Chicago's senior housing

Saw a blurb in the Trib. about Chicago's booming senior housing market. The study was done by the American Seniors Housing Association. Unfortunately you can't read their reports without buying them. It seems Chicago is the number one metropolitan area in senior housing built. It's something to get educated on...I know I'm a bit lacking and I practice a good bit of so-called elder law. There are a myriad of housing options for seniors that simply didn't exist 10 years ago.

Call the RESPA police at...

202-708-0502 or e-mail at: hsg-res-pa@hud.gov. No joke.

I know we've posted on HUD's work regarding the various "schemes" where builders/developers encourage (force) buyers to use their mortgage companies before but I've also seen some pieces lately about the effectiveness of HUD's enforcement division. That's good stuff! The typical facts are builders/developers holding buyers earnest money hostage when the buyer waivers on using builder/developer mortgage and title companies.

Use these regulatory agencies...it's much faster than litigation!

Welcome Chicago real estate bloggers...

Just a quick shout out to a couple new-to-me real estate blogs:

The Chicago Real Estate Local - http://chicagorealestatelocal.blogspot.com/

&

Chicago Real Estate Blog (how original...) http://www.illinoisrealestate.com/blog.html

Both are well-written and regularly updated blogs...take a look. I think both are written by real estate brokers/agents so a little "salesy" for us purists but the more the better I say. I'm adding them to our blog roll for sure.

The Illinois real estate market

Here's a link to the IL Assn. of Realtors release on October housing figures. I don't see a lot of news here...IL median sales prices were off 3.5% from October 2005.

What's the best data to gauge housing market strength? We see the various monthly reports from the different home builder and Realtor associations and I find them of little value. What does the fact that median home prices from year to year changed mean? These figures are comparing a diverse housing product to a different housing product the next year, right? We're not comparing apples to apples. It's a different product.

Well, I've got another...

I get one of these every few months and it's almost laughable (and sad).

It's the do-it-yourself failed eviction client and the subsequently delayed real estate sale. Why do people do this? Forcible Entry and Detainer (eviction) work is not all that straight-forward and I regularly see practicing attorneys screw these up. And further, Defendant's have a fair amount of leverage. Every so often I'll defend someone in an eviction matter and there are a lot of options to beat these cases or to at least delay an eviction for two to three months.

The current person we're dealing with cost himself a real estate sale. Who knows when the next buyer will come along. This isn't a high fee legal area, there are plenty of good lawyers (yours truly included) who do these at a pretty high volume and a flat fee deal.

Fewer FSBO's in '06

We saw this little nugget from the Nat'l Assn. of Realtors:

FEWER FSBO TRANSACTIONS

NEW ORLEANS, La. (NAR) – For-sale-by-owner (FSBO) transactions are fewer than ever, according to a new study from the National Association of Realtors (NAR) released here last week.

The “2006 National Association of Realtors Profile of Home Buyers and Sellers” shows a record low 12 percent of transactions are FSBOs. Market share for do-it-yourself sellers peaked at 20 percent in 1987.

In addition, many FSBO properties are not placed on the open market, according to the report. Forty percent of those transactions are “closely held” between parties who knew each other in advance. That is up from 39 percent in 2005 and 32 percent in 2004.

“When you factor out the properties that were not placed on the open market, the actual number of FSBOs is only 7 percent. The rest are simply unrepresented sellers in private transactions,” said NAR 2006 President Thomas M. Stevens.

I don't claim to have the skill to evaluate any of the research/data methods used to compile the study. But, taking its findings at face value, I wonder the cause of the decrease? My thought would be that the cut-rate brokerages and lowering commissions trend make using a real estate agent a better value than in the past.

Morgage fraud...any correction in sight

Why are we still seeing stories like this here (11/06) regarding Platinum Investment Group when the IL Attorney General supposedly was cracking down on things here 1/06?? I gues the Mortgage Rescue Fraud Prevention Act has an effective date of 1/1/07...hopefully it will do something.

Alternative credit scoring

I read a bit recently about the Nat'l Association of Hispanic Real Estate Professionals putting out a new guide of lenders who use alternative Anthem credit reports and scores as supplements to FICOs. Couldn't find a link on their Website. It's a major issue with the Hispanic market with often persons who are newer to the States and also tend to be debt-averse.

