Foreclosure Alert: 2004 Prices in 2024 S. Wabash in the South Loop

We chattered about this 2-bedroom loft at Ravinia Lofts at 2024 S. Wabash in November 2007. At the time, it was a short sale. It has since been foreclosed and is now back on the market as a bank-owned unit.

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It’s listed for only $20k less than it was as a short sale last fall (if parking is included in the price). Is this wishful thinking by the bank?

Here’s the listing:

THIS IS AN “AS-IS” PROPERTY, BUT A NICE ONE!! 2 BEDROOMS, 2 BATHS, HARDWOOD FLOORS. GREAT CLOSETS, GRANITE, BALCONY, FIREPLACE…LUXURY LIVING. NICE FLOOR PLAN, IN-UNIT WASHER/ DRYER.

PRICED TO SELL. NO DISCLOSURES. EARNEST MONEY IN FORM OF CASHIERS CHECK. PRE-APPROVAL LETTER MUST ACCOMPANY ALL OFFERS. SPECIAL ADDENDUMS.

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Re/Max Regency has the listing. See more pictures here.

Unit #506: 2 bedrooms, 2 baths, 1200 square feet

  • Sold in September 2004 for $270,000
  • Lis pendens in June 2007
  • Was listed as a short sale in November 2007 for $280,000 plus $20,000 for parking (which had to sell with the unit)
  • Bank-owned in February 2008
  • Currently listed at $278,500 (I can’t tell if parking is included- it may be)
  • Assessments of $413 a month
  • Taxes of $3,814

6 Responses to “Foreclosure Alert: 2004 Prices in 2024 S. Wabash in the South Loop”

  1. Sounds like another bank doesn’t want to lower the foreclosure bid price because they are sitting on a mountain of toxic, crap MBS securities and other soured loans and are afraid if they lower the price of these REOs they will have to mark to market their MBS.

    I used to think banks were waiting for Godot with these ridiculous ask prices but it turns out they knew better than us and were waiting for a big ol’ bailout! They have the lobbyists in key places and want our hard earned tax dollars to help them offload their worthless loans!

    I will laugh loudly if WaMu turns out ot be the idiot bank holding the bag on this one.

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  2. “if they lower the price of these REOs they will have to mark to market their MBS”

    The pricing of a single (or many) REOs has no direct effect on mark to market pricing of any MBS or CDO.

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  3. Anon,

    While this may be the case now: what if the bank is selling these REOs and they have MBS & CDO’s based on comparable properties, I believe there is a strong case for a securities fraud lawsuit.

    Banks are supposed to be using mark-to-market accounting methods to value these. In other words their MBS should reflect the fair market value of the underlying assets. Not what they think or wish it is worth. They are probably scared to death to be forced to write down their MBS to its fair market value and want to avoid this scenario at all costs.

    I think many big banks have just as strong a motivation for not dumping REOs to avoid this predicament as they do to minimize the writeoff on this particular loan. If they write down their MBS portfolios people will see the emporer has no clothes and then they close up shop.

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  4. ‘In other words their MBS should reflect the fair market value of the underlying assets”

    This is a total misunderstanding of how either MBS or mark to market accounting works. I suspect it’s MBS, but you’ve never wanted to listen on that, so I won’t bother.

    Which isn’t to defend the compentence or honesty of the banks in dealing with their REO inventory. But I think it’s more a case of institutional gridlock with no one certain enough about their job security to make a potentially incorrect call dealing with a situation that they have little familiarity with.

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  5. The bond/security is the asset and the home is the collateral. If the value of the collateral drops then in theory the value of security or bond should also drop because the bond/security has become a riskier investment.

    Currently banks are selling homes instead of securities – if they put too many properties on the market it may further depress the comps on the rest of the homes in their inventory. Which in turn then lowers the value of their bond and security, and so on. I’m sure the banks are releasing the REOs at a metered pace, partly through deliberate action, partly because they cannot process them fast enough, which might also be deliberate. Banks have been writing down their portfolios and taking losses but their doing it fairly piecemeal and it’s being spread out over quarters rather than being taken all at once. Sometimes the bank doesn’t quite know what its loss was until 3 months after the REO property is sold and the back office has a chance to crunch the numbers. REO’s aren’t like stocks of 1929 that can go to ZERO. Houses are worth something it’s just that with the extraoridinaly low number of sales, it’s difficult to properly price these things. It’s a mess out there, it really is.

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  6. homedelete wrote: “REO’s aren’t like stocks of 1929 that can go to ZERO.”

    Actually homes do go to zero. Look at Detroit, you can get a free home if you agree to pay property taxes and maintain it. You see, there are holding costs to real estate that make the asset price zero or below zero in some cases. It happens, but probably not in Chicago.

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