FHA helps speed up foreclosure sales!

In an effort to speed up the sale of foreclosure properties, the FHA has lifted the 90 day seasoning rule for 1 year.

Huh? Seasoning? You mean paprika? Garlic? No....parsley, that's a seasoning. Right? Well, no. Whean it comes to real estate, the term "seasoning" refers to how long a buyer keeps a property before they sell it. The longer a buyer holds onto a property - the more seasoned it is. If you buy a "fixer upper" or "foreclosure" property you want to flip - you might run into problems when they buyer tries to get financing. FHA will not allow the new buyer to get mortage insurance if the current owner bought it less than 90 days ago. This makes it difficult for investors with cash to buy foreclosed properties -then turn around and sell them to someone who needs financing.

In an effort to move these properties from owner to owner, FHA has repealed this 90 day rule for 1 year - making it easier to move forelcosed properties. For a full explanation of the rule change, visit the US Department of Housing press release about the 1 year repeal of the 90 day seasoning rule.

MLS Now Tracks Short Sales

As of March 27th of this year, the MRED LLC, formerly the MLS of Northern Illinois, added a tag to allow REALTORS to identify closed transactions as short sales. The small (S) you see next to the sale price denotes it was a short sale. This is important information for REALTORS, Buyers and Sellers.
Recent sales will determine the future listing price of other homes in the area - as well as offers made on currently listed property. Short Sale properties are often sold at deep discounts - so having this data can help balance the value picture when comparing it to other homes.

According to MRED LLC data - 1184 Short Sales of single family attached & detached homes have occured since implementing this new tag on March 27th. While this number is not exact - it can offer a quick snapshot of one aspect of the market. REALTORS must add this tag when closing out a property in the MLS. Properties included would be those that are "Short Sale/Foreclosure/Court-Lender Approval Required,etc.". If the REALTOR doesn't add the short sale tag - the sale is not included in the data.

Here's a look at the numbers by county:

Short Sales/Foreclosures Since 3/27/08* *includes Single family attached &detached sales  as marked (S) voluntarily in the MLS by REALTORS
County	# of Homes Sold	# of Sales Marked Short Sale/Foreclosure	% of Sales
Boone County	66	5	7.57 %
Bureau County	3	0	0%
Cook County	7653	519	6.78%
DeKalb County	133	9	6.76%
DuPage County	1428	106	7.42%
Grundy County	80	4	5%
JoDavies County	0	0	0%
Kane County	735	116	15.78%
Kankakee County	150	17	11.33%
Kendall County	230	23	10%
Lake County	1076	93	8.64%
Lasalle County	137	6	4.37%
Lee County	11	0	0%
Livingston County	8	1	12.5%
Marshall County	0	0	0%
McHenry County	500	69	13.8%
Putnam County	0	0	0%
Stephenson County	6	1	16.66%
Will County	1098	122	11.11%
Winnebago County	202	8	3.96%
Other Counties	168	4	2.38%

New Fannie Mae/Freddie Mac Foreclosures

Two new properties coming up for sale. These are foreclosures being offered by Fannie Mae/Freddie Mac. They are not yet listed but I get notified before they come on the market. Contact me for more details:

Harbor Drive, Oswego Illinos. 4 Bedroom, 4 bathroom. Not yet priced.
Cascade Ridge Drive, Plainfield Illinois 3 Bedroom, 2.5 bathroom. Not yet priced

For a property that is not yet priced, I would help you pull comparable property sales and determine what the value is.

