the wasserblawg

The body of federal law that governs most aspects of residential closings that involve a new mortgage loan is known as the Real Estate Settlement Practices Act (RESPA). Our US Department of Housing and Urban Development, among other things, issues and enforces the regulations that flesh out andimplement the law. HUD announced today that it amending its regulations to require mortgage loan brokers to actually give prospective buyers a standardized Good Faith Estimate of their closing cost. OK, the truth is that they already require GFEs, they are changing the format. What was once a fairly incomprehensible one page form is now a three page colorized incomprehensible form, that will come with a fourth page of "explanations" HUD estimates that the new regulation will save the average consumer $700 at the closing table. Cool right? Here's the catch: The reegulation does not go into effect until Janury 1, 2010!

There are five major title insurance "families" in the United States. Together, they account for roughly 93% of all title insurance here. Last week, two of the five announced a merger . Subject to regulatory and shareholder approvals, Fidelity National Financial and Land America will combine forces, becoming the nation's largest title insurance provider. If so, they will control nearly half of the overall market. This is not really so much of a merger as it is an acquisition: One of Fidelity's subsidiaries, Chicago Title, is going to bail out Land America with a $30 million in stand-by secured credit to provide liquidity and to help Land America's subsidiaries Commonwealth Title and Lawyers Title pay down other debts. Conventional wisdom, and historical indications suggest that the title insurance industry is usually a hugely profitable one. In 2003, according to ALTA, the industry paid out about $662 million in claims, about 4.3% percent of the $15.7 billion t...

The Sterling residences are just up the street, across the river from my office. I wrote about them some time ago and the high rate of foreclosures there, owing in large part to the developer's creative marketing efforts that fed the greed of many condo investor/speculators. Here's a pretty grim example of the train wreck that we are all witnessing. The owners of this unit are having trouble selling it at a 40% discount to what it sold for four years ago! Yikes.

Most Illinois sellers are required to give several different disclosures to prospective home buyers, so that those buyers are made aware of various types of possible (or known) defects. Such property disclosures are required in at least 32 states, some are pretty bare-boned, some are 10 or more pages long. Locally, we have (a) real property disclosures; (b) lead based paint disclosures; (c) radon disclosures; and in the City of Chicago, (d) heating cost disclosures. Our real property disclosure covers 21 specifically enumerated types of material defects ranging from unsafe drinking water, to defects in the roof or ceiling, to boundary and lot line disputes. I just learned of a new one that seems to be an emerging trend in some of our sister states. (Mississippi, Missouri, and South Dakota) now require a seller to disclose whether or not a given property has ever been used as a methamphetamine lab! This disclosure must be made regardless of whether the persons involved in the product...

This just in from the Wasserlaw Department of Unconfirmed Facts and Useless Speculation ( DUFUS ): 2007 Cook County 2 nd Installment Property Tax Bills might possibly be mailed out October 3, 2008. That would make them payable on or before November 3, 2008. This is sourced to a title company closing officer I worked with yesterday and is attributed to a conference call with one of the "higher ups" at the Treasurer's office. The treasurer's web site seems to substantiate the rumor. I anticipate a rash of louder, more shrill complaints from City of Chicago property owners and from "tax reformer" types when those bills hit peoples mail boxes. More than the usual moans and groans we hear this time of year. We are confronted with a confluence of troubling factors: For starters, the property tax system is based in part on triennial re-assessments of property values. Chicago properties were last re-assessed for the 2006 tax year, back when property values w...

As of July, one in every 583 Illinois households was in foreclosure. According to RealtyTrac , there were 8,915 foreclosure pending statewide, 5,378 in Cook County, alone. The July numbers represent a 9% increase over June and is 61% higher than in July, 2007. By now, just about every real estate lawyer in the area has faced a transaction that has involved a bank selling a property already lost to foreclosure, a seller with a pending foreclosure, or a pre-foreclosure "short sale." Sadly, I've seen them all. Most of the time, these properties are (or were) the seller's principal residence. Others however have been investment properties. A couple of those investment deals have been complicated by the fact that a tenant is/was living in the distressed property. There is much uncertainty about tenant rights in a foreclosure action. Most often, the lender does not know that a tenant is living in the building and the tenant does not know that the landlord is losing the bui...

Your House As Seen By: Yourself... Your Buyer... Your Lender... Your Appraiser... Your County Tax Assessor...