Foreclosures and late Illinois mortgage payments are hitting high marks in Will County and across the country.
In Will County, foreclosures in 2006 reached 3,226, the highest in at least four years and a 30 percent jump from the number of foreclosures in 2005, according to information from the Recorder of Deeds office.
The Mortgage Bankers Association said Tuesday that the number of late mortgage payments nationwide hit a 3½-year high of 4.97 percent in the final quarter of 2006. Also, the percentage of mortgages going into the foreclosure process reached a record high of 0.54 percent.
In Will County, the number of households in foreclosure in January was one in every 311, according to RealtyTrac, an Irvine, Calif.-based company that monitors foreclosures. The county had the highest foreclosure rate in the Chicago housing market for most of 2006 and again in January.
The rising foreclosure rates have been fueled by subprime loans that pumped up the real estate market in recent years, making mortgages available to borrowers with high credit risks.
“A lot of these programs, quite honestly, instead of helping people have really hurt them,” said Tom Mulvey, vice president at Dow Mortgage, a Joliet company that does not deal in subprime loans.
Mulvey predicted the number of foreclosures would keep rising.
In January, Will County home loans reached 363, the highest number in at least 13 months, according to the Recorder of Deeds office.
RealtyTrac’s report on January foreclosures showed Grundy County with a rate of one for every 519 households and Kendall County with a rate of one for every 476 households. While those rates were better than in Will County, they still were much higher than the national average of one for every 886 households.
All Chicago-area counties had higher foreclosure rates than the national average, and only DeKalb and DuPage counties had better rates than the Illinois average of one for every 637 households, according to RealtyTrac.
Doug Duncan, chief economist for the Mortgage Bankers Association, suggested that homeowners having difficulties making payments contact a home loan lender as soon as possible.
“It is in everyone’s interest to keep the homeowner in their home paying their bills on time,” Duncan said.
SOURCE: The Herald News
Posted by Jed Moss on Mar 16 2007 under Illinois
It’s a wild Chicago housing market these days.
Just ask real estate broker Crystal Nells, who put three Chicago apartment buildings on the market last year. Months later, only two were sold.
“This one just wasn’t going anywhere,” said Nells.
So what did she do? List the property on eBay, where she previously had sold books.
“I’ve gotten e-mails from all over the U.S. about it and a lot of people right here in Illinois that for some reason weren’t seeing it before.”
Nells is one of a growing number of sellers turning to online real estate auctions in the midst of a slow Illinois housing market. In addition to e-Bay, other online businesses are attempting to hit on the trend.
“We’ve almost doubled our business in the last six months,” said Tony Isbell, CEO of Rainbow City, Ala.-based RealtyBid International LLC.
He said a majority of the company’s sales are concentrated in the Midwest and Southeast. RealtyBid.com lists commercial real estate and timeshare properties, but Isbell said 99 percent of business is selling residential properties.
The company sells mostly bank-owned homes or foreclosures.
A report commissioned by the National Auctioneers Association shows that real estate is by far the fastest-growing sector of the auction industry, expanding almost 13 percent in 2006.
“It’s been within the last year that they’ve been selling real estate online successfully,” said Bill Sheridan, president of the association. “Our online technology is much better than it was five years ago and the consumer is more conditioned to using online bidding.”
While eBay has popularized online auctions, especially in this climate of slugging Illinois mortgage demand, real estate in general has been slow to develop as an auction-worthy commodity.
A few years ago, “the public wasn’t ready for it yet,” said Rick Levin of Chicago-based real estate auction company Rick Levin & Associates Inc., who launched online real estate auction site bid4real.com in 2000.
“People still have some trepidation about bidding for their largest asset on the Internet,” he said. “People want to see the property before hand, smell the smells, feel the walls.”
Isbell said buyers and sellers in online real estate auctions are the same as those in a live auction, including real estate investors as well as first-time mortgage loan applicants.
“The difference is that it’s a lot more convenient for the bidder with the online process,” said Isbell. ”You can bid anywhere, anytime.”
Companies auctioning more expensive real estate find consumers prefer to bid in person - especially if the would-be buyer plans on living there, rather than simply investing in real estate.
