As I thought about today's blog, I looked for something positive to write about in the real estate world. I didn't find anything. There were a few sensational items about the developer's default of a $41M loan on the Glen. I also found an article about the highest price foreclosure in the Chicagoland area. For those who are interested it's a $16M loan default on a 400 plus acre horse farm in the Barrington area.
These items and many more like them, paint a bleak portrait of the real estate landscape. All the news is bad: the large amount on some defaulted loans make individual foreclosures appear insignificant. The sheer volume of failed developments including many in our own area take away our ability to feel for the individual homeowners who are facing foreclosure. If you are looking to buy some property now, this type of news makes it easier to take on a "shark" mentality. It allows us to view all property for sale as distressed. Low balls offers are the norm, if you are lucky to receive one at all.
But the truth is that not all the news is bad. Bravo to the NAR for attempting to provide the media with another perspective on the housing market. Although, we can argue that this is self-serving, so what? If there is some good news on the horizon, or positive trends, then let the NAR say it. After all, they certainly contributed to the slump that we are in, with their convincing arguments that "your home is your piggybank", "real estate will continue to rise" and other messages that persuaded people to buy homes that they couldn't afford. I'm all for letting them lead us out of this current mindset.
Tomorrow: not all homes for sale are distressed!
Summer is creeping it ways towards us. Are you ready?
Showing posts with label foreclosure. Show all posts
Showing posts with label foreclosure. Show all posts
Thursday, June 18, 2009
Monday, June 8, 2009
NAR holds first ever summit
The NAR (National Association of Realtors) held their first summit in Washington DC for the purposes of sharing ideas, advocating for certain legislation that will help the housing situation and help the news media get "additional insight". Sounds like they would like to have a hand in spinning the "news".
Here is a summary of some of the more notable items coming out of this summit, which include the current president of the NAR, Charles McMillan, Robert Reich, former U.S. Secretary of Labor, Pat Buchanan, Harold Ford Jr (D-Tenn) and others.
There are currently twenty (20) million homes under water....from being behind on mortgage payments to foreclosure. This is 1 in 5 homes in the US. The "reforeclosure" rate is over 50%. Reforeclosures occur when there is refinancing allowed on a property so as to avoid foreclosure.
This problem has been aggravated by stricter requirements on small mortgage banks. The larger banks, such as Wells Fargo and Bank of America have raised the net worth requirements of these smaller mortgage bank/brokers. This makes it extremely difficult for the smaller entities to obtain capital, and lend money. This is a classic "Catch 22" situation.
The smaller financial institutions who had traditionally provided mortgages for home owners, have seen their net worth diminish through foreclosures and the declining value in the homes they have financed. With the increase in capital requirements from the larger banks, these smaller entities are unable to help their clients who are behind in their payments because they are unable to obtain more cash to help with refinancing.
Bank of America and Wells Fargo have received TARP money. Should we as taxpayers provide money to bail out these institutions, who then institute regulations that not only don't provide assistance to us, but have the potential to cause even more homeowners to face foreclosure? What do you think?
Here is a summary of some of the more notable items coming out of this summit, which include the current president of the NAR, Charles McMillan, Robert Reich, former U.S. Secretary of Labor, Pat Buchanan, Harold Ford Jr (D-Tenn) and others.
There are currently twenty (20) million homes under water....from being behind on mortgage payments to foreclosure. This is 1 in 5 homes in the US. The "reforeclosure" rate is over 50%. Reforeclosures occur when there is refinancing allowed on a property so as to avoid foreclosure.
This problem has been aggravated by stricter requirements on small mortgage banks. The larger banks, such as Wells Fargo and Bank of America have raised the net worth requirements of these smaller mortgage bank/brokers. This makes it extremely difficult for the smaller entities to obtain capital, and lend money. This is a classic "Catch 22" situation.
