Jack's Blog

2009 Foreclosure Data: Impact on 5 Counties in Illinois

Jack Lewitz (Jack A. Lewitz) — Sat, 05 Dec 2009 13:31:17 -0600

On Wednesday December 9 and Thursday December 10, 2009 I will be attending a Mortgage Foreclosure Conference in Chicago. This event is being sponsored by The Federal Reserve Bank of Chicago, The Chicago Community Trust, John D and Catherine T. MacArthur Foundation, Neighborhood Housing Services of Chicago, and the Woodstock Institute.

The conference event is titled ” Mortgage Foreclosure Policy: Past, Present, and Future”. The conference will discuss the evolution, current impact, and likely outcomes of foreclosure on homeowners, lenders, housing counselors, secondary mortgage market, and local governments.

As I prepare for this conference I decided to do a little review of the foreclosure market from a point of view as a realtor. I decided to do research on five counties ( Cook, Lake, McHenry, Dupage, Will, and Kane) in Illinois. I plan to bring along and discuss this data at the convention.

The information is deemed to be reliable and comes from both my local MLS and Record Information Services of Illinois.

Single Family Home Sales data from January 1, 2009 through December 3, 2009:

County	Total Sales	Total # Foreclosure Re-Sales	Total # of Short Sales	Distressed Sales expressed as % of Total Sales
Cook County	20,730	6,761	2,098	43%
Lake County	4,362	1,073	459	35%
McHenry County	2,023	451	307	37%
Dupage County	4,865	782	527	27%
Will County	4,409	1,170	529	39%
Kane County	2,973	671	414	36%

The table above shows foreclosures are dominating the Real Estate Market in terms of total sales. Foreclosures out number the number Short Sales in every county.

Single Family Foreclosure from January 1, 2009 through December 3, 2009

County	Total #of Foreclosures	Total # Foreclosure Re-Sold	Remaining # to be Sold
Cook County	12,553	6,761	5,792
Lake County	1,841	1,073	763
McHenry County	1,243	451	792
Dupage County	2,368	782	1,586
Will County	3,095	1,170	1925
Kane County	2,368	671	1,697

The table above is showing total number of foreclosures in each county and then subtracts the number of foreclosures put back on the market and re-sold to new buyers and the number of remaining foreclosures unsold to date. As the data suggests there are more foreclosures that are going to be coming onto the market for re-sale.

Single Family Pre-Foreclosures from January 1, 2009 through December 3, 2009

Cook County	Total # of Pre-foreclosure Notices	Total # Unsold Foreclosures	Total # Potential Foreclosures 2010	Total# Home Sold in 2009
Cook County	23,629	5,792	29,421	20,730
Lake County	3,344	768	4,112	4,362
McHenry County	2,123	792	2,915	2,023
Dupage County	3,758	1,586	5,344	4,865
Will County	4,984	1,925	6,909	4,984
Kane County	4,008	1,697	5,705	2,973

The Table above shows the number of homes who have received some sort of Pre-foreclosure Notice.

Typically a homeowner has to be 90 days past due or delinquent on their mortgage to receive such Notice of Default (NOD).

While many of these homeowners may be trying to modify their mortgage with their lender and never go to foreclosure there are many homeowners unable to modify their mortgage because they are unemployed.

As the data suggests if these pre-foreclosures do become foreclosures and are added to the already unsold foreclosure on the market the combined total will exceed the total sales of single family homes for 2009.

As a realtor it is difficult to see how the real estate market is going to keep pace with the number of foreclosures. There isn’t enough buyers out there to absorb the number of homes that could potentially come on the market in 2010.

How the Real Estate Market 0f 2009 Affected One Middle Class Community.

Jack Lewitz (Jack A. Lewitz) — Tue, 01 Dec 2009 16:41:33 -0600

I decided to write about one particular middle class community. This community is a microcosm look at the 2009 real estate market. As we look back at the year we will notice some challenges this community faces.
These challenges are not unique to this community but emphasize the struggle most communities struggled with in 2009.

Community Facts	Most Recent Statistics
Number of Residents	12,359
Number of Households	4,343
Percent Owner Occupied	92%
Median Family Income	$83,657
Average Home Price 2009	$394,767

The information above provides the basic information on a typical middle class community. The name shall remain anonymous for many reasons. The name is not important, what is important is how a typical middle class community is being affected by foreclosures.

2009 Real Estate Market (Information is deemed to be reliable and comes from the MLS)

Sales Type	# of Active Listings	# Pending Sales	# of Single Family Sales
Totals	101	25	88
Short Sales	14	7	11
Bank Owned	3	0	22
% Distressed	17%	28%	38%

As we can see from the table above 17% of all active listings are either Short Sales or Bank owned properties and foreclosures represent 38% of all sales during the last year.