“We use the Internet a lot, but we don’t use it in the bidding function,” said Steven Good, CEO of Chicago-based real estate auction firm Sheldon Good & Co. LLC, who uses online auctions less than 5 percent of the time.
“Before someone’s making a half-million dollar or above buying decision, they understandably want to see the individuals involved and become comfortable with the transaction.”
SOURCE: Chicago Daily Herald
Three Chicago businesses promised to save more than 12 struggling homeowners since 2003, then proceded to scam them out of tens of thousands of dollars in hard-earned home equity.
That’s the charge levied by state Atty. Gen. Lisa Madigan, who announced the state is filing a lawsuit as of yesterday against the individuals responsible for this Illinois mortgage scheme.
The firms - Eyes Have Not Seen Inc.; Creative Financial Solutions; and Mutual Trust Funding, formerly known as Greater Investment Solutions - lured victims by offering to help make mortgage payments, according to the suit, which was filed in Cook County Circuit Court.
The companies then ran a scam that involved persuading the homeowners to put their home mortgages in someone else’s name, the lawsuit alleges.
In 13 complaints filed with Madigan’s office, homeowners said they lost from $28,000 to $85,000 at the closings arranged by the defendants.
“Mortgage-rescue-fraud artists, like these defendants, take advantage of homeowners who are in financial distress,” Madigan said in a statement.
Also named as defendants in the lawsuit are Charles T. White Jr., president of Eyes Have Not Seen; and Debra Gray and Darius K. Monroe, who are identified as agents of the firm.
None of the mortgage company officials could be reached on Wednesday.
The lawsuit seeks to force the defendants to repay the homeowners and pay fines of up to $50,000 for each violation. Hopefully, this new, statewide crackdown on mortgage fraud will continue and serve as an example for the rest of the U.S.
SOURCE: Chicago Tribune
Low mortgage interest rates have kept buyers in the market despite the extreme winter weather in January, a typically slow month for the Illinois housing market.
According to the Illinois Association of Realtors latest report, total home sales (which include single-family and condominiums) were down over 8% in January 2007 to 8,584 homes sold, compared to 9,206 homes sold in January 2006.
The median Illinois home price in the month remained unchanged from a year earlier, standing at $200,000.
“The current economy provides a strong base for the housing market to recover this year with growth in GDP, employment and income, and [home loan rates] that are low by historical standards,” said Robert Zoretich, president of the Illinois Association of Realtors. “As the year goes on, home sales should steadily improve. Realtors anticipate that the housing market will continue in this transitional phase during the remaining winter months and pick up as spring approaches.”
The monthly average commitment rate for a 30-year, fixed-rate mortgage for the North Central region was 6.29% in January 2007, up 0.09 points from the 6.20 average rate during the previous month, according to the Federal Home Loan Mortgage Corporation. Last year in January it averaged 6.23%.
In the Chicagoland Primary Metropolitan Statistical Area (PMSA), home sales totaled 5,950 in January 2007, down 10.6% from 6,652 home sales in the same month last year. The median home price for the Chicago housing market was $245,000, up 2.1% from $240,000 in January 2006.
“According to economists with the National Association of Realtors, we experienced the worst of the housing sales recession at the end of 2006 but we’re still in an atypical year from inventory levels carrying over to this year,” said Zoretich, broker-owner of Zoretich Realty Group in Chicago. “Fortunately, the housing market in Illinois is not as fragile to fluctuations in market conditions as other parts of the country.”
It’s true. There’s typically strong Illinois mortgage activity in this state. Reduced rates certainly don’t hurt that cause.
SOURCE: RIS Media
Posted by Jed Moss on Feb 28 2007 under Illinois
Larry Bloyd is a frustrated home seller.
For nearly five months, the Normal, Ill., man has waited patiently for his home to sell. The three-bedroom house has been stuck on the market since last fall, far longer than the two months it took to sell his last home.
That was seven years ago, of course.
“After this long, I have no clue,” Bloyd told the Bloomington-Normal Pantagraph. “I’m sure we’re not the only ones in this predicament either.”
Meanwhile, Philip Blaxton is a hopeful home buyer.
The Bloomington man and his wife have been house-hunting in the Twin Cities for about two months. They’re excited about the prospect of a good deal in the Central Illinois market and patient enough to wait for the right house at the right price.