The smaller financial institutions who had traditionally provided mortgages for home owners, have seen their net worth diminish through foreclosures and the declining value in the homes they have financed. With the increase in capital requirements from the larger banks, these smaller entities are unable to help their clients who are behind in their payments because they are unable to obtain more cash to help with refinancing.
Bank of America and Wells Fargo have received TARP money. Should we as taxpayers provide money to bail out these institutions, who then institute regulations that not only don't provide assistance to us, but have the potential to cause even more homeowners to face foreclosure? What do you think?
Friday, February 6, 2009
The "F" Word
Today, we begin a series of blogs about the "F" word. I'm talking about foreclosures, of course! What did you think I meant?
According to RealtyTrac.com, a website that follows foreclosures, and, for a fee, allows you access to that information, there was an 81% increase in foreclosure notices from December, 2007 to December, 2008. That is an incredible statistic, isn't it? An 81% increase in anything is enormous number. Think about it, an 81% increase in your grocery bill or time spent commuting or (heaven forbid) your weight is mind boggling!
But what does this statistic really mean? We are going to examine that, along with other issues relating to the effects of foreclosure in our hometown. There is no way we will avoid the scourge of foreclosure in our neighborhoods, but how are our Villages and school districts are planning for it will determine how we will handle the inevitable. We intend to explore this in future blogs.
But, for now, let's take a look at the actual foreclosures in Wilmette, Kenilworth, Winnetka, Glencoe and Northfield.
When we use the term foreclosure, it can mean one of three processes. There is preforeclosure: during this period a homeowner fails to make timely mortgage payments and is sent a notice of the lender's intention to foreclose. A Lis Pendis, a written notice is often filed in the Cook County Tax Assessor's Office, alerting those who may be interested in purchasing the home that they will have to obtain the Bank's approval as well as the seller's in any offer to purchase. The homeowner usually stays in possession of their home during this time, and will often attempt to modify the terms of the loan.
If the loan is not modified, then there will be an Auction or Sheriff's Sale of the property. This is the next phase of what we commonly think of as foreclosure. While anyone can buy the property, usually for the value of the outstanding lien (or mortgage), most often, the lender will buy its' own asset. During this time period, the homeowner is usually required, by law to move out of the home.
Finally, there is REO (real estate owned) or Bank owned property. The lender owns the property outright, and is responsible for upkeep, management and payment of taxes on it.
The different phases of foreclosure make a difference when we evaluate their effect on our hometowns. But, for the purposes of the following, foreclosure will mean all three phases.
At the present time, the following homes are in foreclosure: Wilmette, 36; Kenilworth, 2; Winnetka, 17; Glencoe, 20 and Northfield, 6. (source: Trulia.com, Zillow.com) These numbers, while unfortunate do not connote the same sense of catastrophe as the 81% statistic used by Realtytrac.com. Again, it pays to look closer at the statistics, rather than rely on the headlines.
It is a tragedy to be foreclosed upon, there is no doubt about it. In these situations, individuals lose much more than their homes. No one willingly wants to paticipate in this process. Many times there are life altering events, such as illness, death or divorce that precipitates the loss of a home. But, our community also suffers a loss when our friends and neighbors have their homes foreclosed. We intend to explore this in future blogs and help identify sources of assistance if you find yourself in this situiation. Stay tuned.
Make My Day Moment: for those of you who know this chick and my "second" son, Dan, I am proud to report that he was made squad leader of his Marine Boot Camp Platoon. He is the top shot expert on the rifle range, 1st class physical fitness and swim qualification 2 (the highest levels attainable in Boot Camp. The few, the proud, the marines!
According to RealtyTrac.com, a website that follows foreclosures, and, for a fee, allows you access to that information, there was an 81% increase in foreclosure notices from December, 2007 to December, 2008. That is an incredible statistic, isn't it? An 81% increase in anything is enormous number. Think about it, an 81% increase in your grocery bill or time spent commuting or (heaven forbid) your weight is mind boggling!
