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Showing posts from June, 2009

Another Dispatch from the Department of "...huh"?

If these stories were not true, they would likely be pretty amusing. This one is true. Not at all funny.

My client wants to sell his home. The Buyer's loan is approved. The Seller has moved out. Just need one last piece of paper: a payoff statement from the mortgage holder so that we can repay the loan and so the bank will release its lien against the property. (Yes, my client and I are dealing with one of the national lenders). Most often, asking for a payoff letter a simple enough proposition. Call the bank's super-computer; key in some identification information and a fax number; voila: a computer generated payoff statement arrives in my fax in-box. Not so here.

The property is in foreclosure. Things go a bit differently. Gotta go through the foreclosure attorneys (which we have). Gotta send in a written request (which we have). Gotta have the borrowers written authorization (we have). The process takes a bit longer. Started two weeks ago for goodness sake.

Understand, we can…

RELIABLE

Every Chicago are real estate closing I participate in has some sort of allocation of property taxes between the buyer and seller; the tax pro-ration. Calculating the pro-rations amount is based, in part, on the day of the year on which the closing takes place. So, as a lawyer who helps clients buy and sell their homes, I refer frequently to the "day of year" counter on my title-company issued desk blotter monthly calender. Which is why I am so very aware of the fast approaching chronological mid-point of the year.

So, how are we doing in residential real estate?

The Illinois Association of Realtor's monthly activity report came out again this week. Analysts who sifted through the data were able to find a few shiny nuggets of good news, but things still are not quite trending the way we might hope they would be. 422 fewer condos sold in Chicago, (1,053 fewer total residences sold in the metro area) May 2009 compared to May 2008. Drops of 27.5% and 18.7% respectively.

Put th…

CONDO LOAN GUIDELINES ARE CHANGING - AGAIN

Stop me if you have heard this one before.

FHA financing has become more prevalent in the market over the last two years as Fannie Mae and Freddie Mac tightened the reigns on low down payment condo loans. More and more condo deals (at least the ones I am seeing) are being financed by FHA backed loans - they are still guaranteeing loans for up to 97% of a purchase price.

That may change soon in the wake of FHA's Mortgage Letter 09-19, issued earlier this week. Lending guidelines for condominiums are changing. again.

Basically, FHA requires that both the borrower and the property must satisfy lending guidelines. Condo approvals come in three different flavors:
The Condominium is already on HUD's approved list;The developer or association apply for an approval of the entire building/project (to get on that list) - a "blanket" approval; or,The specific unit is approved on an ad hoc basis - a "spot" approval.Spot approvals require certain specified requirements be m…

HB0155 APPROVED - WOULD BAR CONDO RIGHTS OF FIRST REFUSAL

Back in March, I wrote about HB0155.

The bill would effectively prohibit a condominium from exercising a right of first refusal to bar a potential buyer from purchasing a unit because that buyer wants to finance the deal with an FHA loan. That bill, slightly amended, has passed out of the State House & Senate and awaits the Governor's signature or veto (more on that below).

Many Condo Declarations contain a broad rights of first refusal over sale contracts. FHA lending guidelines prohibit them, that is to say, they will not lend to buyers wishing to purchase into associations that restrict sales in this manner. (Don't get me started on the "logic" behind the guideline - I have only seen the right actually exercised once in the last 10 years).

This new law would simply tell Condo Associations - hey, don't even think of exercising that right you aren't going to use anyway.

So if we ban Associations from asserting the right of first refusal, does that mean that…

COWALUNGA 2009

an open invitation to join in on the fun.

COWALUNGA! runs August 1, 2, 3

a three day bike ride (1 and 2 day options available too) from Gurnee Mills Shopping Mall into Wisconsin.

ITS FUN! (really!!) (no, really!!!)

Support the Respiratory Health Association of Metropolitan Chicago!

Promote healthy lungs and fight lung disease through research, advocacy, and education.

details: www.cowalunga.com

NEGOTIATING A BETTER REAL ESTATE CONTRACT - SELLER CONSIDERATIONS part IV

These days, it (still) is really very hard to find Buyers who are willing to submit a written purchase offer.and perhaps a somewhat less obvious truth:
That's just half the battle.Its just as hard (harder?) to get contracts to close. Doubt me on that one? Ask any realtor or real estate lawyer, mortgage broker or loan officer. Ask at the title companies too. They will all likely sigh heavy and confirm it. A great many contract are taken that never close. Even the contracts that can and do close have their problems.

However, with care and caution, savvy Sellers, and the real estate agents & attorneys that represent them, can minimize the risks of delay, and the disappointment of failed closings.

This series explores some steps proactive sellers can take to improve the odds

Tip #4
THE TERMS OF THE MORTGAGE CONTINGENCY SET THE TONE OF THE TRANSACTION - SET REALISTIC EXPECTATIONS

When I review a new real estate contract, one of the very first things I do is look the mortgage contingency …