Stop Foreclosure with Program 3648

If you bought your home a year or two ago - you might be in the situation many homeowners are. You owe more than your house is worth. Because of the market slowdown, homeowners are seeing houses in their neighborhood sell for less than they did a couple years ago. This can become a scary prospect when you are forced to sell your home due to relocation, a lost job or death in the family. That's why the president and congress passed House Bill 3648 - the Mortgage Forgiveness Debt Relief Act of 2007. More commonly known as Program 3648.
Prior to program 3648, here is what happened. Lets say you fell behind in your mortgage payments, lost your job or just couldn't keep up with the bills. You decided to sell your house and get out from under the mortgage. You bought the house for $200,000 but could only sell it for $150,000. The bank would then issue a 1099 to you at the end of the year for $50,000. That meant that you would have to report $50,000 on your tax return and pay taxes on it. Can you imagine? What a tax bill.
Thankfully, congress and the president reacted to the market and created program 3648. The Mortgage Debt Forgiveness act means you are no longer liable for taxes on that difference you didn't pay the mortgage company. Now, there are some rules that apply to this program. It has to be your primary residence for instance. And you also need to make sure the mortgage company isn't going to come after you for the difference. If you have questions - you should always ask your accountant or the person who prepares your taxes.
As I talked about earlier this year, when you sell your house for less than you owe the bank it's called a short sale. Nationwide, only about 10-15% of short sales are actually approved. In order to make this kind of sale work it's important to know what you're doing. Recently, I partnered with a processing company that works with most of the banks in getting these kinds of sales approved. There are other options you can persue and I would be happy to discuss those with you anytime.

Foreclosures & Short Sales - Part 3

Okay - I was a little late getting part 3 finished! But the nice weather is definitely helping the market so things are getting busier! In the final installment of Foreclosures and Short Sales - lets look at what happens when the bank finally forecloses. When the bank takes your house - it's called foreclosure. In Illinois - it requires a "Judicial Foreclosure". That means the bank must take you to court and basically SUE to take the house back. They cannot just file paperwork and take your house because you didn't make your payment. Once the bank has filed all the necessary paperwork for the foreclosure, the bank goes to court and the judge awards a "foreclosure" which means the sale of your property is ordered in order to settle the debt with the lender/mortgagor. The judge in the case schedules a date for teh sale of your home at auction. In Illinois - the county sheriff's department actually handles the auction/sale. Sheriff's department auctions are typically handled on the same day every month, and often weekly. On the day of the auction anyone can bid on the property.
After the auction - sometimes you have what is called a "redemption period" where you can buy the property back by paying the bank what you owe. To see if you have a redemption period you must check your mortgage paperwork. If you are still living in the house after the auction sale - don't worry. They aren't going to knock on your door that day and tell you to get out. But your days are numbered. It's usually a good idea to be out by this time if you can. Within a day or two of the auction, someone will probably come by the house to verify if the property is occupied or vacant. If the property is occupied - they may ask you to leave or try to intimidate you. If that doesn't work - they will have to go back to court for an eviction. within 2 weeks to a month they will most likely get an order for possession. At that court date - the judge will set a date for possession and you will have to be out that day. If you aren't - the sheriff will forcibly remove you from the property. The party is over.
So...after all that back and forth in court - the house is gone. Now the bank owns the home. Because of the court costs involved in a foreclosure - it often makes financial sense for the bank to do a short sale before going through all this legal mess. Because the work has just begun. Now that they have the property back - they have to sell it. First they hire a property management company to check the property for repairs, make sure utilities are on, winterize the property if it is winter and perform any other necessary maintenance. Then the bank orders an appraisal to see what the property is worth. Then they put the utilities in their name- more monthly costs. Finally, they hire a realtor to list and sell the house. Now they have commissions, utilities, property management costs, closing costs, repair, maintenance and upkeep costs. You can see how all this quickly adds up for the bank. Very rarely is the bank actually going to make money off taking your home. Banks are in the lending business - not the property business. They dont' want your house.
Now that the bank has all these added expenses - they are also going to try and get as much as possible for the property. When a bank owns a home it is called "REO" or "Real Estate Owned". Banks will negotiate on the sale of a property just like any other homeowner. But they also want to get as much as possible. Typically they are looking for 75-85% of market value. What is market value? That's a pretty hot topic these days. If everyone could agree on what market value is - I think we would all be better off!
If you are someone interested in buying a foreclosure -you actually have a better chance of getting a good deal in a short sale situation. I hope this discussion has helped shed a little light on the foreclosure, pre-foreclosure and short sale process. I am by no means an expert - but I've been doing it long enough that I think I've learned a thing or two!

