Archive for August, 2010

Vacant Buildings Affect Chicago Real Estate Values

August 26, 2010

Vacant buildings don’t make for good neighbors. Vacancies bring down Chicago real estate property values, put a damper on morale and squashes any pride of ownership that once existed, and attract a criminal element which in turn brings down property values, etc, etc.

These are some of the reasons Alderman Pat Dowell, 3rd, introduced a measure to the Chicago City Council last month that would toughen the city’s existing vacant property ordinance. If passed, the updated ordinance largely would pass the responsibility for securing and maintaining vacant buildings onto lenders, regardless of whether they have actually reclaimed legal possession of a building.

“There are people walking away from their homes,” said David McDowell, of the Southwest Organizing Project, a Chicago community group involved in discussions about the proposal. “We find homes that are vacant and the foreclosure process hasn’t been completed. There’s no one to take responsibility for the home to be boarded up or the grass cut. This is a way of making sure even if a homeowner leaves, someone is taking care of the property.”

The ordinance would reward Chicago residents willing to document violations for the city. To receive a finder’s fee equivalent to 5 percent of the total amount of fees and fines assessed at a building, a person must file an official complaint through the city’s 311 call service or its Web site. Individuals would need to provide their name, address, Social Security number, a photograph showing any violation of the building code, the name and address of the property owner, and information on whether the property is registered with the city.

The person also must be willing, if asked by the city, to attend any administrative hearings related to the building and the code violation.

We applaud the Chicago City Council for protecting our neighborhoods and our property values.

Stay tuned for updates on the proposed ordinance in the coming weeks.

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Be Informed When Investing In Chicago Real Estate

August 20, 2010

Investing in Chicago real estate can be quite profitable and safe. Such a transaction can also be challenging, especially for first-time investors, and requires prior planning, a time commitment, realistic goals, and careful consideration of the following factors.

1. Selecting a property. First decide on a location and the type of property you are interested in. You might also consider proximity to good schools, public services, shopping centers, highways, etc.

Another decision will deal with the type of property you want to own–a single family residence, a multi-family unit, or a vacation rental home. Discuss with you realtor and tax advisor the pros and cons of each to decide which will be most advantageous for you.

2. Examining your finances. In addition to a monthly mortgage payment, investment property expenses can also include taxes, property management fees, utilities, insurance for fire and floods, repair and maintenance costs, condo fees, and periods of vacancy. Be prepared to have cash on hand for a 20% to 30% down payment (or investigate other options). A helpful tool to assist you in calculating costs and probable financial outcomes is www.goodmortgage.com.

Also keep in mind that long term (5 to 10 years) ownership is usually best for the average investment. The shorter the length of time you hold the property, the greater the risk.

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Avoiding Foreclosure Of Your Chicago Home

August 17, 2010

In our present economic situation, many people are currently facing the loss of their homes. However, because foreclosure is expensive for lenders, mortgage insurers, and investors, the FHA, HUD, Freddie Mac, Fannie Mae, and private companies are being required to work with borrowers who are experiencing money problems. As a result, lenders do have workout options to help you keep your Chicago home. Warning: Do not mistakenly assume that your mortgage situation will correct itself; you must take the steps suggested below to avoid, or at least forestall, foreclosure.

foreclosure1. ACT NOW! Time is of the essence. Do not ignore letters or calls from your lender. If you do, chances are that action to foreclose will begin quickly.

2. CONTACT YOUR LENDER:  When you reach the lender, you should be prepared to provide him/her with your account number; a brief explanation of your circumstances; income documents or evidence of unemployment, public assistance, or business losses; and a list of your household expenses. Ask about a reduced interest rate, refinancing, lengthening the term of the loan, and a repayment plan for missed payments. In all probability, the lender will mail you a loan workout package. It is important that you complete and return these forms quickly.

3. DO RESEARCH; Reread your loan documents to determine what is said about unpaid mortgage payments. Learn about specific foreclosure laws in your state Get in touch with the government housing office where you live.

4. CONSIDER SELLING: Lenders will most likely suspend foreclosure proceedings while your Chicago home is on the market and possibly even eliminate mortgage payments during this time. Explore a short saleIf the market value of your house is less than you owe, your lender may consider taking the sale proceeds and forgiving the rest of the debt. Or you might give your deed to the lender in return for the loan balance being cancelled. Check with an attorney or housing counselor before taking these actions.

