Posted: under Financing, Foreclosure, Home Inspection, loan modification.
The nice thing about a real estate blog is that there’s always a ton of stuff out there that other people are writing that I can piggyback off of…
In Sour Home Market, Buying Often Beats Renting. I love a good article that really looks into the facts under-girding the “home ownership myth.” A simple way to do the buy vs. rent comparison is to look at something called the rent ratio: the purchase price of a house divided by the annual cost of renting a similar one. The number 20 provides a useful rule of thumb. When you do the math, you discover that a ratio above 20 means you should at least consider renting, especially if you may move again in the next five years or so. When the ratio is well below 20, the case for buying becomes a lot stronger. Here’s a great buying vs. renting calculation tool included in the piece.
10 Things Home Inspectors Won’t Say. I love some of these ’10 Things’ lists from SmartMoney…hey they rip on lawyers too sometimes. It’s amazing for someone who has/does handle a pretty high volume of residential real estate legal work the HUGE variety of thoroughness and quality that I observe in written home inspections. Not that the number of pages is a perfect indicator but I’ve seen home inspections range from 3 to 50 pages. The points I would highlight from the list are the downside of an inspector being too loyal to a real estate agent and lack of malpractice insurance. Like attorney selection, this isn’t an area to trust an agent on and simply you cannot use an inspector who does not have errors/omissions coverage…if there’s a problem that’s your potential recovery pot of $$.
When Not to Pay Down a Mortgage. This piece does a great job crunching the numbers to settle this question, particularly in a low mortgage interest rate environment. First, you don’t even think about making extra mortgage payments unless you’ve paid down all high interest rate debt, have a decent emergency fund set aside, and you’re maximizing things like employer match contributions to a retirement account. Then you sort of balance the potential return of investment on an alternative investment versus paying down the debt of your mortgage interest. But the article does point out that your real interest rate on your mortgage isn’t what’s on the Note but also to knock off the mortgage interest tax deduction to see your real interest rate. And there’s also the empowering concept of being 100% debt free too.
And, surprise surprise, another government attempt to deal with the housing crisis…here and here. Anyone else cynical about another use of taxpayer funds to “help” homeowners in financial difficulty? I ask the question in no way meaning that I lack empathy for people in tough financial situations but rather as someone who has followed the general ineffectiveness of government attempts to assist mortgage-holders over the last 1-2 years. The new efforts target three areas: **Giving the unemployed a 3 month pass on mortgage payments; **FHA refinance incentives for underwater mortgages; and, **giving lenders incentives to write-down loan balances.
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Apr 23 2010
Posted: under Buyers, Foreclosure, Taxes.
Tags: Real Estate News Roundup
What we’ve been reading the last week or so…
The Second City is Becoming Second-Home City. I’m seeing this up close…we’ve had two closings in the last month where older, empty-nesters are buying second homes in downtown Chicago. Interesting commentary from a Swiss family who loves the vitality and affordability of Chicago and it’s easy to commute anywhere in the world. Chicago’s cool again.
Tax Bill Appeals Taking Rising Toll on Governments. Well you knew this had to come, right? I’ve been impressed in my local community we’ve seen many municipal workers agreeing to not take pay raises and the like to control costs. I don’t know much about municipal governance but many local taxing bodies are capped at a 5% increase aroung Illinois so there may be more blood in the streets.
Paper Avalanche Buries Plan to Stem Foreclosures. Just had to throw this in here…yada, yada, yada, yada multiplied by 50. A blurb exemplifying the problem:
Ms. Montenegro, an intern at a local company that seeks loan modifications, dials Washington Mutual to check on the status of an application for a homeowner whose income has plummeted. She endures a Muzak-scored purgatory while on hold. Syrupy-voiced customer service representatives chide her for landing in the wrong department. She learns that the documents her company sent in have simply vanished — for the third time since November.
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Jul 10 2009
Posted: under Foreclosure.
Tags: Cook County Circuit Court Clerk
Two thumbs up to Circuit Clerk Dorothy Brown for publicizing this and putting up a link on the Website concerning possible $$ out there owed to persons who saw a home get foreclosed upon but then, upon public sale of the property, the property sold at sheriff’s sale for MORE than the amount owed on the mortgage…that overage is the former homeowners $$! Here’s the Sun-Times article link and the circuit clerk’s search page by name. I don’t do it anymore but a couple years back I’d actually conduct some auctions for foreclosure cases that had gone through the federal court system…mostly at the Lake County Courthouse in Waukegan or in the lobby of Daley Center. And, surprisingly every so often you’d get a sort of bidding war where I’d bet the price wasn’t that much worse than a regular old commercial sale.
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Jun 21 2009
Posted: under Financing, Foreclosure.
Tags: loan modification
I haven’t.