According to Record Information Services, a Real Estate Service that searches public information and tracks foreclosures in all counties in Illinios, there were 42 homes in this community that went into foreclosure.

Only half of these homes 22 have come back on the market and have re-sold according to the MLS. Another 20 homes are waiting to come on the market.

If all of these foreclosures were to enter the market at the same time the number of Active Foreclosures would increase from 17% to 30% of all Active listings.

What affect does this number of foreclosures have on a middle class community?

Well it will definitely bring down prices of homes. According to the MLS the average sale price of a home has declined 15% in this community in 2009.

What will the outlook be for 2010? We will just have to wait and see…

What Should You Do When You See A Fellow Realtors Name Appear on A Foreclosure List?

Jack Lewitz (Jack A. Lewitz) — Tue, 01 Dec 2009 12:08:37 -0600

What should you do when you see a fellow realtors name appear on a foreclosure list and you notice they have the property listed for sale with the proper disclosure of being owned by a realtor but not be marketed as a pre-foreclosure Short Sale?

As a realtor who specializes in Short Sales and Foreclosures I realize that not all realtors are alike nor do they possess the knowledge to be successful in marketing, negotiating, a short sale particularly when they are a principal in the tranaction.

So what do you do. Do you call the agent or not? That is a dilemma I am currently faced with and I am pondering over my decision to call or not call the person.

I know as a Realtor we are no different than other sellers who are faced with the decision to sell a home rather than go into foreclosure.

So how do you reach out to someone who is a professional like yourself and offer advise if nothing else. I feel kind of compelled to help but should I stick my nose where it should not go?

Something should be done and done with some tact but I find the more I work with sellers and buyers in this market there only a handful of people who you can really help. Some people refuse to listen, accept the help, or in denial.

Its almost as if you have to go through the stages of loss according to Kubler-Ross. First stage is anger and then acceptance. Those people who are willing to accept the loss of a home can be helped, while those who remain angry, can never be helped.

Anyway, I have gone off a little bit and want to get some opinions from people about what they would do in this situation?

The Home Builders Association of Greater Chicago Files for Chapter 11

Jack Lewitz (Jack A. Lewitz) — Wed, 25 Nov 2009 14:14:00 -0600

The Home Builders Association of Greater Chicago has filed for Bancruptcy Protection”, according to Chicago Crains magazine.

The Home Builders Association has about 500 active members but is down from 1,500 members at it peak. The recent Chapter 11 Bankruptcy filling is just another example of how bad the housing market has been for home builders.

The Home Builders Association is supported by membership dues and other programs but was forced to file for Chapter 11 when it could not meet certain obligations. Currently the association has assets of $100,000 to $500,000 and liabilities of $1,000,000 to $10 million, accordign to Chapter 11 petition filed in U.S. Bankrutcy Court in Chicago.

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Searching for Commercial Foreclosures is easy....

Jack Lewitz (Jack A. Lewitz) — Wed, 25 Nov 2009 13:47:46 -0600

As part of our goal to become the “Number 1 Source forInformation about Illinois Foreclosures” we found it necessary to include a heading for “Commercial Real Estate”. http://www.ilrealestatespecialists.com

The process of searching for Commercial Real Estate Foreclosures is simple.

Go to Active Listings tab on the home page.
Register by typing email address and create password (skip this if already registered)
Go to Search Property Type and Press “Commercial Listings”

A Little Reminder for Thanksgiving.. You Are What You Eat....Happy Thanksgiving..

Jack Lewitz (Jack A. Lewitz) — Mon, 16 Nov 2009 11:50:40 -0600

Life after a Short Sale...

Jack Lewitz (Jack A. Lewitz) — Mon, 16 Nov 2009 09:36:02 -0600

As realtors we often talk to past clients to see how things are going and I wanted to do the same with some of my Short Sale Clients.

Following is an email I recently received from one such client..

Hi Jack,

Things are actually going pretty well for me. “The Short Sale was the best thing that happened ” .

I am living in my own apartment with my dog in the city. I had a hard time buying a new car because of my credit not my income but my family was able to give me a loan and I am paying them back.

I don’t have any major debts, outside of a student loan and Ihave a comfortable life within my means. Overall, things are as they should be.

I will definitely pass your name if given the opportunity.

Good luck with the blog and I hope you have an enjoyable Thanksgiving…

It May Look Like Steak but it Tastes like Beef Jerky .. 'Deed for Lease Program'

Jack Lewitz (Jack A. Lewitz) — Mon, 09 Nov 2009 18:01:35 -0600

Fannie Mae announced a new program on Thursday that may look like steak to some but taste like beef jerky. The program is called ‘The Deed for Lease Program.

