Bank Owned Lakeview 2-Bedroom Reduced 27% from 2006 Price: 3014 N. Sheffield
This 2-bedroom newer construction unit at 3014 N. Sheffield in Lakeview recently came on the market.
It is bank owned by Bank of America, which recently halted foreclosure sales in all 50 states. Obviously, any buyer of this condo will have to wait until the moratorium has been lifted to purchase this property.
It looks like this building was built in 2005/2006.
This unit has hardwood floors and the kitchen and baths appear, from the pictures, to be intact.
The kitchen has cherry cabinets, stainless steel appliances and granite counter tops.
The master bathroom appears to have a double vanity.
The unit is now priced about 27% below the 2006 purchase price.
There is a stretch of similar new construction condos on this block of Sheffield.
Will the sale of this unit put a floor under the prices on this block?
Jason Shapiro at Rising Realty LLC has the listing. See the pictures here.
Unit #2S: 2 bedrooms, 2 baths, no square footage listed, 1 car parking
- Sold in October 2006 for $499,000
- Lis pendens foreclosure in July 2009
- Bank owned by Bank of America in August 2010
- Currently listed for $366,300
- Assessments of $140 a month
- Taxes are not listed
- Central Air
- Doesn’t list washer/dryer but there would be a hook-up in the unit
I think these are the condos right across from the Vic?
I can’t believe someone paid half a mil for this.
Right across from the Vic would be the 3100 block, no? This is, I think the block just north of Wellington where there’s like 8 identical 6-flats in a row.
Question: With the moratorium, won’t all of these units be taken off the market? If not, I assume you can still put in an offer – but what is the sense? Shouldn’t the Board of Realtors have a rule that the foreclosures should be immediately taken off the MLS? My concern is that these foreclosures have flooded the market with their falsely low prices. Once taken off, buyers can see what is really out there.
The moratorium means that no new foreclosures will be processed until the documentation mess is straightened out. This foreclosure has happened and the occupant-borrower is obviously out the door, so all the moratorium means for this property is that a thorough search of all documents relating to the foreclosure and previous mortgage will have to be made.
Anyone desiring to buy this place and other recent foreclosures will have to go through a much lengthier process to close. Title insurance will be very difficult and expensive to get, most likely, if it is even possible. A closing that might have taken weeks before is going to take months now, and cost the prospective buyer a lot more in legal fees and other closing costs and financing will be much more difficult to obtain. I would guess that most of Cook County’s foreclosure inventory of over 28,000 houses and condos will be affected, and anyone buying anything is looking at a much lengthier and expensive closing process. The more expensive the dwelling, the lengthier the process will be.
New foreclosures will of course be delayed for a few months. By spring, all this foreclosure inventory will be coming on the market again, and most buyers will be mindful that just because it’s temporarily off the market now doesn’t mean it will be forever.
I’m wondering what effect this will have on buyers who have purchased foreclosures in the past couple of years. Will these sales be reversed?
The entire debacle is going to have a very chilling effect on lending and on sales in general. We don’t know where it all goes but we know that we simply can’t trust the system anymore, and many prospective buyers will simply choose to back away and put off buying anything at all until this has been worked out.
Clio,
Yeah, you would think there would be a rule. You would also think that the bank would want them taken off the MLS also. Go figure.
But I wouldn’t call this pricing false. These prices were set before it became clear that you couldn’t sell them.
Laura,
I thought the foreclosure and title insurance problems were limited to B of A and Chase. And only one title insurance company has refused to insure those, though I’m sure others will follow.
Just curious what the chatterers think of this:
http://econlog.econlib.org/archives/2010/10/the_real_forecl.html#
“The real scandal is that the process of recording property title is so antiquated, and there are so many interest groups that resist modernizing it. The MERS mortgage database shows what a modern system could look like. But all of the counties that charge fees for title recording, the title “insurance” companies that shake down home buyers to buy “protection” from getting sued to prove that they own their property–these interest groups want to keep the title recording system as expensive and unreliable as possible.”