Foreclosures & Short Sales - Part 2

Continuing the dicsussion on short sales & pre-foreclosures - why would the bank let you sell your home for less than you owe them? In the long run - they save money. Banks are in the business of lending money. Not managing real estate. As any agent who ever listed a bank owned property can tell you - the bureaucracy at a bank is nearly impossible to deal with. They make managing and selling a property harder. Despite what many people think - the bank does not want to keep your house. They want their money. And if they don't get it - they want to make sure the "asset" is protected and doesn't lose value.
As a Realtor, it isn't uncommon to look at a vacant house that is in the process of foreclosure - and it's trashed. Holes in walls, appliances all missing, garbage everywhere. The banks see this too - and it costs them money. So, again- why a short sale? Foreclosing on a house costs time and money. Months to complete the foreclosure process, attorney fees, lost interest on their money. Then, after they foreclose - property management fees, repair fees, utility fees, sales costs, etc. The list goes on. So if the bank can get a reasonable amount for the property - it just makes financial sense. That doesn't mean they will take "Any" offer. A lot of investors walk in with offers that are 50 cents on the dollar. My experience has been they don't take those offers. But every now and then they do - and tha'ts what investors are hoping for! But if the bank can get 75 cents on the dollar? 85 cents on the dollar? That's good for them.
So what does that mean for buyers? It means they have a chance of getting a home under market value. In a market where real estate prices are declining - they have a little cushion. It also brings a "perceived value" to the table. When buyers hear foreclosure- they automatically think they are getting a good deal. I always caution buyers that we still have to look at recent sales to determine if the property is a good price. Many times buyers will list pre-foreclosures for the amount they owe the bank. Many times - it is overpriced. So it's important to look at recent sales - I'm talking the last 3 to 6 months. Not a year ago - last year was a different market.
Tomorrow I will conclude this series as I talk about Foreclosed homes - or properties the bank has already taken back and is ready to sell.

Foreclosures & Short Sales - Part 1

Everyone is talking about foreclosures these days, even me. In March alone - I wrote about foreclosures 3 times. You've probably heard a lot of terms thrown around - foreclosure, pre-foreclosure, short sale, loss mitigation, REO. What do they all mean? In part 1 today, I am going to talk a little about pre-foreclosure and short-sales. In part 2 tomorrow - I will talk about Foreclosures.
A "Foreclosure" is when the bank takes your home back because you haven't been paying the mortgage. The "Foreclosure Process" is highly regulated by the state - and lenders must follow a certain process to foreclose on a home. "Pre-Foreclosure" is typically what you are going through before the bank actually takes the home. For the purposes of this blog, I will use the term "Pre-Foreclosure" to discuss what happens before the bank takes the home. In the "Foreclosure" section I will talk about how the property is auctioned off and what the bank does with a property once they have foreclosed - or taken the home back.
The foreclosure or Pre-foreclosure process takes about 6 to 8 months. This is from the time you miss your first payment. There are several different types of foreclsoure you may have heard of; Judicial Foreclosure - where the judge awards foreclosure to the bank, Deed in Lieu of Foreclosure - where you give the property back to the bank to avoid foreclosure, and Consent Foreclosure- where the court enters a judgment of foreclosure and gives the title to the lender. More details about these processes can be seen here.
During the pre-foreclosure process you can also sell your home. You can do this even if you sell your home for less than what you owe the bank. This is what we call a short-sale. In a short-sale, someone like myself works with you to put together a package of information the bank wants to see and then negotiates the sale with the bank. In order for a short-sale to work - the bank and anyone else with a lien on your property must approve the sale. This usually means they want to get paid! If you have a first and second loan - both lenders must agree to the terms of the sale. The second lien holder or mortgage holder usually gets very little - but if they don't take something and the bank forecloses - they get nothing.
If you are in pre-foreclosure it's important to start doing something very quickly. Too many times I see people ignore the problem or wait till the last minute to try and do something. The last month before the bank forecloses can be a very difficult time to get a deal done. Typically it will take 30-60 days just to negotiate with the bank and get a deal accepted. So if you are 30 days from foreclosure - it may be hard to get it done.
In part 2 of foreclosures tomorrow I will talk about why the bank would accept a short-sale and why buyers will be interested in purchasing your home.

