Here in Chicago we hit 60 degrees this weekend. I noticed everyone out and about, walking dogs, walking kids, wearing shorts, etc.  So I guess spring is here.

Then I noticed the trees.  Still all bare.  Not any sign of buds yet.  It was as if the buds were still afraid to pop out for fear that we’d get another blustery snowstorm. I don’t blame them.  I am nervous about that too.

But that got me thinking about my industry.  Though it seems that more people are out looking at properties, my sense is everyone is still nervous. From talking to new clients as well as real estate agents, most people have heard about the mortgage industry situation, and even after having been fully pre-approved, they still don’t feel anxiety-free.  They know about the month-to-month (or, even more accurate, day-to-day) program changes, and so they have to be wondering, “I am fully pre-approved today.  But what about in 30 days when I find a property?”  Good question.

My suggestions:

1. Be sure to work with a reputable and knowledgeable loan officer.
2. If you call a loan officer, and he/she doesn’t call back, you can be sure that you won’t get a call back when programs change.
3. Be proactive and ask your loan officer a lot of questions. Like: “How will I know if the program for which you are preapproving me will be around?” and see how they respond.
4. Does your loan officer explain the state of the industry or just say everything is great, please sign here?

It’s important to feel safe and secure.  Though no one can guarantee every loan, the conventional programs should be solid.  If you are going to do any out-of-the-box loan, be careful.  It could be very very cold out there still.

We were discussing the hot topic of the day, month, and year:  the state of the mortgage industry. We eventually got around to the various ways to fix the problems. We all know that the government would get involved, for better or worse. Here in Illinois, for example, the state government passed Public Act 095-0691, and the federal government has passed the Stimulus bill which includes sections about mortgage reform as well as mortgage “fixes.”

The Illinois law would effectively either slow the mortgage process (for someone buying a home) or even possibly stop loans.  Those (in the government) who would be reviewing a loan application would not be consciously or intentionally stop the loan, but the review and time to get the review done might (and this is the key word:  might) cause 1. sellers to find another buyer, or 2. discourage good buyers from moving forward. And thus everyone loses: buyer and seller, seller and buyer realtors, attorneys, loan officers, the city, the state…..

So…what is the point of these laws?  There are many, and it’s complicated. So the realtor and I came to this point and he said, “Well, isn’t it (the law) for us to pause?”

Hmm…let me take a second to think about this………..

The one positive outcome of all the reforms, bills, and laws, for now and just before the borrower signs the application documents, is to take a moment, pause, and think. Is this the right loan program? Will this leave me financially stable and in a position to pay my bills? If something happens for the worse, am I ok?

Hmm…some things to think about?  Thanks Zeke.

So what does the Chicago City Counsil do? Increase the tax stamp, to the buyer, for buying a home!

What used to be $7.50 per $1,000 just increased to $10.50 per $1,000.

So a home that costs $300,000 currently carries a tax of $2,250, will have a cost of $3,150.  And this becomes effective for purchases, in the city of Chicago, after April 1.

Besides knowing about the additional costs, borrowers should pay attention to a few things:

1. Does the Good Faith Estimate disclose the costs?
2. When a loan officer meets with a borrower and analyzes the borrower’s qualifications for a loan, does the loan officer take into consideration the new costs?
3. Think about asking the seller to help pay for the costs.

Whether we like it or not, the increase is here.

In any event, I am very excited to announce that I have moved to a mortgage bank here in Chicago. I am now at Professional Mortgage Partners.

A fabulous mortgage bank that offers both clients and loan officers a full range of programs with great support. We lend  in most states and can get loans done very quickly. Still….I want to spend time with all of my clients and make sure they are comfortable with the decisions that they make.

I look forward to this change. See, that was easy.

Thank you Leslie. Hope it helps.

Epidemic: widely prevalent 

So this is what we are dealing with. Something that is happening everywhere.

If you have read the introduction to my series on the foreclosure epidemic that was described in the Chicago Tribune, you know that Becky Yerak described the spread of foreclosures as an epidemic. 

So, yes, the basic definition is widespread and prevalent, but of course it also has the connotations of the spread of infection and disease.

I think both meanings are appropriate.

For those who have gone through the pain of a foreclosed home, the emotional disease metaphor rings true. Not only does the problem spread but also the affects hurt everyone equally.  Pain, suffering, tragedy.

My next post will suggest why this end tragedy starts with the common dream that we (Americans) follow, many times, without thought and reason.

Last week Becky Yerak, writing a front page article about the foreclosure problems in Chicago, titled her article with a chilling description:  

HOME LOSS EPIDEMIC SPREADING

Epidemic.

It’s spreading. It’s happening to more homeowners. More heartache. More pain. Spreading. Getting worse.

How could this happen?  A lot of finger pointing. Yet few people assuming responsibility. Many confusing and detailed reasons.

But an epidemic?  With all the questions, and all the excuses, and all the fear and turmoil, no one seems to have answers. 

The Tribune article has me thinking, and so I am going to write a series of posts about this epidemic that, I hope, will help illuminate some of the more unexplained and unexamined reasons. The series will use worst-case scenarios in which a perfect storm-like series of events has produced our situation. Most homeowners do not experience this situation, and this is something that I want to point out up front.

This is obviously an important topic. Please share your thoughts and responses.