You are correct, Gary, and guess what else? Only recent foreclosures are affected, not the thousands that have been languishing on the market for over a year (I know, I’m tracking a number of them. Now, Chase and BofA are two of the biggest lenders in the country with the biggest portfolios of bad mortgages, but this is only a temporary snag in the system and will only delay, not stop, the foreclosure sales.
All the mess really accomplishes is to muddy the waters and increase the miseries involved in closing and financing a purchase. These foreclosures are going to happen no matter what. There might be one loan out of tens of thousands that is being wrongfully foreclosed on, but you can believe the rest were people who really and truly were in default.
I really don’t see why this should effect the thousands of foreclosures already on the market for many months now.. or rather, the 1200 or so visible on the market here in Cook County out of the 28,000-plus in Cook that are lurking in the “shadow” inventory. It effects recent and current foreclosures, but really only kicks the can a little further down the road. If the borrower is in default, the foreclosure is going to happen sooner or later.
Michael David White predicts that 20% of existing mortgages not already in foreclosure are seriously impaired and will be in foreclosure, based on delinquency and underwater rates. 9% are delinquent, about 5% are “dirty current”, which is modified after the borrower went delinquent, and 5% are “seriously underwater”.
Add all this to existing foreclosed inventory and we can see that it will be many a long year before we can expect prices to even level off, let alone appreciate, especially when we look at the fundamentals of incomes, which are dropping, and employment, which is dismal and looks to remain so for a few years.
I have also read that Wells Fargo will also be affected. WF is huge.
Buying a place has just become a lot more complex and stressful.
What does “dirty current” mean?
Only the big banks that securitized loans are halting foreclosure. Local, mid sized, credit unions and regional banks are still foreclosing. a majority of mortgages are the big banks but definitely not all.
“Buying a place has just become a lot more complex and stressful.”
This is not good news, obviously – but it actually could have more disasterous effects on renters. The rental pool is going to be significantly increased. Add that to unavailable foreclosed properties and you have a situation that is ripe for rental gouging in the coming few years!! Are there any regulations regarding rent increases?
Just read that GMAC, PNC, and Litton Loan Servicing are also affected.
As for rentals…there are going to be so many rental units on the market that rents should plummet. There are a ton of people who really need to move, short sales are not an option, and they don’t have the cash to sell. They are all turning to rentals.
“As for rentals…there are going to be so many rental units on the market that rents should plummet. ”
Gary, I don’t understand what you are saying – if there are going to be many people trying to rent, shouldn’t rents go up? Also, why are there all of a sudden going to be so many rental units on the market? Remember that short sales and foreclosures are not available for rent.
clio – you sound like a landlord on crack. we are a long way still from rent parity and no one is going to get “scared” for lack of rental inventory. i just saw a large developer just rent a bunch of expensive condos firesale cheap to push his inventory issues forward. until this shadow inventory is sold – and my guess it will be 5 years – there will be an overhang on the rental market in chicago
What I’m seeing is that people who are underwater on their condos are renting those out and buying the single family home (in the city or suburbs.) So now they own two properties (as long as they have good credit.) This is the norm now (see the e-mail question from Looking in the 421 Melrose thread who is thinking about doing this before he ever even buys.)
So I don’t foresee a tight rental market for awhile. Also, as I’ve said, they have been building new rental high rises downtown as quickly as they can and/or converting existing condos into rentals (as we saw with Burnham Pointe in the South Loop and that chunk of units bought at 400 N. LaSalle for the same purpose.)
Clio,
There are sellers that need to get out of their place. They can’t sell so they are going to rent their unit out. Then they are going to buy a place. So rental supply is going up.
I thought the way the moratorium was working is that literally any foreclosure owned by BAC that is on the market is halted. Basically- it doesn’t matter that it’s already listed. People who have contracts on foreclosures and were supposed to close, say, next week- have been put in limbo land. I’ve also seen stories where Freddie and Fannie owned properties have literally just been pulled from the market.
