Archive for June, 2009

Foreclosures Affect Wealthy Families Too.

According to Chicago Crains the most expensive home sold in 2006  is pending foreclosure from its lender Amcore Bank in the amount of $16 million

The property is a 400 acre estate horse farm that includes a 10,000 SF home built in 1992 with guest and staff quarters, numerous barns and 1/2 mile race track. The property has a conservation easement that restricts any future development on the property to  8 additional homes.

The  property was sold to the current owner in 2006 in a sealed bid for $19 million dollars. This sale was the most expensive home sold in Illinois at that time.

According to Crains the foreclosure suit was filed by Amcore Bank when the homeowners failed to payoff their $14.5 million mortgage when it became due in May 2009. The owners have a counter suit against the bank.

Written by Jack Lewitz | Discussion: 1 Comment »

Does Anybody Want a Free Glass of Lemonade?

As I reviewed the Home Affordable Modification Program (HAMP) in more detail I thought of another analogy to help people understand the concept “Mortgage Forebearance”.


As a child my first business enterprise was a “Lemonade Stand” in front of my house.

I stood outside selling lemonade to people as they parked their cars and went to the beach near my house.

My stand look something very similar to the picture you see in this blog.

If you look real close to the picture you will see children standing in line with money and the very last boy in line is standing there without anything.

He appears to be looking for something. Maybe he thinks money will fall from the sky. I don’t know about you but I think he plans on asking for  a free drink in the form of  I.O.U.

Well a ” Mortgage Forebearance is also a form of an I.O. U. iou1 instead of Lemondade it’s your home.

Well back to my analogy. If I were the operator of this lemonade stand and I gave this boy a free glass of lemonade in the form of an I.O.U. what are the chances that I would collect my money after the glass is empty? Not very good. As a entrepreneur I expect those losses.

Now back to the homeowner who has to  agree to a “Mortgage Forebearance”  Let’s say this homeowner agrees to sign this I.O.U. with the bank and wants to sell his home in 5 years and the value of the home is less than the amount he has agreed to pay back to the bank in the form of the I.O.U. what is the banks chance of collecting on this I.O.U.

I think it is pretty much like the boy in the lemonade stand.

Written by Jack Lewitz | Discussion: No Comments »

10 Things to Ask a First Time Home Buyer

home I was invited to be a guest speaker at a First Time Home Buyer Seminar and was given a list of topics to discuss.

As I prepared for this seminar, I thought about  how I wanted to present  material to a group of first time home buyers and what would be the most important thing to say to this group. So here is what I came up with. I wanted to first talk to this group  and find out

Truths or Myths

  • Owning your home is the American Dream
  • Buying a home is one of the most important investments in ones lifetime.
  • People who own a home feel better about themselves.
  • Owning a home can bring long term security and wealth
  • Owning a Home is better than Renting

Basic Questions to Ask Yourself:

  • Why do I want to own a home?
  • Why is it important to Me and My Family that I own a Home?
  • What Does my Dream Home look like?
  • What would happen if I do not find my Dream house?

As a Realtor I think buying a home is one of the most important decisions in ones life time. People look back on their life a remember great moments like getting married, having a child and buying their first home.

For those of you ready for the challenge, get ready for an exciting time. I challenge you to think, learn, embrace the experience with all of your senses.

Written by Jack Lewitz | Discussion: No Comments »

Banks Should Stay Out of The Real Estate Business…

277_cartoon_bank_bailout_hurwitt_small_overI have been a realtor for over 10 years  it is my opinion that Banks Should Stay out of the Real Estate Business and do what they do best LEND MONEY.

I recently had an experience doing a short sale where I had 7 offers and I could not get the bank to accept the highest and best offer we had which was over list price.

If you have been in this business long enough you know “Your first offer is usually your best offer” so why does the bank think their property is worth more.

I know for a fact that as soon as they put the property back on the market there will be a price reduction and they will get less for the property.

So again I say to them “Do you want to be in the Real Estate Business or Lending Business?”

Remember another cliche” Time is of the Essence” or in the Finance business ” Time Value of Money”. Money received today is worth more than money received in the future…

Written by Jack Lewitz | Discussion: No Comments »

Unable To Afford an Affordable Home?