“I’ve noticed the prices going down. We’ve been watching a few specific houses, and [Illinois home prices] have been slowly dropping,” Blaxton said.
“A lot of the houses we’ve been looking at have been on the market for more than a little bit of time.”
Local real estate agents have repeatedly said Bloomington-Normal has a strong housing market, offering low Illinois mortgage costs and a high quality of life for the money.
Whether residents agree clearly depends on whether they’re trying to buy or sell. But that’s the case with any housing market, wherever you might live.
The 2,918 homes sold around the Twin Cities in 2006 marked the second-highest total since 1995, noteworthy given the national slump in mortgage activity and in the housing industry.
But it took 10 percent longer to sell some properties in Bloomington-Normal than it did just a year earlier. And hundreds more homes that had been on the market for months didn’t sell by year’s end.
“It’s definitely a buyer’s market,” Bloyd said. “We’ve dropped our price.”
In the Twin Cities, an existing home was on the market for an average of 83 days in 2006, according to the Bloomington-Normal Association of Realtors.
That’s a week longer than the average of 76 days on the market that resale (existing, rather than new construction) properties took to sell in 2005.
Statistics that separate homes and condos in the Bloomington-Normal area and the surrounding towns are not available, but, in total, 771 existing homes remained for sale at the end of 2006 for an average of 132 days.
That’s more than 4½ months. It’s the same average as the end of 2005, when home mortgage loan activity was stronger, but there were 44 more homes.
Sellers’ struggles in the Twin Cities reflect issues that have been seen throughout the United States. Home buyers across the U.S. have held the advantage for much of the past year as the number of homes for sale has started to outnumber the shoppers. Homes have remained up for sale for longer and at the same time, home prices have dropped.
Follow the link to continue reading this article from the Bloomington Pantagraph …
Posted by Richard Barber on Feb 27 2007 under Illinois
Today’s Chicago Sun-Times tells the story of a Spanish-speaking home mortgage broker who offered what seemed like a great deal to Des Plaines, Ill., homeowner Jose Cortez.
Cortez was told he could pay off his credit cards and car loan through simple mortgage refinancing on his home.
What the mortgage broker declined to mention was that Cortez would owe $17,000 in closing costs.
And, contrary to what he was promised, Cortez’s new payments don’t include property taxes and insurance.
Spanish speakers, seniors and other vulnerable homeowners often don’t spot astronomical fees and other ripoffs buried in the fine print by predatory mortgage lenders and brokers, consumer advocates say.
Another scam is to offer an initial monthly payment that doesn’t even cover the interest. Homeowners wind up owing more on their house each month - a phenomenon known as negative amortization.
Retired office worker Delores King said she now owes thousands of dollars more on her South Side home than when she refinanced in 2004. Her monthly payments nearly doubled after the 1.5 percent “teaser rate” expired.
“I’m going to lose my house if something doesn’t give,” King said at a news conference Sunday called by U.S. Rep. Luis Gutierrez.
Gutierrez is introducing a bill that would require brokers to disclose - in writing - all fees and penalties associated with Illinois mortgage loans.
If found in violation of the bill, predatory mortgage brokers would be liable for homeowners’ losses, plus legal fees and other damages.
A similar bill died in committee last session, but Gutierrez is much more confident now that Democrats control the U.S. House of Representatives.
Gutierrez’s bill is one of several pending right now in Congress. But the National Association of Mortgage Brokers says new regulation could restrict loan options for consumers.
The mortgage broker association instead proposes criminal background checks for brokers and better education for consumers.
SOURCE: Chicago Sun-Times
Housing analyst David Seiders told Chicago housing market builders Thursday that the federal estimate of 3.5 million homes for sale at the end of 2006 is “grossly understated.”
“There is a big inventory overhang out there, and it’s bigger than anybody understands,” he said.
In an annual forecast on the local industry in Addison, Seiders, chief economist of the National Association of Home Builders, cited the high level of sales contract cancellations in 2006. It created a snag in the recordkeeping, so many homes marked as sales in government data ended up back on the market too late to be counted as inventory.