So- from what I understand- there are NO SALES at all in foreclosures from BAC nationwide and from the following other banks in 23 states:
PNC, JP Morgan Chase, Ally
Wells Fargo has already said they are fine and are not halting foreclosure sales.
It will be very interesting to see what happens – I think it is anyone’s guess. My true feeling is that sales will come to a virtual halt and a HUGE number of people will flow into the rental market. Sure there will be more rental units coming on the market, but I think the number of people wanting/needing to rent will be far greater than the number of units that come on the market (ESPECIALLY in the more desireable areas). I do think that rents will go up in the coming years (until people are able to buy again).
I just heard that Bank of America is telling people who have contracts on foreclosures that the delay will be anywhere from 15 to 90 days.
What negative impact in percentage value are people on this forum expecting the moratorium to have? Please indicate if the percentage is based off of under market sales (foreclosures, short sales, estate sales, etc), non-distressed sales, or current average list prices.
Clio – rents have been, and will continue to be soft for years. Right now I can go rent a new condo for $1100 – $1500 in most northside neighborhoods. I recently went on a interesting tour of the chicago rental market again with my buddies younger borther. he and his friend rented a newish (within the last 4 years) 3 bedroom 2 bath in Northcenter, with a parking spot and in unit laundry for $1500 / month. This was not uncommon. I think everything we looked at over 2 days was either a developer who couldnt close out or someone tring to rent out their condo.
Funny thing is these guys both have good jobs and can afford a decent rent. If they had less money then we would have probably looked at the kidns of places I rented at that age, old 3 flats and small buildings
“Dirty current” means a mortgage that was previously delinquent, modified, and now current. These are considered risky because of the high rate of recidivism on modified mortgages. Most will end up back in default.
I have a friend who lives in unit 2N of one of these… they are nice but I don’t think i’d ever buy one. The stairs to the rear bedrooms are wierd and I dont’ like the buildings as the construction is nice but there’s just something I don’t like that I couldn’t put my finger on. I can believe that people did pay 500k for these in bubble times, they are nice and cookie cutter as you can get
Taxes are also probably 6k a year until you get them appealed and then still they’ll probably be 4800 or so.
Haywood, I agree that the rental market is currently “soft” and there are a lot of rental deals out there right now – but what do you think the rental market will be in 1 year (when people stop buying houses b/c of the foreclosure/short sale debacle as well as inability to obtain mortgages for regular houses/condos). Like I said before, it is anyone’s guess.
“I thought the way the moratorium was working is that literally any foreclosure owned by BAC that is on the market is halted. Basically- it doesn’t matter that it’s already listed. People who have contracts on foreclosures and were supposed to close, say, next week- have been put in limbo land. I’ve also seen stories where Freddie and Fannie owned properties have literally just been pulled from the market.”
It’s always possibly (however unlikely) that it became REO through a consensual foreclosure, or a foreclosure conducted by another lender some time ago, or a foreclosure of a construction loan, and so being REO does not *automatically* mean it’s in the moratorium bucket, altho that’s going to be the strong, strong presumption.
I didn’t live here during the housing boom, but I can’t imagine a developer or a buyer saying, “Wow, look at all those trains going by. I’m going to build/buy here.”
I walk around the lakeview neighborhood often and see rental signs for a longer time. There are plenty of rentals in lakeview on the market and they take longer to find tenants and these are even the nice places. The shitty places aren’t renting at all or lowering the rent so much that one person can afford to live in the crappy 2 bedroom.
clio – why move and rent when you can stop paying your mortgage live for free for months or years in your moratorium frozen foreclosure?
“Just curious what the chatterers think of this:
“The real scandal is that the process of recording property title is so antiquated, and there are so many interest groups that resist modernizing it. The MERS mortgage database shows what a modern system could look like. But all of the counties that charge fees for title recording, the title “insurance” companies that shake down home buyers to buy “protection” from getting sued to prove that they own their property–these interest groups want to keep the title recording system as expensive and unreliable as possible.”