I see a bit of smoke coming from the White House and it seems tons of ‘loan modification’ law firms have popped-up but I have not seen a loan modified. And I’ve worked with several people in attempting to do this but the banks won’t do it. Here’s another piece describing the lack of help available. Great quote from Treasury Department spokeswoman about non-success:
A Treasury spokeswoman, Jenni Engebretsen, confirmed that homeowners like Ms. Ulery — current on their mortgages yet grappling with a hardship like unemployment — were eligible for loan modifications under the program. She said mortgage servicers had offered to modify more than 100,000 loans since the department announced the program.
But how many loans have been modified? Ms. Engebretsen declined to say, noting that the Treasury was working with mortgage companies to “fine-tune reporting systems.”
So how many loans have been modified? My answer, virtually none.
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Jun 03 2009
Posted: under Foreclosure.
Tags: Cook County
We wrote about the delays brought about due to a change made in the Cook County Chancery Division here. As more of an observer of foreclosure rather than a practitioner these seemed like a short delay that wouldn’t have too much impact. But I got this e-mail from a local big foreclosure practitioner that foreshadows a potential major shift in where foreclosure cases are filed:
Cook County has historically made cases very hard to navigate through the system just because of the volume. Lately however, the Judges have become debtor friendly and creditor unfriendly. The straw that broke the plaintiff’s bar was a General Order entered on April 1st by the Presiding Judge. It effectively is creating a judicial moratorium of 6 months or more.
With the future looking bleak in Cook County, the plaintiff’s bar began to explore the possibility of filing in Federal Court. Yes we need diversity and that will have to be overcome. In addition we needed to get the cooperation of the Clerk of the Court and the Chief Judge due to the sheer volume of cases that potentially could be filed. Recently a couple of us sat down with Judge Holderman and discussed the issues. We were pleased that they are receptive to our overtures to filing in Federal Court. Thus, as a plaintiffs bar we are moving forward to identify cases that can be filed in Federal Court.
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May 23 2009
Posted: under Buyers, Condominiums, Foreclosure, Sellers.
Tags: Roundup
I like that title, I think we’ll use this as sort of an ongoing series providing chunks of news that we see covering the real estate industry. Ok, as Dr. McLaughlin would say, Issue 1:
First this from the Sun-Times: Irving Park Condo Owner Singing an Angry Tune. Nothing new to readers of this blog…building defects, no association reserves, and a condo developer no where to be found. The Jeopardy answer: What’s the worst type of property to buy??
A very appropriate piece describing this era in real estate: There’s No Place Like (Someone Else’s) Home. I think it’s sort of a creative way one up from home staging…The house is owned by a builder, who hasn’t been able to sell it for more than a year. And while someone really does live here, it’s as part of an elaborate bit of stagecraft aimed at moving Southern California’s echoing inventory of luxury vacant homes.
This $1.2 million seaside pied-a-terre is occupied by Johnna Clavin, a 45-year-old Los Angeles event planner and decorator who has seen business slow. In exchange for giving the townhouse a stylishly lived-in look, she gets to stay there at a steep discount and stands to earn a bonus if the house sells fast.
Finally, U.S. Expanding Foreclosure Prevention. Sounds like the 2nd shoe to drop of Obama’s foreclosure prevention plan…The new measures announced Tuesday would especially help many distressed homeowners who have both first and second mortgages — and can’t afford either. The Treasury Department now wants lenders and their customer-service agents to agree to modify both loans as part of a comprehensive solution.
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Apr 30 2009
Posted: under Foreclosure.
Here’s the feature from the Sunday Trib. regarding the impact foreclosures are having on many non-Cook County Municipalities. Not particularly newsworthy…suprise, there have been escalating foreclosures EVERYWHERE!
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Apr 06 2009
Posted: under Foreclosure.
That’s a new one, eh?
Here’s the article I saw reporting that banks are more and more saying we don’t want to own certain properties…i.e., it’s cheaper for us to take a judgment, likely a tax write-off too, but then don’t actually re-purchase the property to deal with the possession-related upkeep. From the NYTimes:
The soft housing market and the vandalism that often occurs when a house sits empty are the two main factors influencing the mortgage holders’ decisions to walk away, said Larry Rothenberg, a lawyer for Weltman, Weinberg & Reis, one of the larger creditors’ rights firms in the country.
“Oftentimes when the foreclosure starts out, it’s a viable property,” Mr. Rothenberg said, “but by the time it gets to a sheriff’s sale, it might not have enough value to justify further expense. We’ve always had cases where property was vandalized or lost value, but they were rare compared to these times.”
The problem seems most acute at the bottom of the market — houses that were inexpensive to begin with — and with investment properties, where investors and banks want speedy closure by writing off bad loans as losses. Banks and investors typically lose 40 percent to 50 percent of their investment on every foreclosure.
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Apr 01 2009
