the wasserblawg

According to Inman this morning, "Fannie Mae and Freddie Mac boosted loan modifications by 76 percent in the last three months of 2008, but nearly doubled their inventories of real estate-owned properties over the course of the yea r as the companies eschewed short sales and seized properties faster than they could sell them." Here is another new report that helps quantify how many properties are being held "bank-owned" following foreclosure. Among the findings: The companies were saddled with real estate-owned (REO) inventory of 92,884 homes at year end, 2008 -- nearly twice the 48,123 properties on hand at the end of 2007. During the last three months of 2008, loan modifications were approved for 23,777 loans owned or guaranteed by Fannie and Freddie, a 76 percent increase from the previous three months. But over the course of the year, the mortgage giants repossessed about eight homes for every short sale they conducted. Fannie and Fre...

According to today's Wall Street Journal (subscription required) Fannie Mae has tightened credit for buyers of condominiums. The new rules are going to hit new construction condo buildings especially hard. Effective as of March 1: Has stopped guaranteeing mortgages in condo buildings where fewer than 70% of the units have sold (previously it was guaranteeing the loans as long as at least 51% had sold) Won’t back loans for sales in buildings where 15% of current owners are deliniquent on HOA fees Won’t back loans where more than 10% of units in the building are owned by a single entity Freddie Mac has apparently not tightened its lending standards- yet. Both Freddie and Fannie, however, are going to increase fees. Starting in April, buyers without at least a 25% down payment will have to pay closing-cost fees equal to 0.75% of their loan even if the buyer has an outstanding credit score.

An important note for anyone you know who purchased a new home in 2007 or 2008. The Cook County Assessor mailed out 2008 Taxpayer Exemption Applications last week. Exemptions reduce a property's "equalized value", which in turn lowers the overall property tax bill. More details about the various exemptions can be found on my web site , and on the County Assessor's site . Forms were mailed to anyone who purchased a home in 2007 or 2008, or who did not claim exemptions for 2007. Applications can also be down-loaded here . Please contact me if you have any questions about claiming these tax exemptions or filing "certificates of error" to correct mistakes on older tax bills.

The speculative opportunities for condo investors abound. Many come in the guise of REO purchases; buying properties that have already been foreclosed upon. I have written of several over the last weeks. Such opportunities are not without their risks. Now more than ever, anyone even remotely considering buying a condominium ought to speak to a lawyer well before the ink dries on the offer sheet. One such problem relates the the treatment of those monthly association assessments. Who pays the bill when a unit goes delinquent, then is lost to foreclosure? Conventional wisdom might have it that the seller / bank must pay off the balance before closing. At least that is what you might think if your expectations are based on what happens in "conventional" condo sales. NOT SO, for foreclosures. The bank only has to pay for the association bills for the time that they actually own the unit. Current Illinois Law allows, in some but not all cases, for an association to demand payment...

Some people buy condominiums to live in. Others buy condominiums and then offer the units as rental properties to others. Still others rent out condominiums when they want to sell but cannot find a buyer and they need the income to cover their expenses. It turns out however, that many condo owners do not want to allow rentals in their buildings. In those instances, efforts are undertaken to impose rental restrictions of the association, by means of amending the governing rules; the Condominium Declaration and/or By-Laws. Naturally, this can be a terrible problem when the rules change after a rental situation has been created. Enter West Suburban State Rep.s Sandra M. Pihos & Karen A. Yarbrough who have introduced legislation to address this issue. House Bill 821 proposes to amend the Illinois Condominium Property Act by offering "grandfather" protection to such landlords. If a condo owner's association changes the riles, he or she would be allowed to continue t...

We were reminded this weekend that the housing market turmoil is taking its toll on us; the (former) home-owners; their pets; and ALL THE REST OF US WHO OWN or WISH TO OWN HOMES. The Tribune devoted extensive coverage to the phenomenon of " ghost towns " in Englewood , Garfield Rogers & Washington Parks. Foreclosures force families out of their homes. But those homes remain leaving neighborhoods without neighbors. I first wrote about this problem back in January, 2008. Two more Sunday Trib articles here , and here . The Indianapolis Star reports on increasingly dogs & cats are being abandoned as owners lose the ability to care for their pets. But the foreclosures are effecting ALL of us, even if we do not live in those worst hit areas. A new study by Deutsche Bank confirms something I wrote about three weeks ago : there is a large (and growing) inventory of bank-owned (foreclosed) properties. As banks release those properties back into the marketplace, the resu...

I have posted before about various mortgage frauds . Others have reported about problems with bogus deeds . Here is a new one (to me, anyway) that might keep a realtor or two awake at night. This comes from Kelly Willey , a realtor in Abingdon, Maryland on Active Rain : A crazy internet "Nigerian" hijacks a realtor's listing, assumes her name on craig's list and offers the home for rent below market to lure "tenants." C.I.N. tells the "tenant" to send him a check and he'll mail the keys. Yikes! I had not heard of this type of rental scam before, stealing an agents name and listing. Judging by the feedback to Kelly's post, this is an emerging problem in a number of communities. Only a matter of time before we start seeing it here. I suppose that it is inevitable that scamming and thievery increase when times are tough. Kelly found out about the scam when "tenants" started calling her So what can be done to guard against frauds