1. Holding up MERS as an example of anything positive is a joke.
2. Counties (generally–maybe there are some) don’t make money on recording fees; the fees cover the recording department staff and records management, etc.
3. “shake down” is sort of ridiculous. It’s much more of a service industry than anything else. You want to take care of getting your own deed recorded (easy enough–but what if the seller gave two deeds?), help yourself.
The attorneys finally figured out a way to halt foreclosures over the technicalities. From my standpoint, you either can pay the mortgage or you can’t. Who owns the mortgage, how the loan was securitized, etc are all just red herrings to stop the foreclosure but have nothing to do with whether a homeowner is paying their mortgage as agreed.
It really is simple… You pay you stay. If not, get the hell out. I still don’t get why people are so hell bent on keeping properties they clearly can’t afford under even the best circumstances.
I have heard of a few transactions being halted already because of this. We really don’t need continued uncertainty in the housing market and I can’t see how this moratorium is going to help anyone.
what is interesing is that one of the girls that works in the office is looking to rent a 1 bed/1 ba in 60610/60611 for 1500 including parking and cannot find ANYTHING remotely decent. (and I think it is going to get a lot worse for renters in 2-3 years).
There are plenty of 1bd/1ba in 60610 for under $1500 which are large and include all utilities except electricity. I know because I live in one.
“I can’t see how this moratorium is going to help anyone.”
It’s keeping people in their houses before mid-term elections!
“There are plenty of 1bd/1ba in 60610 for under $1500 which are large and include all utilities except electricity. I know because I live in one”
Including parking as well?
Russ,
i need you expertise, could you give me the skinny on a multi property loans/mortgage?
In certain areas, like Old Town, the rental market is still tight. However, areas like Lakeview are full of supply. The older, crappier places are going to have to be updated, or settle for lower rents. When I moved to Chicago 4 years ago I split a 2BR in Linclon Park for $2200 a month (and it was a crappy joint). Now I think that place would be lucky to fetch $1500.
On another note, until unemployment gets back to normalized levels, we will not see much improvement in the rental market. Right now all of the recent college grads without jobs are either moving home with Mom and Dad, or moving into a 4 BR where they can split the cable bill 4 ways. Until they are all employed with decent salaries, the LP’s and LV’s are going to have depressed rental rates (because the demand is not nearly high enough to support the recent increase in rental supply).
“what is interesing is that one of the girls that works in the office is looking to rent a 1 bed/1 ba in 60610/60611 for 1500 including parking and cannot find ANYTHING remotely decent. (and I think it is going to get a lot worse for renters in 2-3 years).”
i live just north of dearborn and division in a 2/1.5 w/ parking for $1700/mo. i have lived here for 3 years. i was paying $2000+$250 for parking my first year, $1800/mo+$250 for parking my 2nd year and now this year (I just renewed my lease Aug 1) I’m paying $1700 all in. renters are still in control and will continue to be for quite some time. just because a listing on craigslist is asking $2000/mo doesnt mean you cant rent it for $1500.
Is anyone else out there trying to negotiate a short sale with Bank of America? Radio silence lately (although I was prepared for a long silent treatment going in).
I am curious to know if anyone has gotten any indication that short sales are moving along given the recent news.
“Including parking as well?”
I don’t get the parking because I have a motorcycle and they won’t park it in my building (valet is not insured for motorcycles) but I believe parking would make it right around $1500. My rent is $1280 without parking. It’s a separate cost in my building but you pay it at the same time as your rent (same statement).
craigslist has a selection bias. Most of what you see are the overpriced rentals which don’t rent. The apartments that do rent for cheaper have usually been removed because, well, they’re already rented.
“just because a listing on craigslist is asking $2000/mo doesnt mean you cant rent it for $1500.”
Thanks Kevin. JP$, and jfmii for the info- i will pass it on to her.
