There Are Boarded Up Properties All Over the City: 1114 W. Roscoe in Lakeview
We’ve chattered about some boarded up properties such as this multi-unit one at 1114 W. Roscoe in Lakeview.
It became bank owned in early December and has already been put back on the market.
Built in 1887, it has 3 units which include the following:
- Unit #1: 3 bedrooms, 1 bath
- Unit #2: 3 bedrooms, 1 bath
- Unit #3: 2 bedrooms, 1 bath
Built on a standard Chicago lot of 25×125, it also has a 2-car garage.
Yes, that is the Brown line El line directly behind the building (and you can make out the actual train in the picture.) It is also located on the alley.
There is only one interior picture in the listing- so you can judge for yourself.
What will this property ultimately sell for?
Eric Mundy at The Lake Shore Drive Group has the listing. See the pictures here.
1114 W. Roscoe: 3-unit building, 2 car garage
- Sold in April 1992 for $140,000
- Sold in September 2003 for $388,000
- Lis pendens foreclosure in June 2009
- Bank owned in December 2010
- Currently listed for $309,900
- Taxes of $7953
Was copper wiring and other valuable materials stolen from this place? It’s hard to tell with only 1 indoor picture of this place from the realtor. If that’s the case, this place needs to be bought by a builder. A do it yourself, weekend kind of person would be in over their head. What would the price have to be in order to knock this down and start over?
If one is serious about landlording and isn’t too concerned about living in a hip hood you can get units in better condition for about half the cost as this in Bridgeport currently.
When I compare the cash flows of properties down there to one’s like this I can’t help but think that these properties aren’t actually bought by a professional landlord to try to earn an income stream but rather are bought by an amateur landlord who values location and maybe doesn’t really know what they are doing.
$103k/unit, in unliveable condition?
no.
better to list it low, and see if there’s a bidding war, than to start at this price. I’ll be curious to see how soon it goes Pending (or not).
For this particular property it took 18 months for it to go from a notice of default to bank owned. Is that the new normal now in Chicago? I know a colleague who lives in Forest Glen and he hasn’t paid a mortgage for 22 months and the bank filed a notice of default after he missed 9 payments! The bank is probably a good 3 to 5 months away from kicking him out. Does anyone know how long a bank takes to kick thee deadbeats, I mean home “owners” out?
I love how you can see the el in the backyard of this picture. Still, land value is probably right around this price.
Nimesh: my assumption in IL is that if I stopped paying my mortgage, after a few months the bank would file (as you stated). Then, my credit report starts getting whacked. Finally once we start going through the proceedings all of my savings would get drained in favor of the mortgage. The only thing I don’t know is when they’d kick me out.
ahhh the goood ol roscoe and racine permission wall, i mastered my graff practicing on the wall.
so can the city buy this tear it down and plant an urban garden?
472 days is the average for judicial states from the first. Missed payment To the bank taking the property over. It depends on the bank and its a case by case basis. Former countrywide loans take forever whereas smaller regional banks go faster. I’ve been able to keep a family in their condo for three years no payment and I barely put up a fight. And the average time is getting longer and longer. The shadow inventory is building up and fast.
Asking for a loan mod and discovery adds another twelve to eighteen months to the foreclosure process. It may be 2013 or 2014 before the people who stop paying their home today are finally kicked out. Dq rates have leveled off and might be slightly declimning but they are stillelevated.
Im afraid that many foreclosed properties that vultures are actively awaiting to come on the market are going to be in this type of condition and in bad neighborhoods – so the facts/data about the number of foreclosures in the pipeline might be a bit disappointing. Another reason to buy now – if you find something you like. Seriously, the 500k sfh in east lincoln park is a dream that just ain’t gonna to happen!!!!
oh – for all of you with big eyes thinking about stopping payment because you can “live free” for a little over a year – stop that thinking right now!! Foreclosure is a terrible thing to go through – it can and will mess with your relationship, self-esteem, pride – you will become increasingly anxious, unsettled, depressed. Then the feelings of guilt and self-doubt come in. Every time you look at your wife/SO, you will feel like a worthless man – unable to provide shelter for your family, etc. Your kids are embarrassed of you., etc. This is psychologically devastating and something you will never forget. Then, of course, there is the financial aspect – your credit is ruined forever – even if you qualify for a mortgage in 8 years, you will be paying a much higher rate than anyone else. In the meantime – just try to get a rental – many places will not rent to people who are going through/have gone through a foreclosure. All in all, it is not a great thing at all –
Clio,
just because you tap on can with a string attached, it doesnt make it text messaging.
“your credit is ruined forever ”
Ten years is not forever. And getting a rental is not a big deal if you have a substantial down payment. Stopping payment on your mortgage affords you the opportunity to save up this down payment.
Foreclosure is only as bad as you make it and in your case you don’t seem mentally stable enough to weather an event like that.
Groove – I’m stupid – you have to spell it out for me. What are you trying to say?
“Seriously, the 500k sfh in east lincoln park is a dream that just ain’t gonna to happen!!!!”
