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NAR VIDEO REPORT on Real Estate

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Fannie and BOA: Playing the Game of Hearts….

hearts game

 

 

 

I just finished reading an article about the recent agreement between Fannie Mae and BOA. BOA has agreed to pay FAnnie MAe $3 Billion in Compenatory Fee obligations, will repurchas 30,000 loans from Fannie and sell their servicing rights of 2 Million Mortgages.

As I read this article it reminded me of a Game of Hearts. In a game of hearts you pass 3 cards to the person next to you. Usually these are the worst cards in your hand because the objective of the game is to end up with “no hearts” or all of the “hearts” which is called “Shooting the Moon”. Shooting the Moon includes getting all hearts plus the Queen of Spades which is called ” the Bich” in the game.

Now back to Fannie and BOA. Fannie has just passed BOA its worst cards the “ACE” and “King” of Hearts and the “Queen” of Spades (Bitch) cards to BOA. Now it is up to BOA to decide how to play the game. Do they try to win by not getting any Hearts or do they get them all by “Shooting the Moon”.

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Alderman wants to explore fighting foreclosures with eminent domain

By: Micah  MaidenbergJuly 30, 2012

(Crain’s) — Chicago’s City Council is wading into the debate about whether  governments should use their eminent domain power to save borrowers from  foreclosure.

 

Under a controversial plan pitched by a San Francisco-based investment firm,  municipalities and counties would use their eminent domain authority to buy up  mortgages that are “underwater,” or exceed the value of the homes securing them.  The governments would then reduce the principal owed on the loans and sell them  to private investors.

 

Officials in Southern California and in New York already are considering the  idea. Now, Chicago Ald. Edward Burke (14th) wants a joint committee to convene  by mid-August to consider whether the city should pursue such tactics.

 

“This is something that’s starting to percolate in all major cities around  the country,” said Mr. Burke, the powerful chair of the council’s Committee on  Finance. “I’d like Chicago to be the first if it’s beneficial.”

 

Mr. Burke and Ald. Carrie Austin (34th) introduced a resolution at the City  Council meeting last week calling for a hearing on the matter. A spokeswoman for  Mayor Rahm Emanuel said the mayor’s office is reviewing the resolution.

 

Finance groups oppose the use of eminent domain powers to seize mortgages,  arguing that they don’t pass constitutional muster and will scare off lenders  from communities that adopt such tactics.

 

“I think what the discussion will find is this would be a bad policy outcome  for the city of Chicago,” said Thomas Deutsch, executive director of the New  York-based American Securitization Forum, a trade group.

 

Mortgage Resolution Partners LLC, the San Francisco-based firm pushing the  idea, has had “conversations with people in the state of Illinois about the  potential use of this technique,” said Steven Gluckstern, the company’s  chairman. He declined to discuss specifics.

 

“When you have underwater mortgages, no amount of modification is going to  fix that problem,” Mr. Gluckstern said. “The way to fix that problem is  principal reduction.”

 

The firm is targeting underwater loans that have been packaged into  mortgage-backed securities but are not guaranteed by the federally backed  housing agencies Fannie Mae or Freddie Mac.

 

More  than 503,000 residential properties in Cook County with mortgages  were underwater in the first quarter, representing nearly 33 percent of all  homes with mortgages, according to a recent report from research firm  CoreLogic.

 

Using eminent domain to seize mortgages “would help refinance some of the  most difficult loans that are subject to legal restrictions that make principal  reductions difficult or impossible,” said Thomas Feltner, vice president at the  Woodstock Institute, a Chicago-based non-profit that focuses on lending  issues.

 

He added that the mere possibility of the city using its eminent domain  powers could nudge lenders into making principal reductions.

 

“It’s a new idea and I think we don’t know a lot about it,” said Cook County  Commissioner Bridget Gainer (10th), who has focused on foreclosure-related  issues during her time on the county board.

 

But Ms. Gainer said the debate is worth having.

 

“You need to be willing to challenge assumptions to get an answer to a  problem that has been intractable,” she said.

 

The Illinois Mortgage Bankers Association, however, is all but certain to  oppose a measure that would allow the city to use eminent domain to take over  residential mortgages.

 

“I can’t see anyone on our board supporting this,” said James Trausch, the  group’s general counsel. Mortgage lenders won’t underwrite debt if “your  mortgage is subject to some outside agency determining what its value  is.”