Anthem evaluates whatever information on an applicant may exist in the files of the national credit bureaus and then mixes in information from other sources such as telephone, utility and rent payments (among others). If you're dealing with young adults or the various immigant groups this could be a huge savings! To find a lender that will evaluate credit beyond the major bureas could mean maybe 5% difference in a mortgage rate between the market rate versus having to get a subprime loan.

Commercial real estate overview piece

Here's a nice 10-step overview regarding commercial real estate investing.

Commercial real estate overview piece

Here's a nice 10-step overview regarding commercial real estate investing.

Financing under Islamic Law

This isn't something that comes up every day with me, but I'd certainly file it in the useful information when I need it category. CBA had a presentation the other day by David Loundy with The Devon Bank on the technicalities of financing under Islamic Law.

See their Laws prohibits institutions from charging interest when lending money or to penalize people for failing to repay a loan. How to get around?

1. Murabaha. The customer picks the asset at a stated purchase price. Then the bank purchases the asset and resells it to the customer in an installment sale at a price that reflects an imputed rate of interest.

2. Ijara. The bank purchases the asset into a single purpose subsidiary and then leases the asset to the customer. At the end of the lease, the bank may transfer title to the customer.

A lot of tax questions and deductibility issues remain undecided.

$40 million ad campaign by Realtors

See a piece on the Nat'l Assn. of Realtors $40 million campaign to promote buying/selling real estate...it's a great time to buy or sell a home!!

Coldwell Banker rates college towns

This study by Coldwell Banker has gotten some decent play in the mainstream media...not too substantive and the study's methodolgy seems flawed. It ranks the median value of property in each of the college towns that play Div. 1-A college football.

Beyond the "fluff" of the study, the question of the investment value for a college student who may be spending some 5 to 6 years in a place is legitimate...you can likely get some equity over that period of time. Rent out a bedroom or something too. I suppose there is the practical side of the maturity of the student, weekly beer bashes might impact the quality of the real estate.

12% more if there's a doorman

Here's an interesting piece regarding the value of amenities in condo associations. It's a topic not written about as much as you think. I think I see something once a week regarding single-family home amenities and how they add to re-sale value but I rarely hear about condo association stuff.

Not suprisingly, first impression is listed as the key. Lobby, lobby, lobby was one statement regarding the most important association asset. Also, buildings with doormen sold for 12% more on average. Gyms or work-out facilities were popular too. A good quote from the piece was that rooftop decks/gardens are often very nice but they're empty; the gym's are always full! (I'd like to see the facade on my condo building cleaned-up a bit...first impressions are everything!)

$2.62 TRILLION since '99

A good piece from the Times here about the "cash-out" phenomenum of recent years. Interestingly cash-out financing remained at a record pace this year even in an environment where interest rates have been rising.

Truth in Lending Act primer...

Another good case from the 7th Circuit here that taught me a lot. It's primarily about the federal Truth in Lending Act. Don't ask me for a full explanation, but if you've handled any real estate deals you'll know that the TIL is a general consumer protection for consumers taking out mortgages. One TIL requirement is that a creditor must clearly disclose his right to rescind the loan within 3 days and provide the appropriate form to accomplish this recission.

What you learn from this case is that if the creditor doesn't give the appropriate notice required by TIL, then the period within which the borrower may rescind the loan is extended from three days to up to three years. Interestingly the lender here had included too many rescision forms that the court said made it confusing. It's nice to know something about lending law.

How NOT to represent a Seller

Take a look here for a recent legal malpractice suit against an attorney regarding her representation of the Plaintiff in a real estate transaction. The thumb-nail of the case is that the Plaintiff/Seller had 3 lots but only wanted to sell 2 of them. So, the inital contract only contained the two lots. Defendant/Attorney modifies the contract to include all 3 lots, of course no additional compensation is included NOR does Defendant/Attorney tell Plaintiff/Seller that she did this. It's basic math people! I hate to admonish other lawyers because we all have lapses in Judgment. But this sort of thing is a bit above and beyond...no?

Most suprisingly, the malpractice suit actually lost at the trial level but got reversed on appeal.

$2.2 million in debt

Here's an interesting blog for real estate investors:

http://iamfacingforeclosure.com/

Some of you may have seen this guy...he's a 24-year-old who bought eight homes with zero money down and has $2.2 million in debt. He's facing a number of foreclosure actions.