Dunno about “east” Lincoln Park but last year I remember seeing a livable SFH in LP for around 500k. Sure it wasn’t up to the graniteel standards of the CC peanut gallery but these people aren’t smart if they’re willing to pay an extra few hundred k for finishes.
“Foreclosure is only as bad as you make it and in your case you don’t seem mentally stable enough to weather an event like that.”
Bob – you are still just a kid and don’t really understand the psychological ramifications of such a process. You can rationalize, etc. but believe me: your subconscious never forgets. It will always remind you that you were a loser that bit off more than you could chew, that you failed, etc. Believe it or not, it WILL adversely affect you in one way or another. If it doesn’t, then you are a sociopath – and I am not trying to be insulting, but it is true – if something like this doesn’t affect you, that is not normal (whether normal is good or bad is a different story – but it still makes you a sociopath)
“but these people aren’t smart if they’re willing to pay an extra few hundred k for finishes”
that is your opinion – but first, before you talk, buy a place and renovate it yourself and then tell us if these people “aren’t smart”. Renovating is incredibly tough for amateurs and people who have never done it before. Many smart people would gladly pay a premium to have something already completed.
I second Clio’s point. We just finished a renovation and I’m never doing that again….the premium for high end finishes is not for the finishes themselves…its for your sanity.
I’d think the parts of Lincoln Park over by Ashland / Fullerton could see SFH’s in the 500’s. The more desirable school districts and better transportation (read light rail) areas as you go east aren’t there yet.
Just on this board alone there are a few people who would immediately pounce on the 500k Lincoln Elm SFH. A board full of bears.
“Seriously, the 500k sfh in east lincoln park is a dream that just ain’t gonna to happen!!!!”
Maybe not in East Lincoln Park- where the homes were built for the rich and are, for the most part, much larger. But in other parts of Lincoln Park we’ve chattered about the $500k home before. Yes- they needed some work or were by the El line.
Here’s one on Lill from October 2009: http://cribchatter.com/?p=7528
Also- there’s one at 2700 N. Wilton we chattered about several times.
http://cribchatter.com/?p=7735
comparing east lincoln park to something on lill or wilton is like comparing kenilworth to glencoe or wilmette. All are great places but are not the same. However, I think you get my point that the majority of foreclosures in the system and looming overhead are going to be low end properties in less desirable neighborhoods. The fantasy of many houses in Kenilworth or Hinsdale or Oak Brook or ELP going into foreclosure is just that – a fantasy (but it is funny how many people don’t realize this and who want to move into these areas and keep waiting for the glut of foreclosures to hit the market – I keep telling them that these foreclosures are in Englewood, WP, etc. – neighborhoods that these people don’t want to move into.
Ah yes the old 500k crapshack on the tracks in Lincoln park… not really a comp
“that is your opinion – but first, before you talk, buy a place and renovate it yourself and then tell us if these people “aren’t smart”.”
I don’t need granite countertops or a stainless steel fridge. I value location above all else. People that believe they need these things are disillusioned.
Bob – do you like pretty, fit, younger women/men? I value personality and intellect – people that believe they need these other things (in a person) are disillusioned. See how it works?
I prefer custom and have been through several iterations of renovating including a gut rehab that we really should have been in a rental for. It’s really not so bad – a great excuse for a lot of grilling and takeout.
“that is your opinion – but first, before you talk, buy a place and renovate it yourself and then tell us if these people “aren’t smart”
The subject property looks like an absolute P.O.S.
A teardown that would be difficult to tear down, due to those poles in the alley.
Also, to someone who thinks the land value here is 300k. I beg to differ:
land value is often tied to a crappy ‘improvement’ on a desirable lot.
Might be a good neighborhood overall, but this is the armpit.
Look at those magnificent power lines, the dirty alley along the side yard, and listen to the hum of the el tracks in the backyard. Call the realtor because I’m home!
Land value for a property like this with an existing structure that needs to be demolished is a tough call. I’d say that there are few builders willing to take a long look at this property. Even the lot next door would hold more value due to the alley and power lines outside the windows. My money says that it will close for way less than 300K.
Would someone ever really buy a 250K condo on this exact lot? I think not. Will renters pass this property up for a slightly better option? I think yes! Call Daley and put up a dog run. He loves more green space!
“Would someone ever really buy a 250K condo on this exact lot? I think not. Will renters pass this property up for a slightly better option? I think yes!”
This is EXACTLY another reason why the school systems are so important in real estate. Put this in a great school district and people WOULD pay 250k or more to live here. VALUES (especially in POS properties) DIRECTLY correlate with the school system. Obviously, that is why so many people want to get into New Trier, Hinsdale Central and will pay a HUGE premium to live in the district. I know this is obvious to many – but you would be surprised at how many people out there don’t realize this!!!
as a great philosopher, add your favoite here _____ , would say;
is the “house” holding up the eletric/telephone poles or are the poles holding up the house?
or is the Train in the back a hindrance to your auditory sanctity, or is the train in the back your benevolence of being mobile?
“better transportation (read light rail)”
Only heavy rail in Chicago.
“I value location above all else.”