Read more: http://www.chicagorealestatedaily.com/article/20120730/CRED03/120739989/alderman-wants-to-explore-fighting-foreclosures-with-eminent-domain#ixzz22J6jneL2 Stay up-to-date on Chicago real estate with our free, daily e-newsletter

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HELP FOR HOMEOWNERS IS COMING TO ROSEMONT ON APRIL 23, 2012

 

A Main Event is coming to Illinois on Monday April 23, 2012. This Event is being co-sponsored by Department of Housing and Urban Development (HUD) and the Department of the Treasury. The event is divided into two (2) parts.  Morning Sessions are devoted to working with Realtors and giving them SHORT SALE Training but the afternoon event will be devoted to working directly with Homeowners who are struggling to make their mortgage payments and want a opportunity to meet face to face with their lenders. I encourage all homeowners to make this event because it is free and you do not want to miss out on a opportunity to solve your problem. You can meet with a HUD counselor to discuss the Home Affordable Refinance Alternatives (HARP) , Home Affordable Mortgage Alternative (HAMP), Short Sale, Deed in Lieu of Foreclosure.

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FREE MONEY TO AID IL HOMEOWNERS

imagesCAPJT3U4 Illinois is receiving $345 million in Federal Funds to assist struggling homeonwers who are either unemployed or underemployed and not able to pay their mortgage.

Eligibility to the program is expected to help up to 15,000 families who have been rejected by other assistance programs.

Illinois residents whose income has fallen  at least 25% or are currently unemployed can seek up to $25,000 in mortgage help.

The purpose of the program is to give temporary relief to homeowners who have fallen behind in their mortgage payments. 

Program Highlights:

  • For Illinois residents whose incomes have fallen 25% or are temporarily unemployed.
  • Provides up to a maximum of $25,000 to bring delinquent loans current and keep them current for up to 18 months.
  • This loan is for 10 years and may be forgiven if homeowner meets all program criteria.
  • Homeowner must participate in making payments of 31% of income toward their mortgage.
  • If unemployed the program will pay 100% of the mortgage until homeowner gets a job.

For more details on this program please contact your local Illinois Housing Development (HUD or CEDA) offices. The program is a FREE PROGRAM. http://www.ihda.org/

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Chicago Tops List in Number of Foreclosures

Chicago Has Most Foreclosed Homes Of Any City In Americafrom The Full Feed from HuffingtonPost.com by The Huffington Post News EditorsAlthough it never shared the notoriety of Miami, Los Angeles and Phoenix during America’s foreclosure crisis, the Chicago area now has the nation’s largest inventory of foreclosed homes because it is harder to unload troubled properties here than in most other metropolitan areas. The inventory data compiled by RealtyTrac, a California company that tracks housing sales, place Chicago first among the country’s 20 largest metropolitan areas. Real estate experts attribute the high concentration of foreclosures to numerous factors including the strong protections built into Illinois law to protect borrowers, the impact of the “robo-signing” investigation by the Illinois Attorney General, and the reluctance of banks to dump properties at prices far below the value of mortgage loans on their books.

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Case Shiller Report on Real Estate in Chicago Reported by Francine Knowles

Home prices in the Chicago metropolitan area set a new low since prices peaked in 2006, falling 2.2 percent in November from October and 7.6 percent over the year.

 

That is according to the latest Standard & Poor’s/Case-Shiller Home Price index, which showed prices weakening across the country and also setting new post-peak lows in eight other cities.

 

The annual decline in the Chicago area was the second biggest among 20 major metropolitan areas, trailing only Atlanta, which posted a 7.9 percent decline. But the drop in the Chicago area was an improvement from the 8.5 percent annual drop reported in November 2009.

 

The index for the Chicago area stood at 119.57 in November 2010, falling below the 119.71 level of last March, which had been the low for the year, and marking the lowest point since April 2002, when it stood at 118.97.

 

The 10-city composite fell 0.8 percent over the month and slid 0.4 percent over the year, while the 20-city composite fell 1 percent over the month and dropped 1.6 percent over the year. Home prices fell in 19 of 20 metropolitan areas over the month, excluding San Diego, which reported a 0.1 percent gain. Only four metropolitan areas showed gains over the year—Los Angeles, San Diego, San Francisco and Washington, D.C.

