Owners of Chicago real estate (and homeowners nationwide) who are struggling with making their mortgage payments received a holiday gift this year from Fannie Mae and Freddie Mac, along with other lending giants. The lenders pledged not to foreclose on delinquent buyers during the holiday season.

According to a December article in CNN Money, condo and homeowners who have loans with Fannie Mae and Freddie Mac could rest easy that they would not be evicted between December 19th, 2011 and January 2nd, 2012. The good will measure does not end legal and administrative proceedings for evictions, only allowed families to stay in their homes for the full extent of the holidays. Executive VP for Fannie Mae Terry Edwards explained, “No family should have to give up their home during this holiday season.”

Additionally, Chase pledged not to evict any of its struggling borrowers from December 22nd, 2011 through January 2nd, 2012. Wells Fargo also postponed evictions during this time. However, the bank said evictions would not be dissolved completely where foreclosure-related actions may need to be taken for loans it services through separate lenders. In a similar vein, Bank of America stated they would “avoid foreclosure sales and displacement of homeowners or tenants around the Thanksgiving and Christmas holidays” on loans they own, according to the CNN story. Still, like Wells Fargo, the organization said it would proceed with certain foreclosures on loans it services if the loan owners were so inclined.

A monthly average of 89,000 foreclosure auctions were scheduled in 2011, according to information from RealtyTrac as reported by CNN Money. Eviction is the next course of action after foreclosure auctions. This holiday suspension of foreclosures is said to have aided tens of thousands of people who own homes, condos and other residential properties throughout the country. It is expected that, in at least a few of these cases, the extra time gave delinquent homeowners the extension they needed to come up with the back money owed on their mortgage, allowing them to keep their home in 2012.

Recently, legislation was passed that allows for a two-month extension of a payroll tax cut and long-term unemployment benefits that were set to expire January 1st, 2012. Those buying or refinancing homes this year will be the ones paying for the payroll tax cut. Someone who buys a $200,000 home or refinances that amount after January 1st, 2012 will now have to pay an approximated additional $17 a month on their mortgage.

The payroll tax cut is currently working its way through congress—the bill was passed in Senate mid-December, 2011 and the House was supposed to act on the bill during the last few days of December. The increases in fees are proposed to gradually phase in.

Due to the state of the housing market and large amount of foreclosures in recent years, private insurers have contended with Fannie Mae and Freddie Mac, who are backed by the federal government. As it stands, Fannie Mae, Freddie Mac and the Federal Housing Authority (FHA) subsidize roughly 9 out of 10 new mortgages. In order to handle the $33 billion dollars the government owes, the payroll tax cut in turn raised the fee for government-subsidized mortgages through Fannie Mae and Freddie Mac in order to insure these mortgages.

The rise in fees also applies to anyone with a mortgage subsidized by the FHA, which includes many first-time and low-income homebuyers. President Obama’s administration felt raising the mortgage guaranty fees Fannie Mae currently charges could restrict Freddie Mac’s domination in the mortgage market.

Early payoff is something many owners of Chicago homes wish for, however it may come at a price. When you go to close on your Chicago condo purchase, make sure to read the fine print closely because some real estate purchasers will find there is a penalty fee for paying off that mortgage before the scheduled term is up.
According to a December article in the Chicago Tribune, buyers can save themselves from receiving such a big penalty by reading their loan information carefully or getting creative… One Chicago Tribune reader that had an opportunity to pay off his loan in full got around being docked a big penalty by giving the lender a check for the full amount of the mortgage minus $5. What good does that do, you ask? The mortgage penalty fee was determined by a percentage of the payoff amount. Therefore, if the buyer only has $5 left to pay off, the fee is greatly reduced (even a 100% penalty would only be five bucks).

Prepayment penalty is not uncommon but does not exist on all loans. Still, not all purchasers of Chicago homes realize it could be a contingency of their mortgage. Especially new buyers, who are coming onto the market in increasing numbers.

Loan fees and penalties are included in the promissory note and buyers of Chicago condos can find out if they have the penalty by reading the information there. Also, if there are any legal issues with making partial payments and then lowering the penalty as noted above, it will be listed here as well.

For all issues regarding Chicago properties, including probate matters, real estate attorneys can be extremely important to consult. Illinois-specific real estate laws and customs exist and knowing what they are is helpful to having a smooth transaction and payment plan. For example, an heir can sell his/her parent’s house with an affidavit of heirship. Illinois title companies demand a bond in lieu of probate of 2% of the sales price. This is only if the home is sold within one year of the owner’s death or 1% if the home is sold after 1-2 years of the owner’s death. If the house is sold any other time after two years, the affidavit of heirship is the only thing needed and there is no longer a bond. The Illinois Real Estate Lawyers Association (www.irela.org) has a lawyer locater tool for clients wishing to contact a lawyer in the state to help with all issues regarding Chicago real estate.