Which is why you think McK Park is a good spot? Seriously?
“Put this in a great school district and people WOULD pay 250k or more to live here. ”
Put it on the otherside of the street and people would pay $250k to live here. It’s not the school, it’s the location on the el and the powerlines and the alley that make it bad. You CANNOT replicate the negatives of this location in OB or K’W.
anon,
loving in an alley is not so bad – remember, you don’t feel as claustrophobic – the alternative is to have no windows on that side or stare 2 feet into your neighbor’s window.
obviously I meant “living next to an alley” and not “loving in an alley” although the latter could also be fun…
Clio- your propaganda has reached absurd levels.
People, whatever you do, DON’T MAKE FINANCIAL DECISIONS RATIONALLY. Dollars and cents? Meaningless. This isn’t about finances, this is about your manhood. If you make decisions based on financial good sense and go through foreclosure, you are no longer a man. You are a loser. You haven’t provided for your family. You are worthless. You make me sick. In short: stop thinking, people…FEEL! And if you don’t, you are a sociopath. Yup. Like a serial killer or something.
Clio, please fill us in: how do you benefit from this? Honestly, I can’t imagine a person spewing this kind of garbage without a reason. It’s like you are trying to shame people into some con. What’s your game, man?
TftInChi – walking away from your home is unamerican. Which makes you a commie.
TftinChi,
I have no financial stakes in this site/game, etc. I just think that people who WILLINGLY stop paying their mortgage are criminals – no different than robbers/burglars and thieves. There are people out there who GENUINELY ARE in trouble and have no choice – THESE are the people that foreclosures/shortsales were meant for – NOT THE FRICKIN’ SELF-CENTERED, SPOILED BRATS THAT JUST DON’T FEEL LIKE PAYING THEIR MORTGAGE because the value of their house is down or because they now have kids and want to move (Sabrina’s friends). It is very similar to a team forfeiting in the 8th inning because they are losing. Yes – THEY ARE LOSERS and there is something MORALLY UPLIFTING and satisfying to get this off of my chest.
Clio: what do you call it when a business defaults because it is in their best financial interest to do so? I bet you don’t call it theft. A stunning display of financial and legal prowess?
Your attempts to belittle, shame and otherwise guilt people into acting against their best interests are disgusting. The argument assumes that individual home buyers take full liability for their contracts while allowing larger players to abdicate any and all responsibility when possible. While I in no way promoting individuals taking on irresponsible debt, they should use the system to their advantage whenever possible, just like the big players do. And yes, that means walking away from agreements when it is clearly in their economic interests to do so.
TftInChi – wow – I hope you don’t have kids and teach them that kind of nonsense. Businesses ARE different – they serve many purposes (add employment, add services, address needs of a society, are subject to different higher taxes, etc.) – you cannot compare individual home buyers to a business. Seriously, dude – you are morally bankrupt and need some guidance.
no, clio – you are this “loser” that you speak of, because you have resorted to name calling and insults to get people to get on your bandwagon.
i was seriously, seriously horrified that you used what it is supposed to be a message board to discuss and debate real estate into your own forum to attack people.
i respectfully ask you do not use the B word directed at someone again. i am not that person and i was totally offended.
if that’s what you resort to when people dont see your point, i’d truly love to know what you do bc i cant imagine you are in a respected position at a company.
“i respectfully ask you do not use the B word directed at someone again. i am not that person and i was totally offended.”
I personally love both pushing clio’s buttons as well as seeing him try to claim some sort of moral highground or preach form some sort of pulpit. He obviously thinks he is some sort of authority figure or that people actually take him or his views seriously on here and THAT is the funny part. 😀
clio is hilarious today. keep feeding the troll. foreclosure means you’re not a man. what if you’re a woman and you go through foreclosure. does that mean you’re no longer a woman? What if you were a man at the start of the foreclosure, but then had a sex change operation at the end of the foreclosure. Did the operation or the foreclosure make you a woman? So many unanswered questions, so little time.
LOL ownage
clio is good at getting attention
Well all need to stop, stand up and start a slow clap for homedelete. he is now in OIP mode and its is darn good to see. thank HD it was way out of left field and thats why it had me rolling on the floor.
“what if you’re a woman and you go through foreclosure. does that mean you’re no longer a woman? What if you were a man at the start of the foreclosure, but then had a sex change operation at the end of the foreclosure. Did the operation or the foreclosure make you a woman? So many unanswered questions, so little time.”
I was mistaken – I always thought the el was considered light rail whereas say the Metra was heavy rail. My quick google search didn’t give me a satisfying definition of the two terms.