5. BEWARE OF SCAMS! Avoid “foreclosure prevention” companies who offer to negotiate with your lender, will cost you thousands of dollars, and may even “rescue” your home away from you. Do not sign anything from these firms!

6. SET PRIORITIES: Pay the mortgage on your Chicago home before paying credit card debts, doctor bills, or the like. Can you sell a second car or other assets? Could you take a second job to ease the situation? Your lender needs to know that you are serious about trying to find a solution to your financial problems and are willing to make sacrifices to do so.

7. EXPLORE ALL OPTIONS:

        a. Get legitimate help. Contact a HUD approved housing counselor (1-800-569-3287) or 1-888-995-HOPE) for free or low-cost guidance. Help is also available from the National Foundation of Credit Counselors (1-866-557-2227). Also, check with your local bar association or a neighborhood legal services program for pro bono legal representation.

        b. Look into government benefits such as fuel assistance, food stamps, or property tax abatements to help you through this difficult period.

It is important that you be both aware and proactive in your fight to keep your Chicago home!

I am a Certified Distressed Property Expert (CDPE). I have the training, knowledge and experience needed to help save your Chicago home from foreclosure. The clock is ticking. Don’t hesitate. Give me a call for a private consultation.

Chicago Foreclosure Trends – June 2010

August 10, 2010

There were 39,665 Chicago foreclosure homes for sale with 4,231 new foreclosures in June 2010. The average selling price of a Chicago home was $284,153 in June and the average foreclosure selling price was $124,973, a savings of $159,179 according to RealtyTrac.com.

Chicago Foreclosure Geographical Comparison

Chicago foreclosure activity in June was lower 0.11% higher than national statistics, 0.07% higher than Illinois statistics, and 0.05% lower than Cook County numbers.

Chicago Foreclosure Activity by Month

The number of Bank-Owned Chicago homes decreased from 1,106 homes in May to 895 in June. The number of Auctioned Chicago homes also decreased from 907 to 1,098 and Pre-foreclosure acitivity rose from 1,805 to 2,238. The six month Chicago foreclosure trend is falling.

Are you or someone you know behind on your mortgage payments and facing a Chicago foreclosure? You do have options. A foreclosure is not the only way. A short sale may be the answer to saving you, your family and your home. I am a Certified Distressed Property Expert (CDPE). I have the training, knowledge and experience needed to help save your Chicago home from foreclosure. The clock is ticking. Don’t hesitate. Give me a call for a private consultation.

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Credit Score Fact and Fiction

August 3, 2010

The most important piece of a person’s financial life is their credit score. Whether buying a new home, applying for a job, refinancing your home, paying off debt, or getting utility service, your credit score will drive the outcome. One would think that Americans are all aware of what the scores are measuring and what factors play a part. But, most Americans do not know enough about the three digit rating or what is involved. Do not let these credit score myths get in your way when preparing for the purchase of your next Chicago home.

chicago home, credit scoreMyth: Checking a credit report can either damage or lower your score. A credit report can be conducted by you or someone like an employer as many times as desired with out having any impact on your credit score. Reviewing your credit report will never change your credit score. Just make sure that reports are retrieved through the bureaus or a legitimate score seller.

Myth: Age, sex, and income are factors that affect your score. None of this information plays a role in determining your score. A higher income may make it easier to pay off debts, but income and net worth have no impact of credit scores.   

Myth: A credit score can be destroyed by shopping for a loan. When seeking to extend credit, too many inquiries can have a negative impact your credit score. However, when several inquiries are made by the same type of lender with in a 14 day period they only count as one inquiry against your credit.

Myth: Your score can be hurt by credit card offers. When companies offer you their credit cards it does not have any affect on your score. Unless, your take advantage of all the offers and carelessly use all of the credit available. The number of credit cards a person manages does not matter. The important thing is maintain a low ratio of used to available credit.

Myth: Credit scores of married couples are shared. A credit score can only belong to one person, just as one person can only have one score. A married could does not share a credit score, but their scores could have an affect each others. When opening a joint account, the information accumulated from that account’s activity will be reflected on both people’s credit report. If all of the couple’s accounts are joint, then their scores will be somewhat similar.

Myth: Closing unused accounts improves credit scores. Unused accounts most likely contain available credit, which is an important part of a credit score. Closing unused accounts removes available balances from the equation. This causes your ratio of used to available credit to increase, ultimately affecting your credit score.

Myth: Paying off bills is a quick way to boost credit. Over time, a good record of properly paying bills will improve credit. Credit reports reflect your long term history, scores do not change overnight.

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