Jack Lewitz

Illinois Bank Losses Cost FDIC a Pretty Penny.

The Top 12 Illinois Bank Failures of 2009 report from Chicago Tribune:

These 12 Illinois Bank lost a total of $869 Million Dollars this year or 25% of total bank assets a little under $3.5 billion.

All of this money was insured by FDIC.

FDIC total Losses on a National Level are estimated to be $12.7 Billion with $42 Billion in total Bank Assets.

Is your local MLS behind the eight(8) ball when it comes to Short Sales?

Mine is and here is why!!

According to my local MLS, all signed contract between buyer and seller must be shown as “Under Contract”.

Here is the problem. Short Sales are not your typical sales between buyer and seller.

Short Sales are contingent upon the “Approval” from a third party “The Bank”. This “Approval” can often take between 3 -4 months.

So what does this mean for the Seller. It means taking the property off the market for 3-4 months, getting fewer showings and this can affect the outcome of a Short Sale.

In my opinion I think my MLS board is behind the 8 ball when it comes to understanding how Short Sales work. In Short Sales your orginal buyer often is not your final buyer but if you take it off the market in order to comply with the board rules you are missing crucial marketing time for the property.

I wish the MLS would change the rules or modify the rules when dealing with Short Sales because as a Listing broker my fudiciary relationhip is with the Seller, not the bank. And as a Listing Broker I want the bank to approve a short sale for my seller.

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The New York Times announced that JP Morgan Chase has reported $2.7 billion dollar profit this second quarter even though we are in the midst of the worst economic downturn in decades.

Meanwhile in a Chicago Crains article, Realty track was quoted reporting a 32 % increase in foreclosure filings in Illinois. In Illinois, 10,796 households received a foreclosure notice in June, or one in every 486 households.

Based on these two different article, who are we to believe? Are the banks getting better and or are more homeowners loosing their homes to foreclosure?

One would believe a little bit of both.

Certain big banks and JP Morgan Chase is one of the biggest, has benefited from the stimulus plan and while reporting some profits is not totally out of the woods as some experts are predicting.

There are not only bad debts on the books of the bank but if the economy continues to slump and unemployment continues to rise as some experts predict the current health of the banks will be in question.

As I have said in the number 1 problem that we are about to face is the rise in unemployment. As more people loose their jobs more homes will be foreclosed by banks and therefore threaten the banks balance sheets.

Deciding what to do next about your home is like putting the pieces to a puzzle together.

Sometimes you don’t know where to start. When doing a puzzle, I always start to look for end pieces and work my into the middle.

Sometimes I get stuck and start all over. Sometimes I try to make two piece try to fit when they don’t.

Recently I heard of two separate families trying to solve the puzzle to their home problems by doing a loan modification on one corner of the puzzle and trying to fit a Short sale piece right next to it in the same puzzle.

Doing Loan Modifications and Short Sales together is like forcing two pieces in a puzzle that just won’t fit.

In the end up with an incomplete puzzle.

A friend of mine sent me this joke and I am reposting it as I received it:

A New Orleans lawyer sought an FHA loan for a client who lost his house in Hurricane Katrina and wanted to rebuild. He was told the loan would be granted if he could prove satisfactory title to the parcel of property being offered as collateral. The title to the property dated back to 1803, which took the Lawyer three months to track down.








After sending the information to the FHA, he received the following reply.












(Actual letter):





"Upon review of your letter adjoining your client's loan application, we note that the request is supported by an Abstract of Title.


While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back


to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin."





Annoyed, the lawyer responded as follows.





(Actual Letter)





"Your letter regarding title in Case No. 189156 has been received. I note that you wish to have title extended further than the 194 years covered by the present application. I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased, by the U.S. , from France in 1803, the year of origin identified in our application.


For the edification of uninformed FHA ureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by


Right of Conquest from Spain . The land came into the possession of Spain by Right of


Discovery made in the year 1492 by a sea Captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Isabella. The good queen, Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus ' expedition.

Now the Pope, as I'm sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world.


Therefore, I believe it is safe to presume that


God also made that part of the world called Louisiana ! . God, t herefore, would be the owner of origin and His origins date back to before the beginning of time, the world as we know it AND the FHA. I hope you find God's original claim to be satisfactory. Now, may we have our damn loan?"




He got the loan.