When you apply for a short sale, you have to submit a LOT of paperwork. It’s a time-consuming process. And if you fail to respond to the bank quickly, well, they just close out your file and you get the privilege of applying all over again. It’s not a fun road, but it’s traveled all too often these days. If they’re going to put you through all that, make sure at the end you get what you deserve! There are a number of incentives out there to encourage short sales. For example: 1. If you are a seller who qualifies for a short sale under the Home Affordable Foreclosure Alternatives program (HAFA), you could receive up to $3,000 in relocation costs. 2. Larger banks are offering their own incentives to sellers. Bank of America, Chase and Citibank often offer some relocation assistance as well, even if the loan does not qualify… read more →
Short sale rules are changing all the time. Here are some new tidbits that may be of interest to you: 1) Effective June 2012, lenders must provide a response within 30 days of receiving a short sale offer if the loan is backed by Freddie Mac or Fannie Mae, or is subject to the Home Affordable Foreclosure Alternatives Act (HAFA). Also, those lenders must make a final decision within 60 days. 2) HAFA is no longer limited to owner-occupied homes. Certain investment properties may qualify under HAFA as well. 3) Homeowners who are in the military, and need to move quickly as a result of receiving new orders, can qualify for short sale assistance automatically if their loans are backed by Fannie Mae or Freddie Mac, and if they owe more than their home is worth.
Can you buy another home if you have gone through the foreclosure or short sale process? Well, it’s not going to be easy, especially if you need financing. But the Federal Housing Administration has some programs that could help you out. You could qualify for an FHA loan if you meet various criteria. For example: 1) It has been at least three years since you have owned any real estate that was foreclosed (including regular foreclosures and deed-in-lieu transactions). 2) You did a short sale, but you were current in your mortgage payments for the 12 months leading up to your short sale. 3) You did a short sale, and you were current on all installment payments (i.e. credit cards, etc.) for the 12 months leading up to your short sale. On the other hand, you would be ineligible for an FHA loan if you fall in one of the following categories:… read more →
Usually, when I represent someone purchasing commercial property, an apartment building, or a single-family home, I don’t have to worry about ordering a survey. That’s the seller’s job. But with more and more of my clients purchasing real estate that has been foreclosed directly from the bank, I find myself advising my clients to obtain surveys before closing. Why? Many bank-owners of foreclosed property don’t provide surveys as part of their agreement with the buyer. As a result, something that the buyer did not anticipate having to pay for becomes an additional expense. Surveys range in price from a few hundred dollars for residential property to thousands of dollars for large parcels of commercial property. But really, you should get that survey. Why? Here are a few reasons: 1) You may not be able to purchase the property without a survey even if you are willing to. Many lenders require… read more →
It’s become harder and harder to find a condo that is eligible for FHA financing. Just when everything seems okay, the buyer finds out the association doesn’t have enough reserves. Or perhaps, the association has too many commercial units, like a shopping center on the first floor. Or maybe, too may homeowners in the association have been hit hard and are no longer making assessment payments. When these things happen, the unit becomes ineligible for FHA financing, sometimes dashing the buyer’s — and the seller’s — dreams of a purchase or sale. The good news is, the FHA finally revised its rules for condominium financing, making it a little bit easier to get approved for an FHA loan. For example: 1) If you are buying a residential unit in a condominium building where up to 50% of the space is allocated for commercial use, you can still qualify. Previously, the… read more →
There is one specific home I remember driving by often on my way home a few years ago. It was clearly foreclosed — the lights were never on, the yard was a shambles. Occasionally there was a sign on the door. But despite that, it looked like a beautiful house in a nice neighborhood, and I kept wondering when it would come on the market. Well, lo and behold, it eventually did come on the market. It must have been at least six months later, if not more. Apparently, there is a new tool out there that can give you more information about when a foreclosed home might make it to market, along with other details — address, the amount of the original mortgage and how much is still owed, an estimated price, and even details of how far along the property is in the foreclosure process (to help you… read more →
A recent case, Deutche Bank National Trust v. Gilbert, 2012 IL App (2d) 120164 (September 25, 2012), highlights how important it is for a bank to have standing — in this case, the bank must actually own the loan — when filing a foreclosure suit.In 2005, the defendant homeowner entered into a mortgage with Mortgage Electronic Registration Systems (MERS). At some point, he defaulted. In March 2008 the plaintiff, Deutsche Bank, filed a foreclosure action against the defendant. In August 2008, MERS assigned the mortgage to Deutsche Bank. The next month, Deutsche Bank amended its complaint and attached the assignment from MERS.The defendant claimed that Deutsche Bank did not have standing because it did not own the mortgage when the foreclosure was filed. While the trial judge initally agreed with the defendant, upon motion for reconsideration, he sided with Deutsche Bank.The home was foreclosed, and the defendant appealed. The appellate court found… read more →
The funds from February’s $25 billion national settlement are being distributed as we speak. Back in August, $4.7 million were given towards assistance for distressed homeowners and tenants in Cook County. A few weeks back, $4.5 million were earmarked for foreclosure assistance in Winnebago County, and northern and central Illinois generallly. Shortly thereafter, $1.4 million was awarded to provide legal assistance to renters in the Chicago area. The attorney general plans on distributing $20 million towards legal aid. As more funds become available, the organizations receiving them are hiring attorneys to assist distressed homeowners and tenants. If you are facing foreclosure, help may be just around the corner!
A recent case, Seth v. Aqua at Lakeshore East, 2012 IL App (1st) 120438 (September 26, 2012), provides insight on how courts interpret the portion of Section 22 of the Illinois Condominium Property Act (the “Condo Act”) requiring that developers present a copy of the condominium declaration to buyers purchasing new condominiums. In 2006 and 2007, the plaintiffs in Seth signed contracts to purchase units in a new development, Aqua at Lakeshore East. The condominiums were scheduled to be delivered in December of 2010. When they signed their contracts, plaintiffs received a Property Report with the proposed condominium declaration as an exhibit. The Property Report stated that the developer had a right to modify the condominum documents in certain respects. In September of 2009, the developer recorded the condominum declaration. It was not identical to the condominum declaration that had been previously presented to the plaintiffs. There were seven additional units, and the units had different percentage… read more →
We just found out recently that Illinois has the highest foreclosure rate in the country. Well, now homebuyers may have to pay the price for that. Fannie Mae and Freddie Mac want to increase the fees charged for the mortgages they acquire in Illinois and four other states. In all five states where Fannie Mae and Freddie Mac are trying to increase fees, foreclosures take an inordinately long time. In Illinois, for example, the average foreclosure takes well over 500 days. Fannie Mae and Freddie Mac feel that they need to recoup the increased costs they suffer as a result of this lengthy foreclosure process in Illinois, Connecticut, Florida, New Jersey and New York. Fannie Mae and Freddie Mac are increasing some of their fees nationwide effective December 1, 2012. The fees for Illinois and the four other states with long foreclosure processing times, however, are in addition to the… read more →