Huge crimes? clio really? as pointed out how is United Airlines “restructuring” any less of a crime the joe average walking away from his home (a toxic asset)?
glenn wool a comedian said in a bit, “dont these suburban kids get it, they shouldnt be trying to act and dress gangsta like the rap videos. they should look to the bankers and men in suits, those f’er did far worse crimes than snoop dog and 50 cent ever did”
Clio — “I apologize to everyone else about my name calling – seriously, you guys are right. It is better to walk away from your responsibilities and get away with it than resort to name calling. I an truly a worse person than someone that resorts to defaulting on purpose – ARE U KIDDING ME?!!! COME ON people and look at the issues – everyone jumps down my throat for 1-2 name calling incidents but ignores the almost criminal act of defaulting on a mortgage on purpose. ARE U FRICKIN KIDDING ME?!! WTF? – This is so ridiculous it is almost funny. Our society is funny that way – we can’t stand and won’t allow minor little insults, but will let criminals get away with HUGE CRIMES. You just can’t write this shit.”
To be crystal clear: I don’t think you are better or worse than the guy defaulting on their mortgage, bob or anyone else. I don’t know you from adam and I don’t know anyone who is defaulting on a mortgage. Thing is, we have a fundamental difference of opinion on whether an individual breaking a contract is “almost criminal” (which, beyond not fitting the legal definition of “criminal” in this country, seems to me to be an incredibly pro-business bit of hyperbole). Seems we also have a disagreement on how to regulate and tax businesses versus individuals.
What I can say with certainty is that I don’t go around telling people that I know better than them, reminding them that I am rich and associate with many rich people, calling people names and telling people how they should feel. Personally, I think that is a pretty inappropriate way to conduct yourself and is not indicative of a very pleasant individual.
And I haven’t even touched on the fact that you are a relentless, unyielding cheerleader for the RE industry and the economy…
“What I can say with certainty is that I don’t go around telling people that I know better than them, reminding them that I am rich and associate with many rich people, calling people names and telling people how they should feel.”
OK – I get it now – this is where the anger is coming from. Remind me, though did I say on this thread how much richer I was than anyone?
Anyway, my anger was caused by immoral people just considering the financial aspects of their decision. Seriously, you know grandma is getting up there in age and is going to cost me a lot of money – is it “financially savvy” to push her down the stairs or inject her with KCL? TftinChi, would you be impressed by my financial prowess in avoiding my financial obligations to her!??!! Sorry to use such an example – but you obviously don’t get it – IT ISN’T JUST ABOUT MONEY!!!
I think of light rail as the thin and long cars running in the middle of the street at grade, usually with an overhead power supply. Phoenix has a perfect example.
The next category would be urban transit, which would include the Chicago el, DC Metro, NYC MTA, and other third-rail type trains.
The next is heavy rail, which would include Metra and other regional transit. These are either diesel powered or overhead electric.
Los Angeles has a mixture of light rail and urban transit. I’ve hear great things about their system, in terms of the cleanliness and speed of the rail, and the architecture/public art at the stations. The system doesn’t serve the west side very well yet, but it will someday for sure.
I’ve been in contract for 6 months now on a short sale in Uptown that’s going nowhere. It’s a studio. The seller bought it cheap for 30K ten years ago, then proceeded to use the unit as an ATM and take out 100K in HELOCs. The seller also owned other units in the building which are also all in short sale. I assume she used those as ATMs as well. From CCRD it looks like she bought several units all around the city. I am assuming she did the same thing wherever she went.
My purchase is going nowhere because she is several years behind on her condo assessments and property taxes and now no one wants to pay them. Because of her, the condo suffers, the city suffers and the taxpayers bail her out and the banks eat the cost.
I have no sympathy for strategic defaulters. I loathe them. My seller MADE money several times over on her properties and left a wake of destruction behind her. She’s a con artist. All these people who willingly took out mortgages for high-priced properties and decided to change their minds for whatever reason, some of them MAKING money in the process? They make me hurl.
LA has such a nice clean rail system because nobody uses it and everyone there is a dumbass and drives everywhere
“I have no sympathy for strategic defaulters. I loathe them. My seller MADE money several times over on her properties and left a wake of destruction behind her. She’s a con artist. All these people who willingly took out mortgages for high-priced properties and decided to change their minds for whatever reason, some of them MAKING money in the process? They make me hurl.”
Do you also loathe the dog (strategic defaulter) for eating the cheeseburger when the dog owner (banker) stepped out for a smoke or would you instead blame the dog owner who enabled their behavior?
“My purchase is going nowhere because she is several years behind on her condo assessments and property taxes and now no one wants to pay them. ”
You cannot place blame on the dog (strategic defaulter) for the incentives in the rest of the system are so out of sync with economic reality to prevent you from closing.
You would also have to assign blame with the other parties involved who do not have an expeditious process in place for dealing with things such as these.
She gambled big with the banks money and lost. That’s in the past. Its not her fault now the bank/city/HOA is too incompetent or not sufficiently motivated to resolve the situation.
Light rail is passengers; heavy rail is industrial. Metra is light rail but shares the track with heavy rail which for example my Metra line is called Union Pacific Northwest.
“OK – I get it now – this is where the anger is coming from. Remind me, though did I say on this thread how much richer I was than anyone?”
My memory is longer than a single thread. No anger or resentment here…just bemusement at the fact that you feel your economic status entitles you to more or less consideration on these boards.
