Chicago, IL

Is It A Stop Sign Or A Coast Sign?

03-10-12

Michael Hobbs

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Office: (773) 388-0003

Unfortunately, it should not come as a surprise in today's time-starved world, but nonetheless it did.

I learned today that this is not a Stop sign.

Stop Sign

It is more commonly known as a Coast sign. Yes, that is right. In Chicago, they have renamed these lovely red with white trim signs to Coast signs. Granted, I don't suspect Mayor Rahm Emmanuel is going to make an announcement any time soon, but be forewarned.

Next time you see a car approaching an intersection with one of these Red with White trim 'Coast' signs, you'll know that they there almost zero probability that the driver is going to come to a complete stop and instead coast through the intersection.

And for the rest of us, be careful of those 'Coast' drivers.

Michael Hobbs, PahRoo Appraisal & Consultancy

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Bank of America Parts Ways with Fannie Mae

03-09-12

Yuval Degani

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Office: (312) 242-1000

Following a series of escalating battles between the giants of the housing loan market over billions in financial losses, Bank of America reported on February 23 that they will no longer sell new mortgages to Fannie Mae.

Real estate analysts believe this act underscores the increasing tensions between these two companies, currently locked in an extended legal battle. The main issue at hand? Bank of America is having to buy back numerous defaulted mortgages from Fannie Mae on account of the original loans did not abide by proper underwriting standards.

Guy Cecala, publisher of trade publication Inside Mortgage Finance, describes this as a big deal within mortgage circles. He goes on to say, “It would be fairly extreme for a small or midsized lender to do this, but for a major lender, it’s very extreme.”

Fannie Mae, a large government-sponsored mortgage finance enterprise, is responsible for packaging bank-provided mortgage loans into securities which are then sold to investors. Almost 40 percent of all U.S. mortgages are backed by Fannie Mae.

According to Inside Mortgage Finance, Bank of America was Fannie Mae’s third-largest lender last year – providing them with $37.7 billion in mortgages. Bank of America has adamantly promised that this decision will in no way negatively affect their customers’ business or the credit available to them.

To make up for the loss of their most sizeable backer, Bank of America has said they will look to other government-sponsored mortgage buyers, including Freddie Mac and Ginnie Mae. The company also believes they will find backing support in the private sector and, at the end of the day, they still have a considerable balance sheet at their disposal.

Lawrence Di Rita, a spokesperson for Bank of America, says, “We will rely on other sources of liquidity to continue to ensure we are lending to our customers and supporting the housing market recovery.” Di Rita also added that Bank of America will still participate in homeowner assistance, in part by employing the federal government’s loan modification program.

What does this mean for Chicago home owners and buyers? At this time, there is no clear indication if or how local markets maybe affected. It seems the current threat is to stakeholders in Bank of America, whose shares fell at one point by $5.

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Is That A Pedestrian Crosswalk Or A Hit And Run Waiting To Happen?

03-09-12

Michael Hobbs

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Office: (773) 388-0003

Everyone has seen those pretty white and yellow lines painted at intersections that are generally accompanied by a white, yellow or orange flashing signal for pedestrians to pass to the other side of the street. Real estate professionals spend a disproportionate amount of their time in the car traveling between appointments....so they are more aware of those 'painted lines' at traffic intersections.

Have you noticed that those pretty white and yellow lines at a traffic intersection are not painted in the shape of a bulls-eye? Unfortunately, in some cities it seems that drivers do see it that way.

Take for instance Chicago. Jay-walking as it is affectionately known is quite common and pedestrians do not get ticketed for such actions. Hence, pedestrians are willfully walking in or through traffic without waiting for a traffic signal and therefore potentially endangering themselves. Of course, most drivers detest this experience but 'put up with it', because it is so commonplace.

Take for instance California, pedestrians are regularly waiting patiently at the crosswalk to pass when the traffic signal indicates. Furthermore, drivers regularly slow down or stop to allow pedestrians to walk across the street even when it is a green light. Quite courteous indeed.

Yes, the Rules of the Road are the same, but pedestrians definitely act differently in different cities. So, no matter whether those crosswalks look like Bulls-eyes or just like some bad origami, hitting pedestrians is not advised!