Roscoevillager, I am not negotiating a short sale through Band of America, but am in contracts for short sales through other banks. My question is: With all that is happening with foreclosures, are there going to be issues w/title companies regarding title insurance for short sales? I would think not, but they keep changing rules and I am getting a little scared about proceeding.
@Roscoe:
I closed a BofA shortsale last month. It went to contract back in late March. It literally took about seven months for them to approve it and get us to the closing table.
“are there going to be issues w/title companies regarding title insurance for short sales? I would think not, but they keep changing rules and I am getting a little scared about proceeding.”
Shouldn’t be, because the borrower is executing the deed, rather than the “sheriff”.
thanks anon
Clio,
i am thread hijacking and need your knowledge see below
“Russ,
i need you expertise, could you give me the skinny on a multi property loans/mortgage?”
Groove…what information are you looking for on multi-unit loans?
Groove:
They are treated like any other purchase except the loan amounts can be higher for 2, 3, and 4 unit properties. If you are living in the property, then you can qualify for FHA 3.5% down. Conventional can do 5% down with MI on 2 units. Can’t recall if you can get MI on 3 and 4 unit deals, I would have to check. If not, you need 20% down.
FHA you have to be careful because on 3 and 4 unit properties, the rental income has to cover the final PITI. I’ve seen a lot of deals get killed over this rule even if you don’t need the rental income to afford the mortgage.
If an investment property, you will need 25% down.
thanks Russ and Clio – I went in with the expectation that it would take 10+ months we’re about 1 in but haven’t got too far (as expected)
It is absolutely still a renter’s market, even in the nicest areas (which is not to say that there isn’t a lot of crap sitting empty in the nice areas because the landlord’s refuse to slash rents). Due to its high assessments, it would run me at least $1,000/mo more to “own” my current 2/2 in ELP than it does to rent. And if I were staying, I would seek yet another (small) rent discount.
But I’ll soon be…gasp…buying a condo in ELP that will run me a few hundred more each month than my current rental. Will the value of the place I’m buying remain flat for the next few years, or could I get it for $20k less in, say, February or at some point in the early spring? Perhaps. But as I’m coming up on three years in my current rental – and having paid $90k in rent – I’m pretty sure that I’ll be o.k. if the place I’m buying remains at roughly the same value three years hence. And if it appreciates at all, in three or five or seven years, that’s a bonus.
Russ–I was recently told that you can’t do a conventional loan on a 2-unit right now without at least 20% down because the PMI companies won’t insure the loan. Is this not accurate?
Russ and ChrisM,
If i go the multi combined how does escrow work? should i just treat them as separate? and will i get the same rate for both?
what i am looking to do is keep my current home rent it, and would be to moving into a new home. the rental home (my current home) has a ton of equity built in it and rent will easily cover the PITI (maybe not reserves if i rent lower to family).
any other info you need?
anonny,
I have a similar plan. I think buying will cost me more than renting but I place value on at least banking some of my payments in equity and being able to find a place that I really like or that I can make just the way I want it.
My understanding is that you need at least 30% equity in your home to count the rental income you will receive on the current property for mortgage qualifying purposes, which you’ve said you have. You will have separate escrow accounts for each property. The rate on a multi-unit is typically about 0.125% higher than a SFH rate. Also, last I checked you can count 75% of the appraised rental income on the multi-unit towards your income on the loan application.
I’m actually doing the same thing…renting my current unit (the first floor of a 2-unit building) and buying a SFH. Looks like we are the new “norm”. However, since I don’t have 30% equity, I had to qualify for both mortgages.
groove,
are you really sure you want to buy a multifamily. While the numbers may make sense, the headaches that you may be faced with are tremendous. I have several rental units (all very nice, high end units and houses) but, over the years, I have had countless problems (and, at all times of the day and night) ranging from roof leaks to tenants asking about garbage pick up and one even asking me to come over and kill a spider that was in her bathtub!!! This kind of nonsense is OK if you have someone to take care of all of this, but if you are dealing with it on your own, it is a killer. Also, there are numerous unforeseen costs – you definitely need a fund for these types of emergencies!!