Unable to Afford an Affordable Home what next?  The Obama Administration and The National Association of Realtors are soon to announce new procedures and uniform process for Short Sales under its new Foreclosure Alternatives Program.

This program will work with borrowers (Homeowners) who do not qualify or meet the minimum eligibility requirements fro the Home Affordable Modification Program.

Before proceeding with Foreclosure, servicers must determine if a Short Sale is appropriate.

Incentives include a $1,000 for servicers who are successful in completing a Short Sale or Deed-in-lieu of Foreclosure. The Homeowner will also receive a $1,500.00 check as relocation expense and another $1,000 to payoff any junior liens on the property.

There will also be Standardized Documents, including Short Sale Agreement and Offer Acceptance Letters. The goal is to make things simple and help speed the Short Sale Process.

Servicers will independently order Broker Price Opinions (BPO) to determine the market value and minimum Net return to the investor.

The Short Sale Agreement will give a minimum 90 days to market and sell the home and up to 1 year in more difficult markets. If the property does not sell within this time frame then the servicer would agree to a Deed-in-Lieu of foreclosure.

Written by Jack Lewitz | Discussion: No Comments »

Obama Plan Defined

Obama Economy Making Home Affordable Program often referred to as the “Obama Plan” offers  two programs: Home Affordable Refinance: For borrowers who are current on their mortgage but find it difficult to refinance because the value of their home has declined in value. Eligibility:

  • You must own a 1-4 unit building
  • The loan must be a Fannie Mae or Freddie Mac Loan.
  • For Fannie Mae call: 1-800-7Fannie (8am to 8pm EST) or visit Fannie Mae
  • For Freddie Mac call: 1-800-Freddie (8am to 8pm EST) or visit
  • You must be current on your mortgage,
  • What you owe on your mortgage is the same as the current market value or slightly less.
  • You have a job and income to support a new loan at a lower rate.

Home Affordable Modifications: For borrowers who are either struggling to keep their loans current or are all ready behind on their mortgage. Eligibility:

  • You must owne a 1-4 unit building
  • Have an unpaid principal balance equal to or less than $ 729,750
  • Loan Origination date on or before January 1, 2009
  • Have a mortgage payment including taxes, insurance, association dues that is more than 31% of your gross income.
  • Have a mortgage payment that has become difficult to pay due to loss of job, income or other personal family problems which is considered a hardship.
  • The loan Modification program is a voluntary program with the following  Mortgage servicers

Written by Jack Lewitz | Discussion: No Comments »

Fact or Crap about Short Sales


Are the following statements fact or crap:

“A large percentage of Short Sales never Close”

“Short Sales take too long to Close”

“Banks will receive less money after a Foreclosure than with a Short Sale”

It was these three statements that made me do research and search for the truth about Short Sales and Foreclosures.

The following chart examined only closed transaction for the past 12 months in five different communities in five different counties in Illinois.

The Average Sale Price Sold is the average of lowest price and higest price sold during the 12 months.

The Average Market Time is the average time of lowest price and highest price sold during the 12 months.

City, County # of Sales Avg Sale Price Avg Market Time
Skokie, Cook Co.
Short Sales 36 $249,000 173
Foreclosures 6 $238,000 53
Round Lake, Lake Co.
Short Sales 104 $131,000 115
Foreclosures 79 $105,000 63
Woodstock,Mchenry Co.
Short Sales 19 $139,500 55
Foreclosures 10 $161,500 68
Naperville, Dupage Co
Short Sales 40 $288,000 164
Foreclosures 15 $202,500 21
Joliet, Will Co
Short Sales 123 $103,000 176
Foreclosures 77 $97,000 11

“Short Sales Do Not Close”- This statement is Crap. In all five communities more Short Sales closed than Foreclosures.

“Short Sales Take Longer to Close”- This statement is Fact. In four out of the five communities it did take longer to close a Short sale than a foreclosure.

“Banks will receive less Money from a Foreclosure than a Short Sale”- This statement is Fact. Four out of five communities surveyed banks did in fact receive less money after the foreclosure.

Woodstock, IL was the only community where a foreclosure commanded a higher sale price than did a Short Sale. There are many reasons why this could happen and would need to be further explored before any conclusion can be made about this community.

Written by Jack Lewitz | Discussion: 2 Comments »

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