Some Chicago Wrigley Rooftop Owners Facing Foreclosure

Shortly after the dust settled from the recent destruction of the bleachers in Wrigley Field, the second oldest baseball stadium in the majors began to experience even more threats. Some of the stadium’s iconic rooftops are now facing foreclosure. Allegedly owing more than $36 million in back payments of principal, interests and fees, the owners of these famous Sheffield Avenue properties were sued in federal court recently, according to a Chicago Curbed report. Facing foreclosure can be a traumatizing time in the life of anyone. If you or someone you know is facing foreclosure, contact a Hanover Park foreclosure defense attorney today to learn about your rights and obligations under the law.

Market Slowly Improving

According to a study conducted by Progress Illinois, Chicago’s six-county region reported foreclosure rates that were comparable to pre-recession levels. Foreclosure filings, the first step in the foreclosure process, dropped 38 percent in the first half of 2014 when compared to the previous year. The final step in the foreclosure process, the foreclosure auction, did not see this downward trend.

Numerous cities across the nation, including Chicago, are still suffering neighborhood plight as a result of the backlog of foreclosures on the judicial system’s docket. In 2013, Illinois ranked third in the nation in foreclosure rankings behind Florida and California. Several years after the real estate market bubble burst, approximately 18,000 homes still sit vacant in Chicago. In fact, 18.1 percent of residential homes in the Englewood neighborhood remained unoccupied for more than two years, according to a study conducted by DePaul University’s Institute for Housing Studies.

Banks Still Use Predatory Lending

Lenders and mortgage servicers, who have had a history of questionable business practices in the past, are once again being exposed for unfair lending. Chicago’s own Cook County recently filed suit in federal court, accusing Wells Fargo of predatory lending, according to a Bloomberg report. This legal action is not the first in the nation, as municipalities in Miami and Los Angeles filed similar suits earlier in 2014. Cook County seeks $300 million in money damages as well as a court order demanding the bank stop its predatory lending practices. Most recently, Bank of America reached a multi-million dollar settlement with U.S. regulators regarding allegations of wrongdoing in mortgage lending.

Hanover Park Foreclosure Defense Attorney

If you or someone you know is facing foreclosure, or may be participating in any other type of real estate transaction, contact a Hanover Park foreclosure defense attorney today to find out your rights and obligations during this process. The attorneys at the Law Offices of Gilbert C. Schumm have more than 35 years of legal experience providing guidance. Contact the firm today at (847) 559 – 9109 to schedule your initial consultation.

Buying a Short Sale vs. a Foreclosed Property in Chicagoland

Although the real estate market is improving and, according to housing statistics gathered by the Illinois Association of Realtors, home prices have been increasing steadily since 2012, the sales of homes have not risen, mostly because of tightened credit standards and less available inventory. Nevertheless, the state remains one of the top five states in the nation with the highest foreclosure rates, as well as high rates of short sales. Buyers looking for a deal may be inclined to purchase a foreclosed home, in which the lender has retained possession of the home by way of court action as a result of the owner’s failure to pay the mortgage, or a short sale home, which is a property that is listed for sale at a price lower than what the borrower actually owes in order to avoid the foreclosure process. Before looking for a property, a buyer should first understand the benefits, disadvantages and differences in purchasing a short sale versus a foreclosed home.

Short Sale Homes

Short sale homes are properties that have yet to undergo the foreclosure process and, as such, tend to be in better condition than their foreclosed counterparts. The owner of a short sale home still occupies the property – unless it is rented out to tenants who are still living on the premises – and defects that may exist in a foreclosed home are not present because often the utilities are still connected, the landscaping has been maintained, and the home is still habitable. Just like foreclosures, the price of a short sale is lower than a non-distressed property and the lender selling the home may offer favorable closing options because avoiding the foreclosure process eliminates time, expenses and gets the liability off the bank’s books. Timing, however, is a disadvantage to purchasing a short sale, as they take much longer to close than other types of real estate transactions. That being said, buyers may avail themselves of the federal Home Affordable Foreclosure Alternatives (HAFA) program, which facilitates the lengthy process by streamlining and simplifying the short sale process. Another drawback of a short sale is that every entity that has an interest in the property must agree to the sales price – in other words, if the home has been mortgaged two or three times, all lenders must agree on the terms of the transaction as they have the ability to block the sale.