 

The eight other metropolitan areas that set new lows since home prices peaked in 2006 and 2007 are Detroit, Las Vegas, Miami, Tampa, Atlanta, Charlotte, Portland and Seattle.

 

“With these numbers, more analysts will be calling for a double-dip in home prices,” David Blitzer, chairman of the Index Committee at S&P said in a statement. “Certainly nine cities setting new lows and with the only positive news concentrated in southern California and Washington, D.C., the data point to weakness in home prices.”

 

 Thirteen of the metropolitan areas and both composites have posted at least seven months of decline since the beginning of 2010. The Chicago area has posted five months of decline since then. As of November, average home prices across the country are back to the levels they were in the latter half of 2003. Since June and July 2006, the 10-city and 20-city composites are down 30.3 percent.

 

Home prices in the Chicago metropolitan area set a new low since prices peaked in 2006, falling 2.2 percent in November from October and 7.6 percent over the year.

That is according to the latest Standard & Poor’s/Case-Shiller Home Price index, which showed prices weakening across the country and also setting new post-peak lows in eight other cities.

The annual decline in the Chicago area was the second biggest among 20 major metropolitan areas, trailing only Atlanta, which posted a 7.9 percent decline. But the drop in the Chicago area was an improvement from the 8.5 percent annual drop reported in November 2009.

The index for the Chicago area stood at 119.57 in November 2010, falling below the 119.71 level of last March, which had been the low for the year, and marking the lowest point since April 2002, when it stood at 118.97.

The 10-city composite fell 0.8 percent over the month and slid 0.4 percent over the year, while the 20-city composite fell 1 percent over the month and dropped 1.6 percent over the year. Home prices fell in 19 of 20 metropolitan areas over the month, excluding San Diego, which reported a 0.1 percent gain. Only four metropolitan areas showed gains over the year—Los Angeles, San Diego, San Francisco and Washington, D.C.

The eight other metropolitan areas that set new lows since home prices peaked in 2006 and 2007 are Detroit, Las Vegas, Miami, Tampa, Atlanta, Charlotte, Portland and Seattle.

“With these numbers, more analysts will be calling for a double-dip in home prices,” David Blitzer, chairman of the Index Committee at S&P said in a statement. “Certainly nine cities setting new lows and with the only positive news concentrated in southern California and Washington, D.C., the data point to weakness in home prices.”

 

Thirteen of the metropolitan areas and both composites have posted at least seven months of decline since the beginning of 2010. The Chicago area has posted five months of decline since then. As of November, average home prices across the country are back to the levels they were in the latter half of 2003. Since June and July 2006, the 10-city and 20-city composites are down 30.3 percent.

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Illinois Association of Realtors News Brief

Suspension of Foreclosure Activity
As you may have read in recent news reports or heard at the recent Legal Update at the IAR Convention, several banks/servicers have suspended foreclosure activities including GMAC, JPMorgan Chase and Bank of America. The Illinois Attorney General’s Office has issued letters to JPMorgan Chase and Ally/GMAC demanding meetings to address concerns that the companies have violated the state’s Consumer Fraud Act and reports about the accuracy of documents filed in foreclosure lawsuits. The Illinois Department of Financial and Professional Regulation also issued a statement.

According to IAR Chief Legal Counsel Steve Bochenek: “This moratorium will impact clients in different ways. A seller client will have a little more time to sell a house where the mortgage is in default. In addition, if the suspension lasts for long then the lenders/servicers might have some incentive to agree to a short sale. Buyer clients that may be in the process of purchasing REO properties will not be able to close until the suspension is lifted and so there may be some delay in closing a transaction, although we do not know how long. Also, buyer clients need to be advised to obtain title insurance to insure title to REO property they are purchasing. Clients that have rented properties that were then foreclosed on will have some additional time before they may be evicted. The key is that if any client of a brokerage company has a question as to how this suspension impacts them they need to talk to an attorney or call the Illinois Attorney General’s office.” The Attorney General’s Homeowners’ Referral Helpline is 1-866-544-7151.

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Channel 5 News Report on Chase Bank

UNDERWATER HOMEOWNERS CALL ABANDONMENT BY MORTGAGE COMPANY
By Lisa Parker

More than 700 days after putting up for sale the home they owned for three decades, a Glen Ellyn couple says they’d received multiple offers on the home, but couldn’t get any answers from their mortgage company.

