Among all the other things that Fannie Mae does, it also maintains a Home Purchase Sentiment Index. Here’s what their latest figures show: Since March, the number of people who think home prices are going to up over the next 12 months has increased. Additionally, more people also seem to think that mortgage rates will go up over the next year. 11% of people state that their household income is significantly higher than it was a year ago. 15% of people say that right now is a great time to seller a home. This is the highest ever. Interestingly, 30% of buyers say now is a good time to buy. While that seems high compared to the sellers in number 4 above, it’s actually the lowest it’s ever been. 74% of people state they are not concerned with losing their job.
Back when the real estate market was hot, in the mid-2000s, people were borrowing against the equity in their homes for pretty much anything and everything. In 2005, in fact, American homeowners borrowed more than $350 billion. After the economy crashed, whether out of fear or because their homes no longer had equity, people stopped borrowing against their homes. In 2011, home equity borrowing was down to about $73 billion, just about a fifth of what it was during the real estate hey-days. But since then, it’s been gradually increasing. In 2014, Americans borrowed about $121 billion against their homes. In 2015, that amount went up by 20%, to about $146 billion. As the values of their homes increase, borrowers are taking advantage of their newfound (or returned) equity to update their homes, among other things. Of course, it’s still not always easy to get a loan, what with tight… read more →
If you’re one-half of a married couple buying a house, chances are that you’re applying for your loan together. Stop. Think about it. Is that the right move? If it’s not necessary – that is, if you don’t need both of your incomes to qualify – should you do it? Maybe, maybe not. It depends on your situation, and a lot depends on something that most people don’t know – usually, lenders will price out your loan application based on the lower credit score in a couple, not the higher one. If your credit score is 750 and your spouse’s or partner’s is 670, your interest rate will probably be higher based on your spouse’s or partner’s lower credit score. On the other hand, if you both score around the same, it won’t make much of a difference. This interesting and fairly unknown rule is known as the Minimum FICO… read more →
What makes VA loans different? First of all, the VA does not actually lend money. Rather, it guarantees loans made by other banks. These types of loans are only available to veterans, currently active military, National Guard members, and the spouses of people in the military who died or were disabled on duty. If you qualify for a VA loan, you do not have to make any downpayment at all, so long as you are purchasing a primary residence. Moreover, you can use a VA loan not only as a first-time homebuyer, but for subsequent purchases as well. On the flip side, the VA charges an upfront fee of 1.25% – 3.3% of the loan amount. The upfront fee is usually included in the loan amount, although the seller may agree to pay it on behalf of the buyer as well. Also, the VA limits how much it will lend… read more →
Long before the real estate market crashed, developer Kimball Hill signed an agreement with the City of Elgin to develop land. Kimball Hill was to improve the land at its expense, and Elgin would then annex the land into the City of Elgin. Kimball Hill obtained bonds from two separate insurance companies to guarantee its performance of the Annexation Agreement it had signed with Elgin. Back in 2003, when all of this was done, the real estate market was booming. Unfortunately, by the time the property was developed, the economy had crashed; Kimball Hill filed bankruptcy in 2008. A company called TRG purchased the property out of bankruptcy, and subsequently refused to make the improvements Kimball Hill had promised to make in the Annexation Agreement. As a result, in 2012 Elgin sued TRG and both insurance companies that had issued bonds. Eventually, the case was appealed, and in City of… read more →
The SBA 504 program is a refinancing program for owner-occupied commercial real estate. It will be available starting in mid-2016, and will likely be a popular choice amongst small-business owners who also own their own real estate. If you’re looking to refinance your commercial property, it might be worth looking into the SBA 504 program. To qualify, your commercial property must be owner-occupied, and the project cost cannot exceed $15,000,000. Moreover, you need to be able to put 10% down. If you qualify for financing under SBA 504, you will get a fixed-interest rate (presumably lower than conventional financing, although that remains to be seen). You will essentially have two mortgage liens on your real estate. The first lien will be for 50% of the total project cost. The second lien will cover an additional 40% of the project cost, but it will be 100% guaranteed by the SBA. The… read more →
Condominium associations can generally determine whether or not they want to allow renters. If they choose to allow renters, they can then decide to what extent renters are allowed. They can limit the term of the lease, the total units available for rent, and require tenants to submit to background checks. But whatever they do, they have to go about it the right way. A recent decision by the appellate court, Stobe v. 842-848 West Bradley Place Condominium Association, 2016 Il App (1st) 141427 (Feb 3, 2016) Cook Co., 3rd Div., proves just that. In Stobe, the association’s condominium declaration allowed owners to rent their units. The condominium association’s board, however, had adopted rules that limited how many units could be leased at a time. The plaintiff argued that this conflicted with the condominium declaration. Clearly, the intent was to allow owners to lease their units, and it was wrong… read more →
As you may know, if you are facing foreclosure, under the Homeowner Protection Act, the bank is required to notify you that you have a 30-day grace period before they will file a foreclosure suit. During those 30 days, the bank cannot file suit against you. Moreover, the bank needs to maintain proof that they sent you notice of the 30-day grace period. In Bank of America, N.A. v. Adeyiga, 2014 IL App (1st) 131252 (September 30, 2014) Cook Co., 5th Div., the lender found this out the hard way. The lender foreclosed the Adeyigas and completed a judicial sale of the property. The Adeyigas filed suit, claiming, among other things, that the bank breached the Homeowner Protection Act by failing to provide the mandatory 30-day grace period. The lender was unable to produce evidence that it had, in fact, sent a grace-period notice, or when it was sent. The… read more →
What if you buy a condominium, relying on the disclosure information the condominium association board or management company provided you, only to find out that they didn’t give you everything they should have? What if you would never have bought the condominium if the association had disclosed all of the information they were supposed to? Well, you’re out of luck. In a recent case, D’Attomo v. Baumbeck, 2015 IL App (2d) 140865, this very issue was decided by the Illinois Appellate Court in favor of the condominium association. In that case, the contract purchaser of the unit sued the condominium association board, stating that they had breached their fiduciary duty by not providing the buyer with a copy of the amendment to the condominium declaration which prohibited leasing. The court held that the condominium association has no fiduciary duty to a contract buyer. Their duty is only to existing owners… read more →
Although it may not seem like it, banks abandon foreclosures all the time. And to help guide them through this process, the Federal Deposit Insurance Corporation (the FDIC) issued guidelines last week to clarify its expectations for lenders canceling a foreclosure. The FDIC encouraged lenders to work with borrowers to come up with an alternative that would allow borrowers to stay in their homes, which would make it more likely that homes would remain well-maintained and care form. The FDIC stated that when abandoning a foreclosure, banks should: Comply with state and local laws. Notify state and local governments and other relevant authorities of their decision to abandon the foreclosure. Notify the borrower that they are abandoning the foreclosure. Notify the borrower that they have the right to remain in the property for the time being, until the property is sold or transferred in some other way. Notify the borrower… read more →