Category ArchiveChicago Mortgage
September 7, 2010 - Back in March the Federal Housing Administration publicised a new program aimed at homeowners who have underwater homes. When a homeowner owes more on his or her Chicago condo or home than it is currently worth, that is called being underwater or having an upside down mortgage. Data from housing market analysts and teh Federal Housing Administration puts the number of U.S. single-family homes and condos that are underwater at about 11 million.
This new program may have been advertised this past spring, but just started this week. Under the guidelines of this new effort to stem foreclosures, the FHA will approve lenders and mortgage companies to refinance home loans as long as the lender will subtract or forgive a minimum of 10% of the original loan amount.
Knocking down the principal of the loan will help borrowers to pay it off sooner as well as decrease the amount of interest accumulated. In the long run it also helps lenders because it gives the borrowers a better chance of paying off close to the full loan amount. Banks generally get much less of a return on foreclosures or short sales.
While this new program may not help to thin out the high number of Chicago condos for sale, it may help some homeowners who are possibly facing foreclosure because they can’t refinance their Chicago mortgages.
May 7, 2010 - Even though right now just about the only way you can get a mortgage with a low down payment is if it is backed by FHA. A rapidly increasing number of buyers, especially first-time buyers, count on the 3.5% down payment that an FHA backed loan can have. There have been the rare occasions when a buyer could find another private lender offering a down payment of less than 5%, but those days may soon be over.
According to a report in the Wall Street Journal, some members of Congress are pushing to pass a law mandating that all private lenders require at least a 5% down payment from borrowers. The FHA and any other government agancy would be exempt from this new law if it passes.
The article also went on to state that the National Association of Realtors isn’t in favor of this proposed legislation. The NAR claims that around 11% of all home buyers as well as about 18% of all first-time home buyers locked in down payments that were 5% or less this past year and that passing this law could potentially knock some buyers out of the market.
FHA loans have certainly enabled many buyers to own a Chicago condo, but giving only that agency the right to offer the lowest down payments could hurt sales of Chicago real estate in the long run.
December 1, 2009 - It was only a week or so ago that we told you about Aqua having trouble with getting Fannie Mae approval for condo mortgages. The issue stemmed from the ratio of commercial versus residential space in this Chicago real estate development. It seems the percentage tips too much towards commercial with the hotel space, albeit unoccupied, and the 474 apartments, with 313 of those already rented. The 264 condos in Aqua are practically all sold out, but the equation doesn’t sit well with Fannie Mae.
To solve the problem at least temporarily, Magellan Development Group has announced that they have found a couple of lenders who will step up and provide nearly full financing for condo buyers. Magellan stated that letters with details about those lenders were sent to the buyers who have purchased through floor 69. Evidentially that is the highest floor currently ready for closings and occupancy at the moment.
Those two financial institutions are Harris Bank and MB Financial Bank. MB has been involved in special rate mortgages in other developments such as SoNo.
If no lenders were found would were willing to offer 90% or more financing, it could have possibly delayed some buyers from closing or completely prevented some sales from going through. With so much pricing competition among Condos In Chicago, developers need to make the most of every opportunity to make a sale and also to close it.