“Cancellation rates more than doubled between the end of 2005 and the end of 2006, meaning that net sales for the year nationally may be down 65 percent.”
But Seiders was not all gloom, saying the market is probably at the year’s low spot right now. He expects slight improvement at midyear regarding Illinois mortgage demand.
Nevertheless, he predicted the Chicago region’s 2007 housing starts to be down 24 percent from 2006.
The Commerce Department reported last week that housing starts in January had dropped 38 percent from the year before to an annual pace of 1.4 million units, the slowest rate since August 1997.
“If sales activity bottoms now, that’s great news,” Seiders said. “By 2008, we should begin to see healthy increases in home sales.”
Alan Lev, president of Belgravia Group, a Chicago builder and developer, agreed this is a critical juncture.
“January and February and into June, this is supposed to be the time of the year that you’re supposed to make your hay,” he said. “In a normal year, we do 70 percent of our sales between mid-January and mid-June.
Maureen Parotto, director of sales and marketing for Itasca-based William Ryan Homes, also noted a pickup in applicantions for home mortgages. “Last week we had 39 sales - that’s a record for any week we’ve ever had,” she said.
However, the builder was offering buyer incentives up to $60,000 in free features and upgrades.
Analysts note that such widespread discounting and incentives have kept a bad spell from turning disastrous.
“The common phrase that you hear on buyers’ lips is, `What are you giving away?’” said Buz Hoffman, president of Lakewood Homes in Hoffman Estates.
Hoffman said his firm probably will scale incentives back from last fall’s levels, when Chicago-area builders were trying to entice buyers with price cuts, special mortgage financing deals and such exotic enticements as free college tuition.
Read the rest of this entry »
Posted by Jed Moss on Feb 23 2007 under Illinois
Suburban housing growth continued in various markets in the southwest and northwest as overall soft market conditions in the Chicago housing market persisted through the fourth quarter of 2006.
One of the hottest areas in this sector of the Illinois housing market was what is known as infill housing on scattered sites in many places across the suburbs, according to Tracy Cross & Associates, Inc.
The southwest region easily dominates new growth, with Joliet, Plainfield, Yorkville, Oswego, Aurora, Plano and Shorewood producing seven of the top ten spots in new home orders. The remaining three municipalities included Elgin and Huntley to the northwest and Mundelein in Lake County.
There could be problems, however, in some places in the southwest market. Some home builders, who were not named, are holding back on some projects about to come on line in places like Yorkville and Oswego.
One consultant also noted that demand for affordable housing is pushing growth southwest into Kendall and Grundy counties.
“Kendall County is growing, morphing from farmland into suburbs. Grundy has ample land available for affordable housing. Will County is a popular suburban market with a large supply of affordable housing,” said Steve Hovany, a principal in Strategy Planning Associates.
During the fourth quarter of 2006, the seasonally adjusted annualized rate (SAAR) of new production homes sales totaled 21,783 units. That figure produced a 9.4 percent decline from the 24,051 annualized pace recorded between July and September.
Those numbers reflect a decline in Illinois mortgage demand and included a drop of sales in the suburbs from 17,985 to a yearly pace of 16,588 or a drop of 7.8 percent. That compared to a figure of 14.4 percent for the city of Chicago where the numbers went from 6,066 to 5,195.
The regional SAAR in the single-family sector during the fourth quarter of 2006 equaled 9,088 units, the lowest volume of activity since the first quarter of 1995. In the multi-family home category, the annualized rate dropped to 12,715 units.
In 2006, a total of 25,702 new production single family and town home/condo units - offering more affordable home loan options to buyers - were sold in the ten-county Chicago metro area. Volume was down by 22.8 percent overall with the city dropping by 17 percent and the suburbs by 24.5 percent.
During 2006, with home mortgage costs relatively stable, the median sales price of a new single family home reached $303,957. That figure was an increase of 5.6 percent from the previous 12 months.
Across Illinois, housing starts continued to grow at a modest pace and median sales prices rose at an annual rate of 3.1 percent from $286,764 in 2005 to $295,535 in 2006.
SOURCE: The Business Ledger
Posted by Richard Barber on Feb 22 2007 under Illinois
The Central Illinois housing market remains one of the most affordable regions in the country to buy a home, the Peoria Journal-Star reports.