Michael Hobbs, PahRoo Appraisal & Consultancy

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Crosswalks Are Not Treated Equally

03-07-12

Michael Hobbs

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Office: (773) 388-0003

Just when you thought that similar things should be treated the same, I found that it isn't the case when it comes to crosswalks. Yes, those darling white lines painted at intersections for pedestrians passing from one side of the street to another are not considered equal.

Take for instance Chicago. For anyone who has walked across a street in Chicago, you know that drivers do not regulalry slow down to grant pedestrian right of way. Of course, I'm not talking about what the Rules of the Road say you should do, I'm talking about what is commonplace amongst drivers. In Chicago, it is not uncommon for drivers to rule the road and expect a pedestrian to yield.

Take for instance Los Angeles. For anyone who has walked across a street in LA, you know that drivers consistently slow down to grant pedestrian right of way and will even go out of their way to stop for those pedestrians that jay-walk. Yes, the Rules of the Road are likely the same, but they surely are adhered to differently. In LA, it is common for drivers watch out for pedestrians and respectfully stop other drivers to allow for a pedestrian to walk across the street.

So, the more things look the same, the more they are not always what they seem.

Michael Hobbs, PahRoo Appraisal & Consultancy

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THE LIMBO OF THOSE ENDURING DELAYED FORECLOSURES

03-05-12

Dean Moss - Dean's Team Chicago IL Real Estate Team

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Office: (888) 770-8326

Mobile: (773) 290-8393

Under "normal circumstances," IL Foreclosures take about nine months to one year to run their course - from the first court filing of mortgage delinquency, until the homeowner if finally evicted and forced to leave their home. For many homeowners in distress, however, circumstances here are far from normal. Indeed, it is not unusual for some homeowners who haven't made a mortgage payment in two to three years to still be in their homes, waiting to be forced to leave.

Many blame the record high levels of pending foreclosures on the high level of distressed inventory that has come to market since the collapse of the housing boom, traced back around Chicago to mid-2006. Banks are just too overloaded to proceed with foreclosure in a timely manner.

The Robo Signing Scandal, identified in 2010, targeted lenders who were sloppily rushing through foreclosure paperwork on thousands of delinquent mortgage loans, without thorough supervisory review or completely following statutory time requirements. The lenders' behavior was the subject of a massive court settlement impacting homeowners facing foreclosure all over the U.S. this year.

Casual observers may seem envious of those homeowners in the midst of a foreclosure delayed - without paying their monthly house payments, these distressed homeowners often attempt to pay down their remaining debt during their waiting time. But they continue to stress over their inevitable eviction - they don't usually know exactly when their forced move-out will take place.

From the perspective of the lenders against which the homeowners have defaulted, delinquent mortgages are assets not performing, and not providing a return to the lender. In addition, foreclosed homes on a block tend to draw down neighborhood property values - many who know eviction is imminent, eventually, refrain from performing normal maintenance on their soon-to-be-former homes.

According to Reporter Kathleen Lynn of The Bergen County (New Jersey) Record, as published in The Chicago Tribune, the average time between the day the lender starts the foreclosure process and the eventual eviction of the delinquent homeowner in NJ can take 2 1/2 years.

Most of today's homeowners who fell delinquent either leveraged too much to purchase their home originally, or borrowed too much against it with the easy Cash Out Refinances and Equity Lines of Credit easily available up until a couple of years ago. Monthly payments increased, leaving little wiggle room for many as the economy slowed and jobs withered as early as 2007. When property values began to slide at about the same time, sale or refinancing became tougher, then impossible, for many.

Some considering the Short Sale route - trying to sell the property for less than what is owed on the mortgage, with the bank's blessing. Others sought Loan Modification, too many times unsuccessfully. Also, lenders do not accept partial payments on a delinquent home loan - doing so will considerably delay a potential foreclosure.

Seeing no other logical option, a growing number have tended to stay in their homes as long as they can, accepting the severe credit consequences that can prevent purchase of a new home for seven years or more.

In the end, when they are forced to leave the home where many have lived and often raised their families in for many years, the only option is renting, and a long period of credit rebuilding. For many, however, the dream of returning to the comparative normalcy of owning their own home might be a long, elusive way off.

Please see our post today via BlogChicagoHomes.com.

DEAN & DEAN'S TEAM CHICAGO

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