“Anyway, my anger was caused by immoral people just considering the financial aspects of their decision. Seriously, you know grandma is getting up there in age and is going to cost me a lot of money – is it “financially savvy” to push her down the stairs or inject her with KCL? TftinChi, would you be impressed by my financial prowess in avoiding my financial obligations to her!??!! Sorry to use such an example – but you obviously don’t get it – IT ISN’T JUST ABOUT MONEY!!!”
Pushing grandma down the stairs? Criminal (you are abusing the rights of another person). Breaking a contract that is unfavorable to you? Unethical, possibly (you are abandoning an agreement and the other party has recourse under the law). There is a distinction. And remember that often times, the other party we are discussing is a business, not an individual. Businesses routinely take unethical and even criminal actions, knowing that the profits to be had outweigh the repercussions. If I know that I am under contract with an entity that looks at me in terms of dollars and cents without regard to ethics and criminality, why in the world should I be concerned if my actions against that entity are unethical?
Personally, I’d like to see a more level playing field in how we treat wrongdoing, breaches of contract, etc. when the transgressor is a business versus an individual. But as long as the playing field is skewed so heavily towards businesses, I don’t blame individuals for exploiting laws for their personal gain.
HD, light vs. heavy has nothing to do with passengers versus cargo. The terms are confusing and IIRC are defined by the number of passengers the trains can handle. Think streetcar vs. El car.
“Light rail is passengers; heavy rail is industrial. ”
This is incorrect. See this:
http://www.fta.dot.gov/documents/Rail_Mod_Final_Report_4-27-09.pdf
CTA is heavy rail, NYC subway is heavy rail. Metra is probably properly categorized as “commuter rail”, but I’m unclear on the “why” for a category that could combine light & heavy and depend on the route served, rather than the equipment (which is definitely heavy).
Gee whiz. Usually we’re just arguing on here about rent vs. buy, ELP vs. every place else, and occasionally monetary and fiscal policy. Today the regulars are tackling the distinctions among various types of rail-based transit, as well as the age old ethics and law debate of the sanctity of contract vs. rational breach. Somebody send a link to this thread to C. Fried and R. Posner for their two cents on the latter dispute.
Milkster: your scenario sounds a lot like fraud to me. As disgusting as her behavior may be, you have to admit that it is a lot different than a holder of a single underwater mortgage defaulting. Even if you consider them both unethical, in one case you have intent, in the other you don’t. Also, who in the heck was lending money to that person? Whoever it was, they were BEGGING to be defrauded…
“As disgusting as her behavior may be”
This may or may not come as a surprise to you but there are probably at least a thousand people in Chicago in a similar scenario. I occasionally stumble upon them when looking at a property then see their name associated with many other properties.
There are a lot of stuck former aspiring RE barons out there. And good luck proving to a jury that there was fraudulent intent there. In fact good luck even getting a prosecutor to bring a case or a grand jury to indict because there is no smoking gun with these people.
Clio’s anger at defaulters or even TftInChi’s anger at failed RE barons is misplaced. The fault and anger should lie in those who enabled this behavior: those making the loans.
why are we splitting hairs here? If you are in a distressed situation it is because you took a risk and it didn’t pan out. If you’re flush your situation did pan out. This is why we have contracts – so there is recourse when one side bails. The banks are not evil, the home owners are not evil we are all just executing our sides of contracts. Some people are not apt to live up to their committments, this is why we have credit scores etc. Some people don’t check/care about these things and enter into contracts with “deadbeats” losses happen. Let’s all get over it.
Bob: no anger here. And I agree that there is little chance of proving fraud, as apparent as it may be to you or I. Also:
“Also, who in the heck was lending money to that person? Whoever it was, they were BEGGING to be defrauded…”
The lendors get little sympathy from me. They were too busy raking in easy profits to see that the loans they were making were garbage. The worst part is that most of the folks responsible for writing the loans were able to pass off the risk of those loans to other parties through bundling. Seriously, we are supposed to feel sorry for these guys?
“Also, who in the heck was lending money to that person? Whoever it was, they were BEGGING to be defrauded…”
Hi TftInChi –
The first couple of mortgages were through WaMu. The last one was from BankUnited.
I’ve been looking at a ton of short sales over the past year and a half. Most people bought with very little money down. Many borrowed on top of the price of the home. It’s VERY common. I’ve seen cases where the buyer put $100 down to buy units priced around 165K, went into short sale and have been living rent free for ages. I looked at a SFH recently where the buyer put $900 down on a 180K purchase price, proceeded to do a “renovation”, ran out of money and totally destroyed the place. It’s now a teardown. You can’t do anything with it. It’s a rotting eyesore and very unfortunate for the neighbors. I’ve seen buildings which are almost vacant except for 1 or 2 or 3 occupied units all over Albany Park and Mayfair.
I don’t think you can just blame the banks. These people made the independent decision to buy. It’s a free country.
Bob you are right – but they don’t have a face and so it is easier to blame the “defaulters”.
TftinChi – my problem with your comments was that you make it sound almost heroic and smart to stop paying your mortgage. This is not right, good, morally/ethically/socially acceptable. If you can’t understand this simple point, you DO need guidance. God – it’s not that hard to understand.
