expect to see a steady diet of year-over-year increases in local foreclosure filings. That’s because last year, banks slowed their foreclosure processes as they tried to sort through documentation problems related to the robo-signing foreclosure scandal.
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Even With Fee Increase, FHA Loans Still Right Choice For Chicago Buyers
March 19th, 2012 categories: For Buyers, Mortgage Info, Refinancing
Mortgage loans backed by the U.S. Department of Housing and Urban Development’s Federal Housing Administration, better known as FHA loans, will soon become more expensive for homebuyers.
According to financial Web site Bankrate.com (RYAN: http://www.bankrate.com/financing/mortgages/fha-fees-on-the-rise-again/), starting April 1 borrowers will pay more for upfront mortgage insurance provided by the FHA. This follows a rate increase that came in April of last year. As Bankrate reports, FHA loan fees are now at their highest point in the government agency’s history.
Premiums for FHA insurance will rise from 1 percent to 1.75 percent of the base mortgage loan that borrowers are taking out. The FHA says that the increase will add about $5 a month to the mortgage fees that borrowers pay.
That average $5 increase might not seem like a lot. But buying a home is not an easy financial task for many purchasers today. They won’t appreciate any fee increase.
That being said, FHA-backed loans are still terrific options for today’s home buyers. Of course, the FHA does not originate loans. Instead, the government administration insures them. This doesn’t change the fact, though, that FHA loans offer several benefits to homebuyers.
The most important? For most borrowers, FHA-insured loans require down payments of just 3.5% of a home’s final purchase price. This is a key benefit. Conventional mortgage loans often require buyers to put up at least 10 percent of a home’s purchase price as a down payment.
Consider a single-family home or condominium in the Chicago area that costs $200,000. A 10% down payment would require buyers to come up with $20,000. If these same buyers had good enough credit to qualify for a 3.5% down payment with an FHA loan, they’d only have to come up with $7,000. That’s a big difference.
FHA-backed loans are also available to homebuyers with lower credit scores. Borrowers with FICO credit scores of at least 580 will qualify for the 3.5% down payment requirement. Those with credit scores of 500 to 579 will be able to take out an FHA loan with a down payment requirement of 10 percent.
Those borrowers with credit scores under 500 will not qualify for FHA financing.
Even with the fee increase, then, an FHA loan is still a good chance for many Chicago homebuyers.
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