The Right Place

Neighborhood foreclosure assistance today

Wed, 30 Jan 2008 05:00:11 -0600

Today is a City of Chicago Borrower outreach day.
3 p.m. to 8 p.m.
Tuley Park Field House, 501 E. 90th Place
Meet with lenders and credit counselors during Borrower Outreach Days and learn how to get your finances back on track and keep your home.

What's available?
Loan work-out sessions with lenders and counseling agencies
Access to free legal assistance on foreclosure issues
Information about mortgage refinance options
Information about the City's financial literacy programs

It's a partnership of the Chicago Department of Housing and Neighborhood Housing Services of Chicago called the HomeOwnership Preservation Initiative (HOPI).

Fed cut a boost for Chicago homebuyers?

Fri, 25 Jan 2008 01:01:01 -0600

How deeply will the cut in the Fed Funds rate impact the real estate market? If you've got good credit and a steady job it could mean a deal, I write in Friday's The Right Place. But if you don't...?

Condo fraud slumlord sentenced

Wed, 23 Jan 2008 05:00:40 -0600

Mohammad "Mike" Taghie Kakvand, whose mortgage schemes ruined 33 buildings in Chicago, was sentenced to nine years in prison yesterday. You can read business reporter Mary Wisniewski's story here.

In honor of his sentencing, we are reprising a Right Place column we wrote last year on condo fraud.

Fed, Bar Association, Harris Bank sponsor home-buying seminars

Sat, 19 Jan 2008 06:31:55 -0600

Money Smart “Home Buying Workshops” and Law at the Library “Buying and Selling a Home” lectures will provide Chicagoans with the information they need to make informed decisions when purchasing or selling their homes. These programs will help people avoid common home buying mistakes and provide information about the home buying process.

Offered by the Federal Reserve Bank of Chicago, Money Smart is a series of financial literacy programs offered to help Chicagoans understand the business of money, gain control of their finances and overall wealth management. Law at the Library is a free monthly lecture series focusing on today’s hot and timely legal topics. Presented by the Chicago Bar Association and the Chicago Public Library, each Law at the Library program features a presentation by an experienced attorney followed by a brief question and answer session.

The subprime wizard defrocked

Fri, 18 Jan 2008 04:50:50 -0600

Toto, this isn’t Kansas. It’s better — this is Chicago.

Today, The Sun-Times Real Estate section interviewed Tracy Cross, Rich Hanson, Kathy Kalnes, Laurence Msall, David Oser, James Shilling and Julia Stasch about Chicago's 2008.

PMI: Chicago home prices show only 3% chance of being lower in 2009

Thu, 17 Jan 2008 17:25:54 -0600

Walnut Creek, Calif.-based mortgage insurer PMI released it's quarterly Risk Index Scores yesterday, and you can read more about how Chicago scored tomorrow in the Sun-Times Real Estate section as part of our 2008 Forecast. Or you can visit the website now.

Chicago scored a "5", which means we are in the category that is at least risk among MSAs of suffering a downturn in our real estate prices by the year 2009.

Is personal recession on the rise?

Sun, 13 Jan 2008 10:39:30 -0600

An old joke goes; A recession is when your neighbor loses his job.
A depression is when you lose your job.

Actually not very funny.

What do you think of this saying? Are you having a recession in your home? How are your neighbors doing?

Shorebank economist: Chicago Recession unlikely

Fri, 11 Jan 2008 06:00:00 -0600

Consumer debt rose $15.4 Billion in November, Bloomberg reports. Federal statistics showed that borrowing rose to $2.51 trillion. The figures suggest Americans are relying more on credit cards and other short-term borrowing to maintain spending after the collapse in subprime lending made bank loans harder to get. Consumer spending accounts for two-thirds of the economy. The Fed report doesn't include borrowing through home-equity loans.

Debt —and recession —is what I discuss Jan. 11 in my column with David Oser, Senior Economist with ShoreBank.

Neighborhood foreclosure assistance today

Thu, 10 Jan 2008 01:00:17 -0600

Today is a City of Chicago Borrower outreach day. Meet with lenders and credit counselors during Borrower Outreach Days and learn how to get your finances back on track and keep your home.

