Evanston, IL

Governor Pat Quinn signs Foreclosure Bill Public Act 95-1047 on April 5 ,2009.

The new bill will give more time to homeowners to work with housing counselors and lenders together in order to avoid foreclosure.

The new law requires Lenders to send a notice to all homeowners who are 3o days past due on their mortgage.

The notice advises homeowners that they can seek housing counseling at a HUD approved counseling agency.

No foreclosure action can be taken against anyone until they receive this notice. HUD approved counselors will try to develope a sustainable work out plan to be submitted to the lender for approval.

If the lender agrees to the new work out plan then they are not allowed to pursue foreclosure while the homeowner is in compliance with the plan.

Are you thinking about buying a foreclosure property?

Buying a foreclosure is not as simple as it sounds and requires some expertise. If you are a first time home buyer, I recommend you find yourself a Realtor who can assist you with the process.

There are many different ways to buy a foreclosure home. You can buy a home as a “Short Sale”, go bid on a home at a Sheriff Sale Auction, or buy a home after the auction which is typically listed as a Bank Owned Foreclosure.

In all instances you are buying a home in “As-Is” condition. Many foreclosure homes have been neglected, damaged, vandalized, and should be inspected by a licensed home inspector. Plan a budget for repairs needed prior to writing an offer.

Have your Realtor complete a “Competitive Market Analysis” of home sales in the area. Remember many foreclosures are listed below Market Value and can be a bargain.

Most “Short Sales” are listed below Market Value but need the approval from the lender before a sale is accepted.

Make sure you are pre-qualified to buy a home with a lender before writing an offer. A bank will only negotiate with qualified buyers. This means showing stated income, pay-stubs, 2 year tax returns, proof of down payment. If a cash offer verification of funds in the bank are required.

Are you upset about declining home values in your neighborhood. If you are you are not alone.

The other day I was asked by a neighbor to do a “Market Value” on her home because she is a senior and is thinking about selling her home and moving to a retirement community.

When I completed the “Market Value” I was shocked to see the lower value of homes even in my own neighborhood.

I remember 15 years ago several neighbors decided to put additions on their homes and we used the same contractor and were very happy with the results. Each year we saw our home values increase as a result of our home improvements.

Today is a different story. There are 3 homes on my own block which are listed as “Short Sales” and another 3 homes in the neighborhood that are bank owned foreclosures.

On a personal level I feel very sad about the current affairs of my neighbors and my neighborhood. I also realize that home values will continue to decline in my neighborhood just like other neighborhoods and there is little I can do about it.

I do have confidence that the home values will eventually stabilize and we will see the real benefits to home ownership in the near future.

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Written by Jack Lewitz | Discussion: No Comm

I'm sure that nobody else has written about this subject... since there seems to be a lot of confusion.... so here is my basic explanation of how the $8,000 tax credit works:

The requirements, and who would qualify for the credit include:

• The tax credit is for first-time home buyers only. (a first-time home buyer, according to the IRS, is defined as someone who has not owned a principal residence during the three-year period prior to the purchase.)
• The tax credit does not have to be repaid. (unlike the former $7,500 tax credit plan)
  
• The tax credit is only equal to 10 percent of the home’s purchase price up to a maximum of $8,000. So if you purchase a home for $70,000, you'll only qualify for a $7,000 tax credit.. (10% of $70,000).
  
• The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009. So anytime THIS year!
  
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

Claim the tax credit on your federal income tax return. Home buyers would complete the IRS Form #5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase.

If you've already filed your taxes, prior to purchasing your house, you can file an amended return to claim your credit.

For an overview of the plan go to: http://www.federalhousingtaxcredit.com

There... wasn't that easy?

Ooops... one important addendum. if you sell the property before 3 years, a portion of the credit will need to be repaid. If you don't sell it for more than 3 years, it need not be repaid.

You canput “Lipstick on a Pig” but it will still be a “Pig”. This is what the government is doing with the toxic assets.

They have now changed the name from “Toxic Assets” to the term “Legacy Assets

What is a Legacy Asset? Well according to Wiki, “Legacy Assets are those assets which are less productive (outdated) and in some cases least productive overtime, they are just on the brink of being a liability overtime.”

What does Toxic Mean? Well according to Wiki, “Toxic means capable of serious injury and even death from poison.”

It really doesn’t matter which word you use when describing these bad loans. The way I see it is they will continue to be a liability to our economic and financial recovery and may even cause serious injury or death to the current way we function as a society.

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