I understand the point you are making, but I disagree with you. The fact that you cannot accept that disagreement and instead say that I need “guidance” because I disagree with you is very telling.
I do think a logical and coherent argument can be made against my points…I just don’t think you are making it (so much as blustering, name calling and belittling). I think Milkster’s points are certainly worth considering. Or, for a more high-minded debate than can probably be had on CC, check this out:
http://www.concurringopinions.com/archives/2010/09/two-views-of-contract-law.html
We aren’t the first to be debating this subject, as annony pointed out…
“The banks are not evil”
It could be argued they are. Many saw this crash coming and hedged their positions (ie: GS). Some even at the same time while advising their customer’s to buy the same securities they were taking the other side of the trade on.
The management structure of large banks fostered a culture of short-term gains at the expense of long-term pain. Had it been smaller banks who had no securitizing option you can bet damn good & well the loan quality would’ve been much higher.
The truly sad part is those same banks were bailed out by our government when a financial panic set in due to the condition they brought their organization to.
“I understand the point you are making, but I disagree with you.”
TftinChi – I think this statement is more telling of your personal moral value system – scary to think there are people out there like you.
“comparing east lincoln park to something on lill or wilton is like comparing kenilworth to glencoe or wilmette. All are great places but are not the same.”
Not true — Oone thing is the same. In 1982, Clio the kid gets made fun of equally at Central, Sears or West.
It is really fun to pick on the rich Harvard/Stanford/UofC educated guy here, right? To all you parents out there – don’t bother sending your kids to good schools – this is the type of response they get (and no, it is not because of my personality, etc. – seriously, this is what it is like – jealous people thinking it is ok to bash successful people).
Think of another example: the pretty girl that has sex in high school/college. Although everyone else is doing it, she gets called a “slut” – why is that?
Here is another real estate example: Donald Trump, successful business and real estate guy branches out into vodka and gets a neighborhood to ban stores that sell his brand – ridiculous!!!
Here is yet another example: Barack OBama works his butt off and achieves so much in his lifetime but gets so much criticism (some warranted some not)
So , be happy with your kids and pray they don’t become rich and successful – it truly is lonely at the top.
Clio is completely absurd – he’s not really, he’s just a character. Nobody says or believes ridiculous stuff like this. The irony is palpable, and quite hilarious, actually. At first I thought it was annoying but now that she’s been laying the shtick on thick, it’s totally hilarious. My character is nowhere near as hilarious as clio. The Lambo driving successful dude in Oak Brook who posts that real estate always goes up in the long run. And is sleeping with and paying for his secretary to live in his condo downtown. amazing stuff, i wonder if he makes it up as he goes along. This is comedic gold I tell you , it just keeps coming.
Don’t believe everything you read on the internet people.
“So , be happy with your kids and pray they don’t become rich and successful – it truly is lonely at the top.”
Clio: as hard as it is to believe, the criticism you get here has nothing to do with your success, which schools you attended, your work ethic, etc. It is 100% about your behavior and attitude.
I’m all in favor of fake internet personas. Character development has its place in imaginary communities like this.
“This is comedic gold I tell you , it just keeps coming. ”
He is an epic fail compared to our dearly departed friend, Steve Heitman. I truly do miss him some days. I really wish he would’ve stayed around for the play-by-play of this RE collapse, but alas, as they say the victors write the history books. lolz.
you guys have almost everything wrong: from my profession to my sexual preference – this site is not about me – it is about real estate. Let’s stick to the subject.
Didn’t you get the memo? The internet is serious business
Bob – you are just mad because I said LA girls don’t like you because you may not be as good looking as the guys they are accustomed to dating – come on, if you dish it out, you have to be able to take it.
Bob: What about those who forced the people to make the loans through misguided policies?
“Bob: What about those who forced the people to make the loans through misguided policies?”
Noone forced any bank to make any loans. If you’re referring to the CRA it was a very minor segment of the market and largely not what brought down the financial system.
If you’re talking about Fan & Fred they didn’t force banks to adhere to any sort of criteria: they only stipulated criteria of loans they would purchase from said banks. At the end of the day it was the greed of the bankers.
“Noone forced any bank to make any loans. If you’re referring to the CRA it was a very minor segment of the market and largely not what brought down the financial system.
If you’re talking about Fan & Fred they didn’t force banks to adhere to any sort of criteria: they only stipulated criteria of loans they would purchase from said banks. At the end of the day it was the greed of the bankers.”
This is all fact.
YOu can’t change up your character in the middle of a script! That’s like Stella changing her name to Romeo halfway through the play. Not allowed.
“#clio on December 21st, 2010 at 3:56 pm
you guys have almost everything wrong: from my profession to my sexual preference – this site is not about me – it is about real estate. Let’s stick to the subject.
“
There was an interesting discussion about all of this on the Freakonomics blog a while back. Good reading:
http://freakonomics.blogs.nytimes.com/2009/02/09/our-daily-bleg-a-real-estate-dilemma/
I particularly like this guy’s characterization of the problem. A lot of people are ignoring the fact that contracts are very clear about what happens when you breach the terms. Enjoy…
Bank: OK, here’s the deal. You pay us, over the course of 30 years, about twice the value of the house. We’ll pay for the house now.