But what does this statistic really mean? We are going to examine that, along with other issues relating to the effects of foreclosure in our hometown. There is no way we will avoid the scourge of foreclosure in our neighborhoods, but how are our Villages and school districts are planning for it will determine how we will handle the inevitable. We intend to explore this in future blogs.
But, for now, let's take a look at the actual foreclosures in Wilmette, Kenilworth, Winnetka, Glencoe and Northfield.
When we use the term foreclosure, it can mean one of three processes. There is preforeclosure: during this period a homeowner fails to make timely mortgage payments and is sent a notice of the lender's intention to foreclose. A Lis Pendis, a written notice is often filed in the Cook County Tax Assessor's Office, alerting those who may be interested in purchasing the home that they will have to obtain the Bank's approval as well as the seller's in any offer to purchase. The homeowner usually stays in possession of their home during this time, and will often attempt to modify the terms of the loan.
If the loan is not modified, then there will be an Auction or Sheriff's Sale of the property. This is the next phase of what we commonly think of as foreclosure. While anyone can buy the property, usually for the value of the outstanding lien (or mortgage), most often, the lender will buy its' own asset. During this time period, the homeowner is usually required, by law to move out of the home.
Finally, there is REO (real estate owned) or Bank owned property. The lender owns the property outright, and is responsible for upkeep, management and payment of taxes on it.
The different phases of foreclosure make a difference when we evaluate their effect on our hometowns. But, for the purposes of the following, foreclosure will mean all three phases.
At the present time, the following homes are in foreclosure: Wilmette, 36; Kenilworth, 2; Winnetka, 17; Glencoe, 20 and Northfield, 6. (source: Trulia.com, Zillow.com) These numbers, while unfortunate do not connote the same sense of catastrophe as the 81% statistic used by Realtytrac.com. Again, it pays to look closer at the statistics, rather than rely on the headlines.
It is a tragedy to be foreclosed upon, there is no doubt about it. In these situations, individuals lose much more than their homes. No one willingly wants to paticipate in this process. Many times there are life altering events, such as illness, death or divorce that precipitates the loss of a home. But, our community also suffers a loss when our friends and neighbors have their homes foreclosed. We intend to explore this in future blogs and help identify sources of assistance if you find yourself in this situiation. Stay tuned.
Make My Day Moment: for those of you who know this chick and my "second" son, Dan, I am proud to report that he was made squad leader of his Marine Boot Camp Platoon. He is the top shot expert on the rifle range, 1st class physical fitness and swim qualification 2 (the highest levels attainable in Boot Camp. The few, the proud, the marines!
Thursday, January 8, 2009
Mallinckrodt in the Park foreclosure
The developers of Wilmette's own senior community, Mallinckrodt in the Park have been hit with a foreclosure lawsuit by M&I (Marshall & Isley) Bank of Milwaukee. Named in the $15 million suit were Donald Gianone, president of Oculus Development, LLC and five family members of Pickus Cos, who personally guaranteed the loan.
You may recall that the Village of Wilmette purchased the former Mallinckrodt College from Loyola University in order to save the historic building from a wrecking ball. Oculus Development, LLC & Pickus Cos, in a joint venture bought the building from the Village. They agreed to develop a senior condominium project including 12 "affordable" condo units that were priced at $200,000 in the building that once housed the college. The remaining units were listed for considerably higher, some over a million dollars. To date, approximately half of the 81 units remain unsold.
What do you think of the Mallinckrodt Predicament? Who are the victims here? Are there any villans?
On the bright side: If you find yourself looking for something to do this Sunday, January 11, 2009, stop by the Wilmette Rec Center on Old Glenview Rd. Starting at 2pm you can view amazing artwork at the Winter Recital & Vibrant Art of Persons with Disabilities Art Exhibit. A recital featuring The New Trier High Five Choir and some New Trier graduates begins at 3pm. Admission is free. Come and support Wilmette's art scene.
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