More Million Dollar Chicago Condo Foreclosures

How does someone who buys a condo for over a million dollars get into financial trouble barely a year later?

I am seeing more and more of this.  The foreclosures are not just buyers with a subprime loan in a so-so neighborhood.  Many of them are also richer people living above their means, and also with a risky loan, who are losing their homes.

The latest is:

18 W. Chestnut in River North/Gold Coast:

  • Sold for $1,100,000 in March 2006
  • Auction price of $926,858

I don’t have any details of the unit (size, amenities.)  But these owners got into financial trouble almost immediately on this loan.

3 Responses to “More Million Dollar Chicago Condo Foreclosures”

  1. Subprime isn’t just about people with poor credit–it’s about anyone, good or bad credit, getting a loan that doesn’t qualify as prime or alt-a. Perfect credit and $150k annual income is great, but for a $900k+ mortgage sure isn’t a prime borrower–with taxes and assessments, annual payments on a 30-year amortizing mortgage would be north of 50% of gross income (or close to 70-75% of net).

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  2. Are you saying that the owner of 18 W Chestnut only had income of $150,000 and perfect credit and that because the payment was over 50% of gross income that they can not afford the payment? Or are you just using those criteria in general?

    If true- then why are they buying that property? Anyone can run the numbers and see that the math doesn’t add up.

    Someone with perfect credit is NOT getting a subprime loan.

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  3. Just made up numbers.

    If you are saying that lenders have been deeming a borrower subprime based solely on credit history–w/o regard to income and amount borrowed–then the responsbility for the bubble lies only with the lenders who have completely ignored basic loan underwriting. $150k income and $900k mortgage is a subprime situation and those types of borrowers are definitely out there–maybe not so much in Chicago, but lots in Cali.

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