Buyer: Uh. That doesn’t sound fair. You’re getting alot of money for nothing.
Bank: We’re doing something. We’re buying risk from you. You’ll stay in the house but you get to pay us over time. We’re buying the risk that you might walk away.
Buyer: OK fine. What else do I have to agree to?
Bank: You have two options in the contract. #1, Pay us on time each month or #2 stop paying and we get the entire house, including any equity you’ve built up.
Buyer: You mean if I miss payments you can take the whole house and I don’t get anything for it? Even if it’s worth more than when I bought it?
Bank: Yep, that’s the deal, take it or leave it. OH and it will cost you $10000 on top to buy the lone
Buyer: Fine. I’ll take it, but I feel like I’m getting ripped off.
Bank: Heh. Sux to be you.
Buyer: I’ll take option #2
Bank: Excuse me? Do I know you?
Buyer: Can’t answer that one. But I’m taking option #2 in my contract. I’ll stop paying and you can take the house.
Bank: I don’t want your house! It’s not enough to cover the cost of the loan in your contract?
Buyer: Sux to be you. Here’s the keys.
HD – just trying to keep it real. I never disclosed what I did for a living or what my sexual preference was – both of which you got wrong.
“oh – for all of you with big eyes thinking about stopping payment because you can “live free” for a little over a year – stop that thinking right now!! Foreclosure is a terrible thing to go through – it can and will mess with your relationship, self-esteem, pride – you will become increasingly anxious, unsettled, depressed. Then the feelings of guilt and self-doubt come in. Every time you look at your wife/SO, you will feel like a worthless man – unable to provide shelter for your family, etc. Your kids are embarrassed of you., etc. This is psychologically devastating and something you will never forget. Then, of course, there is the financial aspect – your credit is ruined forever – even if you qualify for a mortgage in 8 years, you will be paying a much higher rate than anyone else. In the meantime – just try to get a rental – many places will not rent to people who are going through/have gone through a foreclosure. All in all, it is not a great thing at all -”
This sounds like a divorce, not breaking a contract.
Hey Clio, note that TftInChi has been throwing a fair amount of firepower at you, nearly all of which is coming from folks who either attended or teach at (or both) one or more of your prestigious alma maters.
TftInChi,
Even more insidious is that the bank creates from nothing the money it loans you to buy the house – literally, creates it the money from thin air, – it’s just zeros and ones in a computer – and when you stop paying, they get the house back.
Of course in this market they would rather have the money than the house but it’s a great deal for them either way. and then in some states they can come after you for the deficiency! It’s good to be a bank!
anonny, I doubt anyone even remotely associated with the schools I attended would particpate in such a ridiculous discussion/thread. I only do it because I like to “keep it real” and mix with normal people.
“#1, Pay us on time each month or #2 stop paying and we get the entire house, including any equity you’ve built up.”
Incorrect. Bank is only entitled to amount owed on the mortgage plus foreclosure/legal fees. If a home owner owned 90% of the equity in their house and then defaulted they would be entitled to whatever was left after the foreclosure sale less what was owed the bank (amount left on mortgage plus repossession & disposition fees).
I believe bank does get to keep the gains from appreciation in the event of a default & subsequent sale but that makes sense as they technically hold the deed until the mortgage is paid off. In actuality this rarely happened during the boom as people could just use the house as ATM strategy to extract equity to keep current on payments. The ponzi scheme works so long as the underlying asset’s values are rising.
Moral outrage regarding strategic defaulters on home mortgages is interesting in its bias. Commercial real estate developers don’t face “ethical dilemma” discourse when they default on their construction loans, when their “upside-down” building returns to lenders, having already cashed-out their sizable development fee. These loans don’t always have personal recourse clause. Said developers don’t scurry away in shame. Spend some time in Crains’ archives and you’ll find downtown high-rise developers who have defaulted, yet still find lenders to finance their next project.
“Even more insidious is that the bank creates from nothing the money it loans you to buy the house – literally, creates it the money from thin air, – it’s just zeros and ones in a computer – and when you stop paying, they get the house back. ”
It doesn’t create it from thin air. It is backed by a certain amount of reserves. I believe for every $1 in deposits they can lend out $10 in loans, unless the reserve requirement ratio was changed since I was in undergrad.
Fractional reserve lending makes sense from a macro standpoint in terms of tying productivity to something other than a relatively fixed supply (gold). If currency were backed by gold you’d have thousands upon thousands of gold mines with no real economic benefit other than that’s what it is tied to. With an ever-expanding population and a fixed amount of precious metals like gold it would mean our currency would have to be constantly devalued or we’d have mines dotting the landscape.
However fractional reserve lending along with the Fed’s control of the money supply with almost no oversight does indeed concentrate far too much power into the hands of bankers, IMO.
“Moral outrage regarding strategic defaulters on home mortgages is interesting in its bias. ”
I believe it reverts back to 1)a quality of simian’s and hominids concept of fairness and 2) affecting them personally.
