Archive for April, 2009

What Goes into a Broker Price Opinion (BPO)

The Short Sale review process begins with ordering the Broker Price Opinion (BPO).apple  and peach composition isolated on white

A BPO is nothing more than comparing “Apples to Apples” (Single Family to Single Family, Condo’s to Condo’s and Multi-family to Multi-family) and coming up with a “Current Market Value” for the Subject Property.

Three (3) Sales Comp’s are required in each BPO. The bank wants these sales to be within the past 6-months to 12-months. The Sales must be within a mile radius of the subject property and if there are any sales that are sold in “As-IS” condition like other Short Sales or Foreclosures then these should be used first as a Sales Comp. The Bank wants to also know the Last List Price , the Final Sales Price, the Number of Days on the Market, and Financing such as FHA, Conventional for the buyer.

Three (3) Active Listings are required in each BPO. The bank wants Active Listings of other Short Sales and Foreclosures being sold in “As-Is” Condition. These listing should be within a 1 mile radius of the subject property. The Original List Price, Current List Price, and number of days on the market is also included.

Market Conditions are included in a BPO. The average Days on Market (DOM.), description of area as rural, suburban, or urban. Is the market declining, stable, or increasing.

Subject Marketability is describing the negative and positive features of the subject property in relation to the current market conditions.

Estimated Value is based on “As-Is” Conditions and “Repaired Conditions. Market Values will include List price and estimated Sale prices for 60-90 days and another value for 90-120 days.

Written by Jack Lewitz | Discussion: No Comments »

Submitting a Short Sale Package

Tax Accountant

You have a complete Short Sale Package and now  your ready to submit it to the Loss Mitigation Department of the Bank. While you may be happy to get this to the bank…

The Loss Mitigation Department may not be as happy as you.

Each file handler in a loss mitigation department handles about 300-500 Short Sale Files and may look like this..

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Because of the number of files they receive they will do anything they can to reject a Short Sale file.

Be prepared it takes a long time to get your file  reviewed.

Written by Jack Lewitz | Discussion: No Comments »

Illinois Foreclosures are conducted in the Courts

istock_000000764931xsmallAll foreclosures in Illinois are conducted in the courts. The lender must file  a lawsuit to obtain a judgment for foreclosure.

The first notice a home owner will receive is a formal legal document called a “Notice of Default” (NOD). The general time frame to receive a NOD is 90- days after the first missed payment.

The second  notice is called “Notice of Motion”. This notice usually requests the homeowner to appear in court and plead its case, give reasons to the court for the missed payments, or come up with a plan to satisfy the default.

If the borrower does not appear in court a lender can file a “Complaint to Foreclose Mortgage” with the court. This Complaint to Foreclose would be the third notice sent to the homeowner or published in the paper. Another 30-days is granted to the homeowner to file an answer to the court.

If the homeowner again fails to answer , the court will usually issue a “Default Judgment”  in favor of the lender. From the date that the Judgment is entered the borrower has a statutory 90-day redemption period before a sale can take place. If the home is abandoned this 90- days can be shortened to 30-days.

A Sale date must be after the Redemption period.

A ” Notice of Sheriff Sale” is published in a local paper, in the county where the property is located once a week for three weeks. Not less than seven days after the final notice is the Sale Date published.  The lender provides the opening bid. The person with the highest bid at the sale receives a Certificate of Purchase.

Following the sale, the Sheriff or selling officer will report the sale and “Motion to Confirm Sale” must be filed  before a Sheriff Deed is issued.

Written by Jack Lewitz | Discussion: No Comments »

What is a Complete Short Sale Package?

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A complete Short Sale Package will help you get the attention from the Loss Mitigation Department.

Often People do not understand what is to be included in a Short Sale Package. An incomplete file often gets put at the bottom of the pile.

To make sure this does not happen to you, I am putting together information on what is needed to negotiate a Short Sale with your lender.

All Short Sale Packages will only be assigned a Loss Mitigator with a complete package.

Items Seller Buyer
Executed Sales Contract X X
Executed Short Sale Rider X X
Mortgage Commitment Letter X
Listing Agreement with Realtor X
W-2 (Two Years) X
Pay Stubs (Two Months) X
Tax Returns (Two Years) X
Financial Statement X
Hardship Letter X
Signed Authorization to Release X

Written by Jack Lewitz | Discussion: No Comments »

How much Is Your Home Worth Today?

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How much is your home worth today?

Depending on which county you live in your home has lost between 22%-42% of its value since 2007.

(Information provided in the table below comes from the MLS)

County Avg Price 2007 Avg Price 2008 Avg Price 1st Qtr 2009
Cook $377,370 $327,801 $231,606
% Decline 0% 13% 29%
Lake $430,467 $378,877 $282,680
% Decline 0% 12% 25%
McHenry $284,958 $257,313 $212,640
% Decline 0% 10% 17%
Kane $299,724 $275,390 $208,937
% Decline 0% 8% 24%
Dupage $449,508 $415,413 $357,122
% Decline 0% 8% 14%
Will $286,961 $266,858 $221,381
%Decline 0% 7% 17%

Written by Jack Lewitz | Discussion: No Comments »

4 out of 10 Homes Sold were Foreclosures in First Quarter of 2009

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More striking is the percentage of pre-foreclosure and foreclosures sales for the first quarter of this year.

4 out of 10 sales in the first quarter of 2009 was a pre-foreclosure or foreclosure sale.

For every Short Sale sold there was an equal number of Bank foreclosure sold in the first quarter of 2009.

County # of Single Family Sales # of Short Sales # of Bank Foreclosures Percent of Total
Cook 3,559 762 743 42 %
Lake 707 151 119 38%
McHenry 340 89 51 41%
Dupage 712 147 87 33%
Kane 462 142 63 44%
Will 776 176 162 44%

Written by Jack Lewitz | Discussion: No Comments »

Growing Concern about the number of Foreclosures on the Market.

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Information comes directly from the MLS.

The number of homes in pre-foreclosure or foreclosure appears to be the focus of most people these days and for a number of reasons.

First, the shear number of homes in foreclosure is growing everyday.

In Cook County 20% of all active listings are either pre-foreclosure short sales or bank owned foreclosures.

County # of Active Listings # of Short Sales # of Bank Foreclosures Percent of Total
Cook 24,440 2,995 1,801 20 %
Lake 6,532 594 325 14%
McHenry 3,153 302 169 15%
Dupage 6,175 565 293 14%
Kane 4,265 473 245 17%
Will 5,445 532 306 15%

Written by Jack Lewitz | Discussion: No Comments »

Illinois Is Now 7th on the List….

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According to Realty Tracs February 2009 report on Foreclosures.

Illinois is listed as the 7th largest in terms of the number of home foreclosures.

State Rank # of Homes in Foreclosure
Nevada 1 1 in 70
Arizona 2 1 in 147
California 3 1 in 165
Florida 4 1 in 188
Idaho 5 1 in 358
Michigan 6 1 in 360
Illinois 7 1 in 369
Georgia 8 1 in 389
Oregon 9 1 in 446
Ohio 10 1 in 451

Written by Jack Lewitz | Discussion: No Comments »

Governor Pat Quinn Signs Foreclosure Bill

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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.

Written by Jack Lewitz | Discussion: No Comments »

Before You Write a Check to Buy a Foreclosure..

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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.

Written by Jack Lewitz | Discussion: No Comments »

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