‘The Deed for Lease Program”is a temporary solution to the foreclosure problem. The program is for homeowners who DO NOT qualify for a loan modification program but DO NOT want to move from their home.

In this program the borrower voluntarily transfers the deed back to the lender and the lender rents back the home to the borrower at Fair Market Value or no more than 31% of the borrowers gross monthly income.

Doe this sound familiar. It should because the 31% is also used as the criteria for the Home Affordable Modification program (HAMP) program. If Borrowers did not qualify for a home modification program why would anyone think the lender would now rent the same home to some who has defaulted on their mortgage and would not be considered a good candidate for a new loan.

There seems to be a flaw in logic to this plan. It may look like steak, smell like steak, but it taste like beef jerky…

HAS THE REAL ESTATE MARKET HIT BOTTOM?

Jack Lewitz (Jack A. Lewitz) — Wed, 28 Oct 2009 09:52:51 -0500

I read an article in the Chicago Tribune business section “Housing Market hits ’some kind of bottom’”.

In the article it sited a recent study by The Standard & Poor’s/Case Shilling Index of home prices in 20 metropolitan areas.

According to this study, home prices have showed a 1% increase in seasonally adjusted median home prices. The conclusion based on this study is that the housing market is at or close to being at bottom.

The article did point out that there were some sub-markets still struggling like Las Vegas, Charlotte N.C., Cleveland, and Phoenix. All of these cities are struggling with foreclosures.

But in general most markets were improving and the number 1 reason for the improvement was the Federal Governments First Time Homeowner Tax Credit of $8,000.00. The tax credit brought new home buyers out into the market and these buyers took advantage of lower home prices and low interest rates and began purchasing homes.

The conclusion of the article was ” The fundamental story is that housing got way too expensive, and now you could argue that housing is cheap again, and that is what it boils down to in 50 words or less.”

Are we to take this last statement for what its worth as fact. I think that this a simple answer to a very complicated situation. I have heard these arguments before like ” Too Big to Fail”, or ” The market will Correct itself” and I think they all have some major flaw. They generalize a problem to 1 simple answer and that is a problem in itself.

I have learned that Real Estate can not be viewed on a global level. Real Estate prices and values are based on sub-markets. These sub-markets can be from block to block.

Real Estate is based on Supply and Demand. If there is an over supply of property then price of a home will go down.

Real Estate is based on supply of money. When interest remain low then buyers can afford to buy.

If the Real Estate market relied on “Cheap Prices” as the article suggests then I guess we would all be millionaires by investing in Real Estate.

Lets not fool ourselves. We cannot predict when the market will hit bottom.

Is there A Relationship Between Foreclosures and Unemployment?

Jack Lewitz (Jack A. Lewitz) — Tue, 27 Oct 2009 18:35:24 -0500

Is there a correlation between the number of Foreclosures and Unemployment. Can we assume that those States with more unemployment will have more Foreclosures?

Below are the ranks for the Top 10 Foreclosure States according to Realty Trac. Illinois is listed as 10th by Realty Trac but other poles show Maryland as 10th and Illinois slipping to 12th.

1 out of every House Holds (HH) is the number of family households that has received a foreclosure notice. This information came from a recent CNBC poll.

The unemployment data comes from the Bureau of Labor Statistics.

From the data we can understand why Michigan is listed as number 1 in terms of unemployment with the loss of jobs from the automobile industry in Detroit by why are they ranked 8th in terms of unemployment. Will there be more foreclosures in Michigan due to the high unemployment?

Nevada is Ranked number 1 in Foreclosures and Number 2 in terms of unemployment. These statistics make sense.

Yet Rhode Island which is ranked 3 in terms of unemployment at 13% does not even make the top 10 list in terms of Foreclosures. What is Rhode Island doing that other states are not?

In contrast Utah which is 6th on the list of states with the most Foreclosures (1 out 251 households) has the lowest unemployment rate at 6.2 %.

It appears the statistics are inconclusive when it comes to a coorelation between State Rank in Foreclosures and Unemployment Rate.

Foreclosure Rank	State	1 out of every # of HH	Unemployment Rank	State % Unemployment
1	Nevada	1-59	2	13.3%
2	Arizona	1-179	22	9.1%
3	Calif	1-154	4	12.2%
4	Florida	1-158	8	11.0%
5	Idaho	1-250	26	8.5%
6	Utah	1-251	51	6.2%
7	Georgia	1-265	14	10.1%
8	Michigan	1-270	1	15.3%
9	Colorado	1-342	39	7%
10	Illinois	1-363	12	10.5%

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Thank You Betty....