Foreclosures & Pre-Foreclosures in Boulder Hill

Taking a look at the MLS today I see a fair number of foreclosures and pre-foreclosures in the Boulder Hill area.

1. $154,900 4 br, 1 bath, 1 car garage. Vacant bank owned property
2. $155,000 3 br, 1 bath, 1 car garage, fenced yard, new garage door, freshly painted. Pre-foreclosure/short sale opportunity. On the market for over a year.


3. $165,000 3 br, 2 bath, 2 car garage. Pre-foreclosure/short sale opportunity.


4. $168,000 3 br, 1 bath, 2 car detached garage, newly remodeled. Pre-foreclosure/short sale opportunity.


5. $169,900 3 br, 1.1 bath, needs TLC. Pre-foreclosure/short sale opportunity.


6. $172,000 3 br, 2 bath, 2 car garage, above ground pool. Pre-foreclosure/short sale opportunity.

Montgomery - Foreclosures & Pre-Foreclosures For Sale Now!

I took a client out looking at foreclosures & pre-foreclosures this weekend in Montgomery and there are a lot of great deals out there. Foreclosures and pre-foreclosures are just like anything else on the market. You make and offer and see what happens. Even the banks will negotiate. When the property is a pre-foreclosure that means the homeowner is selling the home because they are facing foreclosure. Often times this means it will be a "short sale". That means the home will be sold for less than the homeowner owes the bank- so it will be "short" of what is owed. Typically , the bank will allow this and forgive the seller the difference because it will be more costly for them to actually foreclose and then sell it themselves.
This list represents all the foreclosures and pre-foreclosures on the market up to $250,000. All these homes are listed in the mls with other Realtors. As your buyers representative/Realtor I can help you put together an offer on any of these properties. I have years of experience working with foreclosures and pre-foreclosures and it pays to have an experienced Realtor negotiating the deal for you.

$169,900 - 4 br/2.1 bath, no basement, 2 car garage in Montgomery. Needs work.
This is a bank owned foreclosure.

$199,900 - 3 br/2.1 bath, w/basement, 2 car garage, 2600 sf in Montgomery.
This is a pre-foreclousre opportunity and a short sale.

$202,000 - 3 br/2.1 bath w/basement, 2 car garage, 1900 sf in Montgomery.
HUD property/Government owned for auction.

$228,500 - 4 br/2.1 bath w/basement, 2 car garage, 2391 sf in Montgomery.
This is a pre-foreclosure opportunity and a short sale.

$229,900 - 3 br/2.1 bath w/basement, 2 car garage, 2381 sf in Montgomery.
HUD property/Government owned for auction.

$229,900 - 4 br/2.1 bath w/basement, 2 car garage, 2456 sf in Montgomery.
This is a bank owned foreclosure property.

$234,850 - 4 br/2.1 bath w/basement, 2 car garage, 2391 sf in Montgomery.
This is a bank owned foreclosure property.

$239,900 - 3 br/2.1 bath w/basement, 2 car garage, 2024 sf in Montgomery.
This is a pre-foreclosure opportunity and a short sale.

$245,000 - 4 br/2.1 bath w/basement, fp & 2 car garage, 2400 sf in Montgomery.
This is a pre-foreclosure opportunity and a short sale.

