The House just passed this strange law that would allow those filing Chapter 7 bankruptcy to keep $3000.00 in rifles, pistols and shotguns. It’s estimated that this would affect about 1000 people yearly. But it makes the NRA happy in an election year. Not cool.
Monthly Archives: July 2010
FHA may tag Strategic Defaulters with Scarlet S for life
Okay, foreclosures are up 95% this year in Palatine, the town where I live.
The high foreclosure rate in Palatine is because there are a lot of condos here. Many condos were purchased around or after the peak in June 2006.
I would bet that more than half of those condo foreclosures were “strategic defaults” meaning the buyer could continue paying, but chose to walk away from the property. In talking with clients it’s clear that no one defaults on their mortgage without a lot of thought, lack of sleep and anxiety. People care about their property and their credit rating and don’t just decide to descend into a foreclosure for the fun of it.
The lending industry is pressuring Congress now to discipline homeowner’s who have committed the sin of strategic default by limiting their ability to get a mortgage in the future. This excellent post by attorney Steve Beebe explains that Fannie Mae is trying to prohibit those who walked away from their home from getting a new mortgage for 7 years.
Worse yet, a new law being proposed and already passed by the House, called the FHA Reform Act, would prohibit strategic defaulters from getting any FHA mortgage in the future. Most homeowners who go through a foreclosure try to get an FHA mortgage two to five years after their foreclosure because FHAs have a low 3.5% downpayment and relaxed credit requirements of around 640 FICO.
It’s absolutely insane to ban people for life from getting an FHA mortgage.
First, how does one define strategic default? I don’t think lenders should be allowed to decide which unworthy Hester Prynnes get tagged with the scarlet “S” for strategic defaulter.
Second, the government, other than the tax credits that just expired, has done nothing to help the homeowners in or near default. The HAMP loan modification program is considered a joke and a failure.
This is really all about lenders trying to quell the non-stop wave of foreclosures by intimidating current mortgage holders into keeping, and not defaulting on, their homes, many of which are worth far less than the mortgage amount.
Watch mail for Cook Co. suburban tax reassessments
Every three years, Cook County does the triennial reassessment of real estate tax bills.
Notices were just mailed to Barrington township. Evanston township notices were mailed July 15, 2010 and Barrington on July 8, 2010. These will be followed shortly by notices sent to other northwest suburban townships like Palatine, Schaumburg, Wheeling and Elk Grove.
Why does this matter?
Because this will be your only chance to protest your taxes for the next three years, that’s why.
The key thing here is to watch your mail for the reassessment notice because you only have 30 days from the date the reassessment notice is sent to protest your assessment.
The new assessments will affect the 2010 tax bill issued in the Fall of 2011.
Getting credit after bankruptcy
How to rebuild credit after filing a chapter 7 bankruptcy. It can be done.
Tax credit extended to September 30
Congress finally approved an extension of the first-time and move-up buyer tax credits ($8000.00 and $6500.00 respectively) to September 30, 2010. This only applies to those who already signed a contract by April 30, 2010.
I have very few clients who will be affected by this.
I guess it’s good to help out those unfortunate souls who got sucked down some mortgage underwriting vortex and ended up with delayed closings.
I will so miss the tax credit. I loved the credit with all my heart. It was an awesome, effective stimulus to a dead real estate market. The problem is how do we live without it?