September 14, 2011 – If you are one of the many Chicago homeowners having a hard time making your mortgage payments, you may be eligible for a new federaly funded mortgage assistance program. If you qualify, you could get a loan for as much as $25,000 to help make your payments and may not have to repay the government. According to a report in the Tribune, the new program aimed at helping financially distressed Chicago real estate owners will be announced today.

There are 18 states plus Washington D.C. that received funds for this mortgage assistance program. They were selected by having the highest unemployment rates and having over a 20% drop in home values. Bank of America, JP Morgan Chase and Wells Fargo have all agreed to the program.

Owners of Chicago condos and single-family homes who haven’t qualified for any other Chicago mortgage assistance may be able to tap into the $345 million available in this “Hardest Hit” program. Homeowners have to have had their yearly income reduced by a minimum of 25%, their income must be equal to or below 120% of the local median income, have a fixed or adjustable rate loan and the balance on that loan can’t be over $500,000.

If you have already been hit with a foreclosure and the process is nearly over, you may be turned down. Also, second mortgages are not eligible.

According to the article, if you meet all of the qualifications for the Hardest Hit program then you won’t have to repay the loan amount that you are granted. Otherwise payments are structured over a 10 year period.

You have to make monthly payments just like any other loan. The fund requires that those payments be 31% of your gross income, including unemployment benefits. The fund will pay the entire monthly mortgage payment for as long as 18 months or up to $25,000, whichever comes first. If you run out of unemployment benefits and have no other income, the fund will make the whole monthly payments for you. But if you do have an income and miss two payments you will be bumped from the program.

If you sell your home at a profit within the first 5 years of being in the program you have to repay the loan. If you sell in the second five years of the program, then part of the loan will be forgiven, according to the article.

As you can see, there are a lot of “ifs” in this program. To date, about 5,200 homeowners have applied for assistance. Of those, 74% have gotten past the first qualifications. The article states that 915 applicants have gotten to underwriting, and of those there have been 95 turned down, 24 approved and 150 still being negotiated. So far $605,000 has been granted.

The only place to apply is at IllinoisHardestHit.org, so if you aren’t already affected by Chicago foreclosures but are struggling to make your mortgage payments you may want to see if you qualify.

[tags]Chicago Mortgage Assistance, Chicago Foreclosures, Chicago Real Estate[/tags]

July 21, 2011 – If you’re one of the many homeowners affected by Chicago foreclosures and your lender was Countrywide, you may have a refund coming your way. A recent announcement by the Federal Trade Comission stated that Countrywide Home Loans is accused of overcharging at least 450,000 homeowners who were facing foreclosure or who had defaulted on their loans.

At first the estimate was about 200,000 homeowners who were due a refund. Bank of America took over Countrywide in mid 2008 and B of A agreed to pay around $108 million in a settlement with the FTC. That money will be used to pay all of the refunds.

Countrywide allegedly charged homeowners too much for property inspections and title reports as well as other fees related to defaults on loans. The FTC report also stated that Countrywide even inflated the amount still owed on mortgages before homeowners went into bankruptcy. The FTC statement says the refund checks being sent out range from $500 to $7,000.

These refund checks won’t have any big impact on Chicago real estate as a whole, but it does remind homeowners to be very aware of all fees charged to their mortgages and exactly how much is really owed on your loan.

[tags]Countrywide Home Loans, Chicago Foreclosures, Chicago Real Estate[/tags]

July 12, 2011 – A lot of investors might call the Chicago real estate market a gamble right now, but even more betting could come to Chicago if Governor Quinn signs the the new bill that was recently passed by the Illinois House and Senate. If passed, the bill would allow for five new casinos and expanded racetrack gambling in Illinois. And one site being considered for the proposed new Chicago casino is Trump Tower. The other site being considered is McCormick Place.

We won’t know if Gov. Quinn gives a green light to the bill until sometime in October when it’s expected to reach his desk, according to the Tribune. But if he does sign and not veto, Trump Tower could reel in a huge attraction that could potentially boost hotel occupancy quite a bit.

If you aren’t in the market to buy one of the Chicago condos at Trump Tower you can still have the Trump experience by renting one of the hotel suits. There are some specials being offered for the summer and those are listed below.

Multi-Night Stay Special Offer
Guests get 20% on a two night stay and 30% off rates for a three or more night stay.

City Breaks
This package will get you a continental breakfast for two and a nightly hotel credit of $15.

Kids in the City
This one night stay package deal includes a stay in one of the Delux King View Suites, a $15 hotel credit, milk and cookies at night, continental breakfast for two, a Trump Kids welcome gift when you check in, donation to the Godnight Foundation in your name and your choice of Playstation, Xbox, Wii or other game in your room.

Pets Welcome
With this package you get to bring your pet with you. You also get a $15 hotel credit, gift for your pet, daily continental breakfast for two and a donation to the Goodnight Foundation in your pet’s name.

And if after your hotel stay you decide you’d like to buy a condo at Trump, you can find more information about those units and other luxury Chicago condos by following the link.