Jack Lewitz (Jack A. Lewitz) — Mon, 26 Oct 2009 21:39:09 -0500

I want to thank Betty Cunningham of Re-Max for contributing two blog articles for my website.

I recently received an email from Betty and she was enthusiastic about networking with other realtors and learning more about how to become a Short Sale and REO specialist.

After talking with her and telling her about my own website and how i wanted to work with other realtors and help them promote their business we planned a date to meet.

As a member of Active Rain and already a blogger, it was easy for her to write two blog articles for me"

"Is On Line Bidding a New Trend?" and " Family Searches Web for Help"

Thank you Betty for the article and I look forward to networking with you or anyone you may know that I do not know.

If you are an Illinois Realtor and are doing Short Sales, REO or BPO's and would like to network and learn from others doing what you do then please visit my website at : http://www.ilrealestatespecialists.com.

I look forward to working with you. Remember there is enough business to go around for everyone.

The Scariest Mask This Halloween....

Jack Lewitz (Jack A. Lewitz) — Sat, 24 Oct 2009 20:02:21 -0500

Happy Halloween... Happy Halloween... Happy Halloween... Happy Halloween

Have You Paid Your Cook County Real Estate Taxes?

Jack Lewitz (Jack A. Lewitz) — Thu, 22 Oct 2009 09:18:40 -0500

Have you paid your Cook County Real Estate Taxes?

No! Because Residents of Cook County have not received the second installment of their Real Estate Taxes for the 2008 Tax Year.

Taxes in Cook County are paid in arrears. That means taxes paid in 2009 are for the 2008 tax year.

Taxes in Cook County are paid two times a year. The first installment is due in March and the second installment is due in November of each year.

As of October 22, 2009, Cook County residents have not received a tax bill for the second installment of their 2008 Real Estate taxes.

Much of the County Revenue comes from Real Estate Taxes. At a time when the County is struggling to provide services to the community it amazes me why the tax bills have not been mailed.

Cook County Facts

Quick Facts	Cook County	Illinois
Population 2008 estimate	5,294,664	12,901563
# of Housing Units 2007	2,172,658	5,246,005
# of Households 2000	1,974,181	4,591,779
Persons per Household 2000	2.68	2.63
Median Value of Owner Occupied 2000	$157,700	$130,800
Median Household Income 2007	$52,554	$54,144

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TOP 2 Reasons Why a Short Sale Never Closes and How to Prevent it.

Jack Lewitz (Jack A. Lewitz) — Fri, 16 Oct 2009 17:12:30 -0500

Here are my top 2 Reasons Why a Short Sale Never Closes and How to Prevent It.

Number 1 Reason: ” Seller Ambivalence”

Most people want to keep their homes. This is true of most sellers in a Short Sale.

During some stage in the selling process you will be confronted with what I call ” Seller Ambivalence” . ”

“Seller Ambivalence” is like “Buyer Remorse”. Seller Ambivalence and Buyer Remorse is when second thoughts appear after a commitment to buy or sell has been made.

Seller will do almost anything to sabotage the listing if they are ambivalent. If you find your seller avoiding your phone calls, making it difficult to show, or has called the lender to negotiate a Loan Modification while doing a Short Sale then you must have a talk with your Seller bccause these are signs of Seller Ambivalence.

This talk with your Seller can prevent Short Sales from not closing.

Number 2 Reason: “Wrong List Price“

Critical to any sale today is having the right price to motivate buyers. Short Sales are not immune to this and must be priced right to motivate buyers.

As an agent you must make sure you understand your market, what the BPO price will be for a Lender and understand a buyer is looking to buy a property at a price at or below market value.

The following is an example of a home I think was priced too high, did not sell, and was canceled as a Short Sale Listing.

Subject property:

This house is a 7 Room, 3 Bedroom, 2 Bath Brick Bi-Level home.

List Price: $349,900

DOM: 136 Days (Days on Market)

Cancelled Listing

Market Data:

The market data shows 6 homes sold in the area. 3 homes were Short Sales and 2 homes were Bank Foreclosures. The lowest price home sold was $195,000 and the highest price home sold was $272,500. It is my opinion that the List price for this property should have been somewhere in between the low and high price.

Having the correct list price will prevent Short Sales from never closing.

More than half the mortgage holders who get help fall behind again.

Jack Lewitz (Jack A. Lewitz) — Thu, 01 Oct 2009 12:38:06 -0500

The following article is being shared from NY Daily News:

More than half of mortgage holders who get help fall behind again, just as lenders are ramping up efforts to avoid more home foreclosures, according to a new report by bank regulators.