Foreclosed Homes

According to an article in the Chicago Tribune, approximately 12,671 Illinois homes received a foreclosure filing in the spring of this year. Benefits of purchasing a foreclosed home include a lower purchase price and less closing costs than when buying a non-distressed home. On average foreclosed homes sell for 30 percent less than non-distressed, move-in ready homes. In a foreclosure sale buyers, can often negotiate closing costs and, depending on the financing terms, the home can be rented out or lived in by the property owner. Also, unlike short sales, the time frame to close a foreclosed home can be fairly quick as banks are eager to take the liability off of their books. Disadvantages of buying a foreclosed property include difficulty finding one in an ideal neighborhood as well as the investment and time needed to repair the home. Foreclosed homes are often located in less desirable neighborhoods that are full of abandoned homes and, as such, property values will be low and likely not rise in the immediate future.  Although rare, wealthier neighborhoods may have a handful of foreclosed homes up for sale; if this is the case, buyers must be prepared to outbid any other interested purchasers. Additionally, foreclosed homes are often damaged and may have deficiencies including moldy walls, damaged or missing appliances, destroyed flooring and plumbing or electrical defects, to name a few.  Assistance is available, however, and some buyers may qualify for federal loans to repair a distressed home under the FHA 203k program.

Contact a Chicagoland Real Estate Attorney

The factors to consider when deciding whether or not to purchase a distressed property can be complicated. You don’t have to navigate this alone. Contact an Illinois real estate attorney today if you are considering purchasing or selling a property. The Law Offices of Gilbert C. Schumm has more than 30 years of experience with real estate transactions of all kinds and serves residents in the communities of Mt. Prospect, Schaumburg, Arlington Heights, Rolling Meadows and Roselle. Call (847) 559-9109 today to schedule your initial consultation.

The Impact of Foreclosure on Chicago Area Renters

Thanks to an Illinois law passed last fall by Governor Quinn, tenants residing in an Illinois home that is undergoing foreclosure can have more time to make a move. If you are a renter in Rolling Meadows whose landlord is facing the loss of a home, it is important to know your rights under state law.

How Foreclosure Works

Illinois is one of 22 states that requires judicial foreclosures, which means a lender must go through the state court system and its judicial process in order to foreclose on a property and obtain relief on the debt owed. A lender initiates the proceeding by filing a complaint to foreclose on the property laying out the claims of the suit. The complaint will describe the promissory note, mortgage, default, amount due on the loan, property to be foreclosed, and the defendants, along with whatever interest they hold in the property. The complaint may also seek a deficiency judgment that allows the lender to file a separate suit against the borrower after the foreclosure if the proceeds at the sale do not fully cover the total debt owed. In addition to filing the complaint with the court, the lender will properly and effectively serve the complaint and a summons to appear in court on the defendants. The lender also files a lis pendens in the county records providing notice to the borrower - as well as the public - that a suit is underway relating to the property.

How Illinois Law Protects Renters

In August of 2013, Illinois Governor Pat Quinn signed a new state law protecting renters living in foreclosed properties, Senate Bill 56 (SB 56), requiring those who acquire real estate through the foreclosure process to honor existing leases through the end of their term or provide sufficient notice allowing the tenants to find new living accommodations. In particular, in a foreclosure a landlord may terminate a bona fide lease that was in effect prior to the sale only if: 1) in the case of a month-to-month or week-to-week lease, with no less than 90 days’ written notice; or 2) at the end of the term of the lease, with no less than 90 days’ written notice. If the buyer intends for the home to be the primary residence, then the lease can be terminated with 90 days’ written notice and the new owner is not required to honor the lease through the end of the term.

A bona fide lease is a residential lease that includes all of the following elements:

1.         The borrower is not the tenant under the lease, nor is the borrower’s child, spouse or parent the tenant. If the child, spouse or parent of the borrower is a tenant, it may be proven by a preponderance of the evidence that a bona fide lease exists;

2.         The rental amount stipulated in the lease is not substantially lower than the fair market value of comparable rentals or it is reduced because of local, state or federal subsidies;

3.         The lease was entered into before the date of the lis pendens, or after the date of lis pendens but before the date of the judicial sale of foreclosure and the lease term is for one year or less;

4.         The lease was the result of an arms-length transaction, which means there was no special relationship between the parties and the agreement was made freely and independently.

Law Offices of Gilbert C. Schumm

If you are considering purchasing a home that is in foreclosure or are renting a home facing foreclosure proceedings, contact an Illinois foreclosure attorney today to learn about your rights and obligations. Don’t navigate this complex process alone. With over 35 years of experience fighting for clients’ rights, the Law Offices of Gilbert C. Schumm can provide real estate advice, and serves the Chicago area including Rolling Meadows, Des Plaines, and Streamwood.