Sue Fox, @Properties. Direct 773.816.1788
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It’s becoming clear that the government’s Making Home Affordable program is failing to yank most struggling homeowners out of foreclosure. Lenders just aren’t modifying loans quickly enough — or on a permanent basis.
As of the end of November, more than 728,000 modifications were under way nationwide, but almost all were still in the trial period, according to the U.S. Treasury Department. Only 31,382 mortgages — about 4% — had their payments permanently reduced. Some analysts are now predicting we could see as many as four million foreclosures in 2010.
This is dreadful news for millions of families and the communities where they live. There is no question: Foreclosures hurt people, property values, cities, and the broader economic recovery. But for a handful of buyers who are willing to jump in, they also represent an opportunity to buy property they might not have otherwise been able to afford.
This year, I have unlocked the padlocked front doors to dozens, probably hundreds of foreclosed homes. There are boarded-up bungalows and chilly two-flats where the utilities were shut off months ago. Condo buildings whose developer went belly up before selling all the units. Single-family homes with children’s wallpaper still decorating the bedrooms. Half-renovated houses missing stoves and refrigerators and electrical outlets, where some investor started a rehab and then ran out of money. Deserted and now owned by a bank, some of these homes have also been damaged by water or mold.
Most of my buyers wind up passing on these homes. The price may be low, but they often require a lot of work. You need to be handy, or have money saved, or be willing to apply for an FHA 203K loan to rehab the place. But the opportunities are certainly there, and more are coming.
More than 9% of Chicago-area mortgages were 90 days or more delinquent in October, compared with 5% a year ago, according to First American CoreLogic. As mentioned in my previous posts, the foreclosure rate in Illinois doubled in the past year, and more than 8,500 homeowners received default notices last month.
If you are interested in purchasing a foreclosure, please give me a call. I can help you find a property that suits your needs, and I will refer you to capable lenders who can get the deal closed with a minimum of fuss. And if you act soon, you may qualify for a $6,500 or 8,000 home buyer tax credit.
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