[tags]Trump Tower, Luxury Chicago Condos, Chicago Real Estate[/tags]

June 14, 2011 – Yesterday we told you that there are only 9 developer units left for sale at Library Tower. Those Chicago condos are two and three bedroom, two bath units with from 1,530 to 1,805 square feet of living space. Prices start at $442,990 and the tower is FHA approved so a 3.5% down payment could be possible for qualified buyers.

Now Chicago real estate developer Lennar Homes is having a promotion that doesn’t really have anything to do with buying one of their condos. You can enter their Summer Staycation Sweepstakes from now through July 8th. The winner will get $5,000 to endulge in whatever your idea of summer fun is. The sweepstakes ad states that you just have to be 18 years old, a U.S. resident and have a valid email address prior to June 6, 2011. All entries have to be received before midnight on July 8th and a winner will be randomly drawn on July 11th.

Some of the “staycation” items Lennar suggests you could buy with that $5,000 prize are an outdoor kitchen, tiki hut and patio speakers. That would work if you own a townhome or single-family home. But if you live in one of these Downtown Chicago condos you probably already have a rooftop sun deck and amenity floor where you can staycation if you want.

[tags]Library Tower, Chicago Condos, Chicago Real Estate[/tags]

July 15, 2010 – Even architects aren’t immune to the effects of the slow Chicago real estate market. Well-known Lucien Lagrange has decided to retire and has filed for Chapter 11 bankruptcy protection for his firm, according to a recent Crain’s report. The main reason for the bankruptcy filing being coupled with his retirement was to keep from being personally overwhelmed with debt that his company has accumulated, the article states.

Mr. Lagrange has designed many of the Chicago condo towers that have been constructed over the past twenty years. But he said in the article that he was doubtful that any new major Chicago condo developments would begin again for at least another five years. At age 69 he also debated whether or not he would be up for a major project that far in the future. “I could maybe survive the economy downturn, but what’s the point?” he was quoted as saying.

Bankruptcy paperwork filed states that his design firm has assets between $1 and $10 million with liabilities adding up to about the same total. He told Crain’s that, “Retiring, there would be a lot of liabilities are on my back. I can’t just walk away. Chapter 11 gives you a chance to plan ahead, organize and close in a decent way.”

Some of the best-known high-rise projects that Mr. Lagrange designed include the Park Tower, 840 North Lake Shore Drive, Ritz-Carlton Residences, Lincoln Park 2520, Ten East Delaware and the scrapped X/O Condominiums.

If you’re a fan of Mr. Lagrange’s work, you can find more information about the Chicago condos he has designed as well as other Downtown Chicago Condos in our development pages.

[tags]Ritz-Carlton Residences, Downtown Chicago Condos, Chicago Real Estate[/tags]

June 18, 2010 – For those of you who purchased Chicago condos in time to qualify for the $8,000 First-Time Homebuyer Tax Credit but need a little more time to close, you may be in luck. The original deadlines for the tax credit were to have a sales contract signed by April 30th and close by June 30th. But the Senate has approved a three month extension for closings. The new deadline is now September 30th.

This extension was proposed by Senate Majority Leader Harry Reid and was approved by a vote of 60-37 last week. The extension is only valid for buyers who did get a contract signed by the original April 30th deadline.

According to data released by the Federal Housing Administration, around 180,000 buyers would most likely miss the June 30th closing deadline due to difficulty in securing home financing for their purchase.

This extension should help many who purchased Chicago real estate for the first time and are finding that locking in a mortgage can be difficult to do under a deadline.

[tags]First-Time Homebuyer Tax Credit, Chicago Condos, Chicago Real Estate[/tags]

May 18, 2010 – If you didn’t get a chance to see the elaborate NBC Tower 18th floor sales office and full model for the Chicago Spire, you probably never will now. Spire developer Garrett Kelleher and his Shelbourne Development Group were served an eviction notice last year in August after supposedly not paying rent from April 2009 forward on the sales center. According to a Crain’s report, that eviction suit was settled and Shelbourne has closed the office and will handle sales from Shelbourne’s office on Wacker Drive in Chicago. Although the landlord claimed that $316,000 in back rent was owed, a judgement for $55,000 was ordered but voided with Shelbourne leaving the space, according to the article.

Any potential buyers will now only get to view three-dimensional computer models instead of the real thing, according to a Tribune article. The old sales center cost $10 million to build, $350,000 of which the NBC Tower landlords contributed. The full-floor sales center model was designed by architect Santiago Calatrava, who also designed the Spire.

Developer Garrett Kelleher insists that this Chicago real estate project isn’t closed and a spokeswoman for Shelbourne told the Tribune that, “He’s being smart. If you’re in a situation where things are slowing down, you need to consolidate and you need to be smart. Clearly the economy has been tough and he’s had to focus on areas of his portfolio that are doing well.”

The Chicago Spire may never make it out of the hole it’s in, both literally and figuratively, but there are many other luxury Chicago condos already built and showing price reductions if you’re in the market to buy.

[tags]Chicago Spire, Chicago Condos, Chicago Real Estate[/tags]