Gus and Fran Trantham owed more on their home than its market value, so they were a “short sale,” industry lingo for selling a home for less than is owed.  Bank approval is needed for this type of transaction, as the loss is shouldered or shared by the mortgage holder.

But the two year struggle put the couple on the verge of bankruptcy.

“I never dreamed I would have a house this beautiful,” Fran Trantham said of the custom-built, 4,000 square foot home she and Gus built.

They now rent a condo in Woodridge, not far from the home they say they have been trying to sell for so long, and they blame JPMorganChase for failing to offer them any assistance in their efforts to avoid foreclosure and complete a short sale.

“We had a house we thought was worth the money to carry us through,” Gus Trantham said, questioning why Chase ignored three contract offers the couple received on the home. “They are obviously making so much money… two-and-a-quarter billion in a quarter.  They are not looking down at the bottom of the feeding scale to the houses of Americans.”

The team of professionals working with the Tranthams say they were also at a loss to explain why Chase wouldn’t even answer the potential buyers’ offers.

ReMax agent Joel Adams said he and his clients never got any answers when they submitted the first three contract offers.

“Never one. Nope, not one. They never responded in any formal way. Never,” he said.

The Tranthams’ agents said it’s a lose-lose proposition and a problem that is not unique to Chase: the bank never answers and the prospective buyers almost always walk away.

“If you can imagine being a buyer, thinking you are going to buy a house and waiting four or five months for an answer, you have to go out and buy another house,” said ReMax Suburban Vice President James R. Nelson.

To try to save the deal, their lawyer Joseph Horwitz said he took a more direct route.

“It’s unbelievable, to put it mildly,” Horwitz said.  “We wrote letters begging for an answer and it never came. So the date came and went and those people finally left.”

Meanwhile, the couple said the price of their home, along with the market, kept dropping.

With so many homeowners in the same boat — owing more than their home is worth — the Obama Administration recently offered incentives to get banks to complete more short sales.  But is anyone keeping track on whether the banks are actually doing that?

After repeated requests for information, a spokesperson for the US Department of Treasury, which oversees foreclosure alternative programs, said the agency is tracking the number of short sales completed by banks. But, he said, it is too early for the department to report those numbers.

For its part, Chase also won’t say how many short sales it has completed in recent months, but a spokeswoman said that last year the company was focused on loan modifications and keeping families in their homes.

Spokeswoman Christine Holevas said the company is now turning more attention, and adding more staffing, to short sale transactions.  She said Chase does not keep transcripts of conversation with its customers, but that its internal notes do indicate Chase representatives responded to the early offers on the Trantham home.

She said the notes indicate the offers were too low and that the bank countered.  The Tranthams, their lawyer and their realtor all dispute that. 

Eight days after NBC Chicago’s call to Chase to raise the Tranthams’ questions, their short sale offer was approved.

Gus, 79, Fran, 78, said they had very different plans in mind for their golden years and are hoping for a new beginning.  But say they had to wait for at Chase to say the word.

“It’s just an unbelievable situation. The system isn’t working. This should have been taken care of a year ago,” said Gus Trantham.

Source: http://www.nbcchicago.com/news/business/Chasing-Chase-96513319.html#ixzz0r5RrfJBW

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Fannie Mae and Freddie Mac Shares to Be Pulled Off NYSE

The NYSE plans to delist the shares of Fannie Mae and Freddie Mac.  This means Fannie and Freddie Mac will no longer be traded on the New York Stock Exchange.

 As of June 15, 2009, one share of Fannie Mae stock was selling at .92 cents while Freddie Mac shares were at $1.22.

In September of 2008 the Government took over both Fannie and Freddie when the housing bubble collapsed. So far taxpayers have poured $145 billion dollars into Fannie and Freddie to keep them afloat during the housing crisis and now they are being pulled from the NYSE.

What does this mean to you and I?

Well it means to date there is no confidence in our government running these two agencies and no market to sell these guaranteed mortgage back securities to private investors.

Remember Fannie and Freddie were created by Congress to buy mortgages from banks and then package them into bonds and sell them into the open market as mortgaged backed securities to investors.  When the rating system of these mortgages collapsed and loans started to go into default then the market lost all confidence.

Today 31 million home loans worth $5.5 trillion dollars or half of all mortgages are guaranteed by Fannie and Freddie Mac.

When you see Congress debating over financial reform they are really debating over how to fix Fannie and Freddie as they are crucial to the success or failure of our housing market and banking markets.

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