Clio – whats the vacancy rate for apts right now? what the percentage of increase in demand for people who are not buying or have to move out? my guess is demand wont be affected by these people much, becasue you are not getting the regular growth of new people comign into the city. Demand for Apts wont pick up until unemployment drops and we get real growth
@Chris:
There are MI companies still doing 2 units. All banks don’t have access to the same programs. It is the 3 and 4 unit properties most won’t touch right now. For a 2 unit, you can also get a 2nd mortgage depending on the price of the property and down payment (10% down) to avoid MI altogether.
@Groove:
Chris is correct regarding the rental income on the new property and the old property. Is the new home a multi unit or another single family?
“craigslist has a selection bias. Most of what you see are the overpriced rentals which don’t rent. The apartments that do rent for cheaper have usually been removed because, well, they’re already rented.”
agreed. that is basically what i was saying; it is very hard to see what the rental mkt is like based on listings bc there is very little transparency in regard to prices rents are actually being signed for.
Thank you guys again,
ChrisM,
yep we are the new norm, hey how do the come up with an “appraised rental income” they do a craiglist search or something? .125% higher sucks is there a way to “talk them” into a SFH rate if its just two homes?
Clio,
you may have not read my post thoroughly, i am not looking for a Mulit family just looking to buy another SFH and rent out my SFH. I do heed your words on dealing with tenants, a reason i didnt look into this sooner is the dealing with tenants (i.e. 4 am call for something stupid).
Russ,
the new home will also be a SFH and will only be renting out my old home (one tenant).
Is there any positives of going the FHA route? and would i be better off treating the loans as two separate ones or combining?
Groove,
I also read your post wrong…I though you were looking into a multi-unit. Your rate will be the same regardless of having 2 SFHs. If you have 20% down and don’t need a rehab loan, then go conventional. If you need a rehab loan or have 10% or less to put down, FHA probably makes more sense.
Groove:
Your message read like you wanted to buy a multi-unit building (2-4 flat).
If you are buying another single family home then things get much easier. If you aren’t putting 20% down, it is much better to get a first mortgage for 80% and then a second mortgage for 10% and you put down 10%. This way you avoid mortgage insurance.
The only advantage to FHA is that you only need 3.5% down versus 5% for conventional. FHA also doesn’t penalize you as much if your credit isn’t perfect rate wise.
Russ–wasn’t the UFMIP just lowered and the AIP just raised on FHA loans?
Multi-units are hot right now. They get ‘snapped’ up if they’re priced right which is usually less than half of what they were selling for at the peak.
Russ and Chris,
oops i reread my post and man i confused myself 🙂
it really all depends on the price of the new home, of the two places we were considering before this weekend (another story). the first would be a 30% down and the second would be a 35-37% down. i still could put in a 30% on a higher priced home but would rather not (and wont) tap other savings areas.
and another question i have a second (HELOC) on my current home i keep open for emergencies and large improvements i dont want to tap savings for. there is only immaterial balance on it to keep chase from closing it.
will i loose the second if i combine both props?
Groove & Chris: Interesting. I ran first pass numbers and assuming I got mid-market rate for a 2/2 around me (based off friend signing a lease for Nov 1 in similar condition) it’d take me 3.7 years to realize the net loss of what I am probably underwater on if I tried to sell now.
So, if I wanted to move (and I do, in say next spring or spring 2012), it’ll be interesting to entertain the notion dragging out the pain for 3+ years (with possible chance of recovery) vs. taking the hit and paying out cash, which lowers downpayment for next place.
Wicker – if you want to be a landlord – don’t forget to chance your insurance and become very familiar with the Chicago Residential Landlord Tenant Ordinance.
Groove:
The current mortgage you have is totally separate from the new mortgage you would get. You don’t combine both mortgages on two separate properties. They have no relation to each other.