According to Zillow.com, a Seattle-based online real estate service, the Peoria-Pekin metro area was listed as one of the top five least expensive housing markets in the United States, with a rating of $91,984 for the fourth quarter of 2006.
That figure represents a median home value based on all area homes - not just the ones sold over a particular period of time.
Only the Quad Cities region of Illinois and Iowa registered lower - coming in at $86,201 - in the company’s listing of 76 select U.S. markets.
The San Francisco Bay Area topped the list with a price of $684,459, with the Honolulu housing market ($626,452) and the metropolitan Los Angeles area ($545,409) close behind.
“Right now, two groups of cities are having problems - those that had the most price speculation and areas with weak employment,” according to Mike Larson, a specialist with Weiss Research Inc. in Jupiter, Fla.
States like California, Florida and Nevada, where the cost of housing has so risen dramatically in recent years, are seeing a significant decline in home mortgage demand “after driving home prices out of reach of the average person,” he said.
While there’s no shortage of affordable housing in Central Illinois, Larson said it’s fair for the media to characterize what’s happening in real estate in much of the country as “a housing bust.”
“Almost half (49 percent) of the nation’s top 149 metro areas showed declines in the cost of housing from 2005 to 2006,” he said.
While the Peoria area edged down slightly in the Zillow listing as Illinois mortgage demand waned in 2006, the depreciation was under one-fourth of one percent.
“In this area, I have to ask, ‘What housing bubble?’ Because of the strong local economy, low interest rates and solid job market, I didn’t believe it could burst here,” said Dallas Hancock, CEO of the Peoria Area Association of Realtors.
As for the rest of the nation, Larson foresees another weak year in 2007.
“There are close to a record number of homes on the market. With mortgage rates flat, we could see problems on the credit side of things,” he said.
“You’re now seeing a surge in foreclosures and delinquincies,” said Larson. “If you’re prospective home buyers, you definitely have the upper hand in many markets. The seller has to be more flexible.”
In some places - such as Florida - an overstocked housing market means “you can rent a home for half the monthly cost to buy,” he said.
SOURCE: Peoria Journal-Star
Posted by Richard Barber on Feb 20 2007 under Illinois
The Illinois housing market ended 2006 on a low note, according to Crain’s Chicago Business Journal, and housing experts are forecasting modest gains, if any, for 2007.
Sales of single-family homes and condominiums fell 8.9 percent last year compared to 2005’s pace, according to the Illinois Association of Realtors. Illinois home sales were down 16 percent in the fourth quarter alone.
Across the nation, homes sales fell 10 percent in the fourth quarter.
“We had a year of contraction,” said Pat Callan, treasurer for the Realtors’ association and real estate agent / owner of Realty Executives Premiere in Wheaton. “But I think we’ve seen the worst.”
Illinois was spared the dramatic declines seen in states where homes sold at a blistering pace in 2004 and 2005. Fourth-quarter sales fell between 21.3-36.1 percent in the Arizona housing market, as well as California, Florida and Nevada, according to the Realtors association.
Despite a slower sales pace and high home mortgage loan costs, Illinois home prices have remained fairly stable. The median sale price last year was $203,900, up slightly from $200,900 the year before.
“When you look at the stats, prices didn’t go down,” Callan said. “It was the units.”
With Illinois mortgage rates hovering near historic lows, he’s forecasting a year that will either match, or slightly beat, last year’s pace.
“There are sales in the marketplace and I’ve seen more activity in my office,” he said.
Paul Kasriel, economist for Northern Trust Bank, is less optimistic about the future of Illinois home prices, given the excess supply of new and existing homes.
“Sales are still going to be sluggish,” he said. “It’s going to be another year of recession in housing.”
National housing starts figures issued Friday by the Commerce Department appear to back Kasriel’s sentiment.
Housing starts fell 14.3 percent in January, according to the U.S. Commerce Department’s report - contrary to a recent spike in home builder confidence.
“Builders are abandoning land now and that indicates they are not expecting to start a lot of new homes. Construction is going to continue to weaken,” he said.
SOURCE: Crain’s Chicago Business
Posted by Richard Barber on Feb 18 2007 under Illinois