It's a partnership of the Chicago Department of Housing and Neighborhood Housing Services of Chicago called the HomeOwnership Preservation Initiative (HOPI).

Subprime or sub-prime word of the year

Wed, 09 Jan 2008 14:50:52 -0600

The American Dialect Society voted “subprime” the word of the year. Sharing this dubious honor with "subprime" are previous years' Word of the Year winners, such as (2005) truthiness; (2004) red/blue/purple states; (2003) metrosexual; and (2000) chad.

In this, its 18th year of heralding sparkling new entrants into the public lexicon, American Dialecticians said "Subprime is an adjective used to describe a risky or less than ideal loan, mortgage, or investment. Subprime was also winner of a brand-new 2007 category for real estate words, a category which reflects the preoccupation of the press and public for the past year with a deepening mortgage crisis."

The Society also created a NEW CATEGORY: REAL ESTATE/MORTGAGE/LOAN WORDS—
These include :

Exploding ARM An Adjustable Rate Mortgage whose rates soon rise beyond a borrower’s ability
to pay.

Liar’s loan/liar loan Money borrowed from a financial institution under false pretenses,
especially in the form of a “stated income” or “no-doc” loan which can permit a borrower to
exaggerate income. 1

NINJA No Income, No Job or Assets. A poorly documented loan made to a high-risk borrower.
34

Scratch and dent loan A loan or mortgage that has become a risky debt investment, especially
one secured with minimal documentation or made by a borrower who has missed payments.

Midwest homes a tough sell but not the toughest

Tue, 08 Jan 2008 17:25:41 -0600

A new report from the National Association of Realtors found it was tough to sell a home in the Midwest in November but not as tough as in the Northeast. The Realtors report showed pending resales fell in three of four regions. In addition to the Northeast’s 13 percent drop, the pending sales index decreased 4.1 percent in the Midwest and 2.1 percent in the West. The pending sales rose 2.3 percent in the South. The figures are seasonally adjusted.

Nationally, the number of Americans signing contracts to buy previously owned homes fell 2.6 percent in November from October, according to the Realtors’ Pending Home Sales Index.

Illinois 4th in Subprime ARM loans

Fri, 04 Jan 2008 13:34:29 -0600

Almost half of subprime ARM loans are concentrated in a handful of states, which are expected to suffer increasing foreclosures as the loans reset to higher rates. This data is culled from reporting by Noelle Cox at USA Today.

Top states for percentage of nation’s subprime ARMs:
California ... 17.3 percent
Florida ... 12.3 percent
Texas ... 5.7 percent
Illinois ... 4.9 percent
Arizona ... 4.3 percent
Michigan ... 3.6
New York ... 3.5 percent

Source: First American LoanPerformance

Cashing out home equity

Thu, 03 Jan 2008 16:26:29 -0600

We have a story in real estate today about home equity lines of credit.

Last spring, Mark Zandi of Moody's Economy presented this slide in his housing forecast.

"The red line represents the savings rate of homeowners who have taken out home equity lines of credit, so they have cashed out (equity from their homes). You can see that their savings rate has declined sharply and their savings rate is now a whopping negative eight percent," Zandi said.

Who w ould have thought that the savings rate of renters would have ever have appeared "stronger" than that of some homeowners?

Bubble-icious Chicago? Not!

Wed, 02 Jan 2008 14:39:29 -0600

ShoreBank's Ellen Seidman said in an email that the Fed is not proposing, with respect to higher-priced mortgages, to "require lenders to lend based on the borrower's ability to repay at a fully indexed, fully-amortizing rate." Rather, the proposed regulation would establish a rebuttable presumption that failure to underwrite in that manner constitutes a prohibited "pattern or practice" of extending credit "based on the value of consumers' collateral without regard to consumers' repayment ability." Whether the distinction is meaningful in practice will undoubtedly be the subject of comments.

We agree, Ellen. Here's my column quoting Ellen Seidman as it ran Dec. 30.

The free market's housing bubble

Sun, 30 Dec 2007 10:06:26 -0600

Faith in markets has held sway as insurance companies have fended off calls for more government-financed health care, and as banks have engineered webs of finance that have turned houses from mere abodes into assets traded like dot-com stocks.

says the New York Times in an interesting analysis of the role of free markets in the housing bubble The Free Market: A false idol after all