$249,900 - 4 br/2.1 bath w/basement, fp & 3 car garage, 2552 sf in Montgomery.
This is a pre-foreclosure opportunity and a short sale.

$249,900 - 4 br/2.1 bath w/basement, 2 car garage, unknown sf in Montgomery.
This is a pre-foreclosure opportunity and a short sale.

$249,900 - 4 br/2.1 bath w/basement, fp & 2 car garage, 2456 sf in Montgomery.
This is a pre-foreclosure opportunity and a short sale.

$249,900 - 4 br/2.1 bath, no basement, 2 car garage, 2545 sf in Montgomery.
This is a pre-foreclosure opportunity and a short sale.

$289,900 - 4 br/2.1 bath w/basement , FP & 2 car garage, 2737 sf in Oswego.
This is a bank pre-foreclosure opportunity and a short sale.

$299,900 - 4 br/2.1 bath, w/basement, fireplace, 2 car garage in Oswego.
This is a pre-foreclosure opportunity and a short sale.

If you would like a list of foreclosure & pre-foreclosure opportunities in another area visit the contact me section at IllinoisHouseHunter.com

WebHomeOfTheWeek.com - Plainfield Again!

Yep, the web home of the week is in plainfield again! Okay, this one is a shameless plug. It's my listing and we need to get it sold, plain and simple. You can view the details of this house at my website - http://illinoishousehunter.com/06743941.ad or call me directly at 630-846-4663 (Bo Buchanan). This home is a pre-foreclosure and a short sale. That means the homeowner owes more on the house than it will sell for. The purchase process will not go quickly - the bank will examine every step of the offer and it will take some time to get the deal closed. But, you can get a good house at a great price. I've done quite a few of these and I work with attorney's who are familiar with the process. Currently priced at $249,900 - the price will be lowered within the next couple days (I'll post it here when we lower the price).

The House has an amazing waterfront view. Check it out - this is a view from the kicthen back door - you see the fenced backyard and the pond!

The house has 4 bedrooms plus a loft - a full basement and lots of space! Overall, it's in really good shape. But you will need to do a few things - remove the debris left in the garage and basement, probably replace the living room carpet, fix part of the fence and part of the vinyl siding on the back of the house.

I think this is a lot of house - with a little work to be done. But get it at the right price and you'll be happy with the results! Call me if you'd like to see the house, I'll give you the inside scoop ;)

Plainfield WebHomeOfTheWeek.com

This weeks Web Home of the Week is a 4 bedroom home in Plainfield. I am the listing agent - and you can get more info about this house at http://illinoishousehunter.com/06742862.ad or call me at 630-846-4663. This home is amazing! It's a bank owned foreclosure listed below market value so this is your chance to get some instant equity! The price has been reduced over $100,000 by the bank so we're looking for an offer!!!! At $410,000 - I think it's an amazing price. Here's a quick look at the outside:




The exterior is a fiber board of some sort - not sure what exactly, and a grey fieldstone that really sets this home off! It's got a concrete driveway, 3 car garage and sits on a good size lot that's 90x100. Tax records list the sqaure footage at 3,794 square feet. It's got a wide airy open feel throughout the home and a HUGE basement!

The home is Located in the Farmstone Ridge subdivision off 127th - and the cheapest home that has sold in the last 3 years was $420,000 back in 2005! So at a $410,000 list price -this home is already a deal!!!!! It has 4 bedrooms, 3 and a half bathrooms, a fireplace and a full basement! The family room has an amazing 2 story ceiling with tons of windows so you'll never miss the sunlight!

The best part of this house has to be the kitchen - hardwod floors, center island, custom cabinets, stainless steel appliances, built in desk and a see thru butlers pantry!!!

Overall, this is a lot of house for a good price! Give me a call and check it out - or ask your Realtor to take you through. It's easy to see!!!