If you can swing a 30% down payment, you shouldn’t have any problems qualifying. I would do the minimum down payment necessary which is 20% and keep your cash. The larger down payment isn’t going to get you a better deal.
Oh yes, the Chicago Residential Landlord & Tenant Ordinance. Tipping the scale in favor of tenants since 1986. Pay particular attention to the treatment of security deposits. If you can find a very strong applicant it might be better to just waive the security deposit altogether…many are doing that these days.
Others are charging non-refundable move-in fees.
and in most case, DO NOT rely on the realtor who rents your unit to provide your tenant with the proper lease that has the RLTO attached to the lease.
Wicker–are you saying you would lose money each month? Your friend’s rental might not represent the market. You’re in Wicker Park in a recently constructed 2/2?
The “standard” Chicago apartment lease with the 2 page RLTO summary is easy to find online. It says “CHICAGO APARTMENT LEASE” at the top. Use that and you won’t be targeted for 2x the security deposit for not attaching the summary.
Wasn’t there discussion recently of possibly adding “right to cure” language to the ordinance?
I’ve come across numerous cases where landlords have gotten burned for tens of thousands of dollars in attorneys fees; in addition to the handful of reported appellate cases where the landlord gets dinged for tens of thousands.
It’s such BS; you take a $1,000 security deposit and you get some punk who sues you for $15,000 including attorneys fees – and the judge gives it to him.
So you say FINE – TAKE MY MONEY – TAKE A JUDGMENT – TAKE WHATEVER YOU WANT JUST STOP THE BLEEDING and then the scumbag TTT lawyer for your scumbag tenant brings motion after motion, and files brief after brief on the most mundane of issues simply to drive up attorneys fees and when it’s all said and done those municipal judges in 1501 or the 13th/14th floor basically rubber stamp whatever the plaintiff’s lawyers brings in attorneys fees.
It truly is a nightmare, everyone I’ve talked to, including myself, who has defended these things say that they’re a nightmare…..and as a landlord you think “oh it won’t happen to me” or whatnot and then when it does you’ll be out tens of thousands of dollars and your lawyer will try and stop the bleeding but it’s nearly impossible.
In one particular case I’ve defended the Plaintiff’s lawyer was asking for $50,000 in attorneys fees. Yes you read that correctly. $50,000 in attorneys fees for returning a $1,200 security deposit within 60 days instead of 45. Oh, and he forget to pay $12.00 in interest to the tenant. I’m not joking.
Through some technicalities and skillful procedural maneuvering I got it knocked down to $15,000 or $20,000 IIRC. That case still gets me irked in case you haven’t noticed and this case was years ago, many years ago. The landlord was simply friend of the firm who rented out his condo in LP to some grad student, and then bought a house in the suburbs for his family. It can happen to you and even someone you think is a nice tenant will sue you on the 46th day.
These are the cookie cutter McCrapBoxes you can see from the el around the Wellington stop. I’m not surprised we’re starting to see foreclosures as anybody who paid 500k on these or has a 450k+ mortgage is an IDIOT.
Whenever I walk down this stretch it is frequently in between taverns and I like to yell out “BANK OWNED!”.
Seriously these people were really stupid thinking they were going to achieve the American dream of homeownership by dropping half a mill on a 2/2 McCrapBox.
“2. Counties (generally–maybe there are some) don’t make money on recording fees; the fees cover the recording department staff and records management, etc.”
Stop acting stupid. Technically government never shows a profit just a “surplus”, but they definitely engage in empire building. And keeping around a bunch of staff that isn’t needed if a modern system were used is definitely an example of municipal empire building.
Homedelete…scary story, indeed. Were the cases typically related to security deposits?
Return of deposit, interest on deposit, and failure to summarize the RLTO in the lease, and co-mingling of funds. HE had never heard of the RLTO. but mostly deposit related.
