the wasserblawg

I have been thinking - and reading - a lot lately about the price disparities between REO transactions and "conventional" closings. To recap, even with overall declining market prices, sellers (and the professionals they hire to help them sell) need to recognize the gap in prices between sales of bank-owned properties and sales for everyone else. Here are two more indicators of where we are and how far we may still need to travel. First, the monthly bad news report from Standard & Poors ; the monthly Case-Schiller index. You will see this one in all the newspapers, and broadcast news reports. No doubt scores of bloggers will talk this one too death too. Prices were down from a year ago January in all 20 metro areas tracked by the S&P/Case- Shiller Home Price Indices, with 13 of those markets seeing the steepest rates of decline since the downturn began. The three worst-performing markets in terms of annual declines were Phoenix (down 35 percent), Las Vegas (down

Three interesting reports from three different sources this week might be of particular interest to local real estate agents. Here is a quick recap of the data, followed by my impressions. FIRST, The Illinois Association of Realtors February market statistics show that, in the city of Chicago, sales fell 40.4% in February, to 841 compared with 1,412 in February 2008, and median price in Chicago also sank to $218,250 from $290,000 in February 2008. The overall sales trends for the larger, nine county region are shown graphically in the second chart on this page posted by Lucid Realty . THEN, the National Association of Realtors , released data yesterday, as summarized in Kelly Evans and Justin Linhart's story in today's Wall Street Journal, that aggregate resales of single-family homes and condominiums climbed 5.1% in February versus January, to an annualized 4.72 Million Units. Roughly 45% of these sales were foreclosures and short sales - distressed properties s

The first day of spring offers new opportunities for well qualified, upper bracket buyers: Bank of America has announced that it is re-entering the Jumbo Loan markets. As reported in the Daily Herald , they will be offering loans of $730,000 to $1,500,000 on 30 year amortizations and interest rates below 6.00%. Borrowers will have to make 20% down payments, have proofs of income, hold cash reserves of six months of monthly payments (principal, interest, taxes and insurance) and have golden credit ratings. Jumbo loans are too big to be insured by Fannie Mae or Freddie Mac. They are typically only funded if private mortgage insurance is available. Those PMI companies took a pounding when loan default rates exploded. Consequently, they started charging prohibitive premiums to meet the increasing risks associated with such large loans. For a while there it was nearly impossible to fund Jumbos for a while. But it stands to reason that there are great rewards out there for lenders who will

The U.S. Treasury and HUD have teamed up to launch a new website for consumers seeking information about the Obama Administration's Making Home Affordable loan modification and refinancing program. The site features interactive self-assessment tools that can help you determine if you are eligible to participate in the program and to calculate the monthly mortgage payment reductions you might realize under the program. Making Home Affordable is projected to help 7 to 9 million homeowners making good-faith efforts to make their mortgage payments.

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