1) Most people can’t conceptualize being a competing RE developer and being outraged at a competitor strategically defaulting. But they can conceptualize their next door neighbor, who they may treat as a comp to their own situation taking the “easy way out” and walking.
2) Next door neighbor defaulting could have a large adverse impact on their own piece of real estate via setting a new, lower comp, thus affecting them personally.
Bob,
It’s sort of a new concept but loans come first, then reserves are borrowed later. No banker actually counts his reserves before making loans. They can borrow the reserves at the discount rate or on the overnight interbank market for far far less than the interest they make on the note. Banks accept deposits not so much for reserves but to have captive customers to cross-sell and of course their much hated fees. FEes for this, fees for that, fees for everything.
Make loan, borrow reserves.
What made it even easier was securitization because the banks lent with other people’s money, made fees, then absolved themselves of liability once the note was out of their hands…no need to spend money borrowing reserves..
“they should use the system to their advantage whenever possible, just like the big players do. And yes, that means walking away from agreements when it is clearly in their economic interests to do so”
It is time for people on both sides of the aisle to work together. If the individual signed up for the loan they have a clear obligation to live up to the contract. If the bank truly wants to avoid owning the home in question then they must get creative to help the borrower make sense of the current situation when possible.
“The fault and anger should lie in those who enabled this behavior: those making the loans”
They were not driving down the street offering candy to 5 year olds. They were lending money to individuals with a contract. Short and sweet it was exactly what they signed up for and like it or not they may have to live with the consequences.
Clio does have some valid points about teaching children how to make responsible decisions in life and honoring commitments. Americans sure are extremely shallow and lacking in character lately.
living in a banana republic will do that.
“Americans sure are extremely shallow and lacking in character lately.”
Gosh – after reading all these posts again, I have to say that the anger and animosity directed towards me HAS to be more about WHO I am rather than what I actually said. I truly feel bad that people here cannot recognize that – I also realize that I am wasting my time/energy on this site having a discussion/debate with negative nellies who think they know everything about the world and consistently and constantly insult me?. This is a really negative site and, although I still love and believe real estate is awesome and I am addicted to it, I can am beginning to realize that my opinions/observations are not taken seriously. Oh well, probably for the best – you guys obviously know it all – that is why you have been so successful in real estate, I guess.
I seriously hope I am able to stay away from this site.
“Oh well, probably for the best – you guys obviously know it all – that is why you have been so successful in real estate, I guess.”
Most of us negative nellies have actually been more successful in real estate than the vast majority of people who purchased during the 2004-2009 timeframe. Not throwing your hat into the ring of an obviously fixed game (govt intervention?) is the smart move.
Haha no more stimulus for your RE cheerleaders. No more bailouts for cracky.
Clio have a beer or two, spin some donughts at obt mall lot in the lambo, and show up on Wednesday like usual. Oh and stop worrying what others say about your opinions. You are an outlier but that’s ok.
Who knew that a boarded up house in Lakeview could provoke such an outpouring of responses?
Yes- please DO try to keep it to real estate. And don’t call each other names. It’s the holiday season, after all.
i think clio did the boycott thing a few months ago,then came back a couple days later.i’m betting he’s back thursday.
Well- If you all chased him away- it’s your own fault.
wow missed a good discussion; props to anon for keeping rail terms striaght
the difference for rail service seems to center around the equipment, how the rail-line was constructed, and frequency/load as well.
so metra is commuter b/c its infrequent?
the property will be taken for land value; cause no o/o could buy it unless they had cash
The “negative nellies” are those who want the bubble reinflated. Didn’t that do enough damage already?
A return to sustainable housing prices is necessary for any hope for a healthy and productive economy. This is a positive, not a negative.
“so metra is commuter b/c its infrequent?”
Based on the Federal Transit Admin’s discussion, it appears to be b/c it serves primarily suburban locations and terminates in/near the CBD. Which I think is pretty outdated, but changing that is turning a moving train.
true anon the suburban spoke and wheel with zoned fares, but the frequency of trains(maybe its sharing with freight) is a big difference between CTA and Metra and why its probably classified differently
“true anon the suburban spoke and wheel with zoned fares, but the frequency of trains(maybe its sharing with freight) is a big difference between CTA and Metra and why its probably classified differently”
Yeah, that too, but I’d lean toward the use of a fixed schedule of departure times as the most likely distinction.
Not to distract from the crazy flame war, but back to the property itself: I believe this was burned out and being sold as a tear down.
From http://www.urbanrealestate.com/property/1114-W-Roscoe-CHICAGO-IL-60657-3LCIQRDUM4X3M.html
“Roscoe Village Lot ready to build – zoning is R4. There was a 3 flat on the property that is burned beyond fixing – tear down only. The property is being sold as is – Bring Your Offers! Perfect location!”
Under contract-in fact it’s pending. Let’s see what it closes for….
Redfin says: $305k.
http://www.redfin.com/IL/Chicago/1114-W-Roscoe-St-60657/home/13381167