“#Chris M on October 11th, 2010 at 12:04 pm
Homedelete…scary story, indeed. Were the cases typically related to security deposits?”
Yeah, the most surprising thing I learned from an attorney was you need to pay the interest on the anniversary of the lease, even if the tenant renews, or you have violated the ordinance.
Wow – that is indeed scary, HD. I totally can see how that could happen. Even when you think your tenants are great and you get along with them, all of a sudden, they blindside you with some idiotic claim – and you are stuck paying for it!!
“The current mortgage you have is totally separate from the new mortgage you would get. You don’t combine both mortgages on two separate properties. They have no relation to each other.”
ok this answers the other 100 questions i have loaded thank you so much russ and everyone else. i always thought you could do one loan for many properties. see and this is why i asked before going in don want to look “wet behind the ears”.
“If you can swing a 30% down payment, you shouldn’t have any problems qualifying. I would do the minimum down payment necessary which is 20% and keep your cash. The larger down payment isn’t going to get you a better deal.”
i was thinking the minimum, but i did a large DP on my first home and too me the “perceived” low monthly mortgage payment helped/forced me to where i am at today. now all said and done i would have made more investing elsewhere but gambling is not my nature, “safe and steady” and “back up plans have back up plans which back up plan b has a reserve” is how i roll.
*NOW with knowledge of it being a separate loan, Russ and Chris, i need to refi my current mort will it matter or should i go through the same bank for both the current and new one?
http://www.chicagorltolaw.com/
Here’s an example of a guy that will sue you for failing to pay or credit interest on a security deposit. He outlines all the things you need to do to be compliant with the code.
Believe me, even the nicest of tenants, from the best of families and backgrounds will sue you.
Groove…you can get the loans at different places…doesn’t really make a difference. However, make sure to refi your current place first as an owner occupant…you will get a better rate than if you refi later as a non-owner occupant. And you’re typically best off going through a mortgage broker that has a variety of different investors that can fund the loan. I’m guessing Russ is a mortgage broker, based on his description (though it sounds like you already have a finance guy…don’t worry about asking him these questions, that’s what he gets paid for!). I’m a real estate broker who just happens to know the financing process pretty well.
good call on the refi as a owner now thing.
“And you’re typically best off going through a mortgage broker that has a variety of different investors that can fund the loan”
i will try that, as i am a walk into a bank guy and get i done guy, i need to break my habits sooner or later 🙂
“I’m a real estate broker who just happens to know the financing process pretty well”
you have been a great help. wifey says thank you too.
Chris M: Yes, I’m in a recently constructed 2/2 in Wicker – I assumed $1600 a month as a friend just signed one on Milwaukee across from Nick’s for that amount.
HD: Yeah, I’m familiar with the RLTO and your warning is well heeded. I’m only now (literally, today) thinking about what it would mean to be an unintended landlord. There’s a good chance I’d end up renting to a few friends for the next 4-5 years, and then to my parents.
HD: I had no idea how strictly the RLTO was enforced (nor what a crazy racket the whole attorney’s fees thing is). What if, say, a tenant were an attorney…is it still enforced as strictly? (Not that I’m planning to give my landlord a hard time when I, hopefully, move out in a month; I’d just like to know my options, in the unlikely event that he gives me the least bit of run around with respect to the deposit.)
annony, yes it’s still enforced strictly. It’s not so much the damages that’s the problem it’s the plaintiff’s attorney fees and they have an incentive to run it up as much as possible. And they do. However the smart attorneys will only run up fees against the landlords they know have assets. No sense in running up $15,000 against a landlord who can’t pay and just Bk’s it’.
“i always thought you could do one loan for many properties.”
I understand that you don’t have to, but surely you can? Dunno pros/cons.
“Technically government never shows a profit just a “surplus”, but they definitely engage in empire building. And keeping around a bunch of staff that isn’t needed if a modern system were used is definitely an example of municipal empire building.”
True, but recording fees are (most places) not a disguised tax that funds other projects.