More than 50% of homeowners with loans modified in the first half of last year had missed at least two months of payments a year later, government officials said Wednesday.

But the results were better among those who saw their payments drop substantially.

About a third of borrowers whose monthly payments were reduced by 20% or more fell behind again within a year. That compares with more than 60% of borrowers whose loan payments weren't changed or increased.

The report on 34 million home loans highlights a significant challenge for the Obama administration's plan to tackle the foreclosure crisis, backed by $50 billion in money from the financial industry bailout fund.

The administration's effort got off to a slow start, but has picked up speed in recent months. As of last month, about 360,000 borrowers, or 12% of those eligible, signed up for three-month trial modifications. They are supposed to be extended for five years if the homeowners make timely payments.

Traditionally, most lenders have offered payment plans that allowed borrowers to catch up on missed payments. But those modifications often result in a higher monthly payment.

Under the administration plan, borrowers' interest rates can go as low as 2% for five years. Bank regulators say they have pressed lenders to shift their focus to modifications that reduced borrowers' payments.

My Comments to this article are below:

The success of any Home modifications will require lower monthly mortgage payments. Many people who want to stay in their home cannot afford the payments they have and are looking for lower mortgage payments. Unfortunately, loans being modified are not reducing these payments and therefore more people are defaulting on these modified loans. Also, there are people being offered modification programs who clearly do not qualify for this plan like those people who are unemployed. Its hard to modify a loan when you have no ability to pay? The success of any home modification plan will require the principal balance on the loan to be reduced to the "current market value"of the home. This is the only way to make the payment more affordable. Interest rate reduction and extending loan term are not enough. Finally, if the Fed really wants to help homeowners then it should guarantee the loss in the principal reductions. For example if a homeowner has a home loan worth $100,000 but the property is worth only $50,000 then the new loan should be modified at the current market value of $50,000 and the loss should be guaranteed by the Fed.

Pending Home Sales are at the Highest Level Since March 2007

Jack Lewitz (Jack A. Lewitz) — Thu, 01 Oct 2009 10:32:35 -0500

Pending Home Sales are at the Highest Level Since March 2007. Short Sales and Complex Appraisals are causing delays in home sales.

County	# of Pending Sales	# of Pending Short Sales	% of Total Pending Sales	# of Short Sales Pending 100 + Days	% of Short Sales Pending 100+ Days
Cook	5689	1058	19%	700	66%
Lake	1039	221	21%	169	76%
Dupage	1169	205	18%	169	82%
Mchenry	578	156	27%	116	74%
Will	1116	156	14%	136	87%
Kane	820	169	21%	135	80%

Summary:
Short Sales represent 14%-27% of all Pending Sales in all five counties.

66%-87% of all Short Sales are taking 100+ days to close.

Real Estate Market Viewed Through a Glass

Jack Lewitz (Jack A. Lewitz) — Wed, 30 Sep 2009 16:37:46 -0500

When it comes to predicting the state of the economy and the real estate market its like looking at a glass of water.

Is it half full or half empty?

Neither.

We are no where near a recovery nor are we at the bottom.

STOCK MARKET:

In the short run the stock market will get better before housing .

People who have lost a lot of personal wealth are anxious to make up some of that loss.

With low interest rates on CD’s, Treasuries, The Stock market appears to be half full.

REAL ESTATE

Real Estate is another story. Real estate in general lags behind other markets and with unemployment data at 10% nationally I think the Real Estate Market glass is half empty.

I predict we will see more foreclosures as more people are going to be unable to modify their loans or pay their mortgage while unemployed.

I think home prices will continue to decline because of the increase in foreclosures.

I think there will be fewer home buyers due to tighter credit, or if the First time Home buyer credit is not renewed or if FHA runs out of money.

According to the Home Builders Association there will be fewer new homes being built due to lack of credit and financing.

I would love to hear your comments….

Time is of the Essence...

Jack Lewitz (Jack A. Lewitz) — Thu, 24 Sep 2009 09:30:49 -0500

During the past six (6) months we continue to see high volume of foreclosures in all five (5) counties.
What appears to be shifting is the number of foreclosure sales versus the number of short sales.

The reason for the increase in foreclosures can be explained in different ways.

One would expect the number of foreclosures to increase when the State Moratorium on Foreclosures was lifted.

Another reason is buyers in general are not willing to wait for a Short Sale to be approved by a bank and are looking to get the best price and are opting to purchase Bank Owned properties.

County	# of Sales	# of Short Sales	# of Bank Foreclosures	% Short Sales	% Bank Owned
Cook	12,297	966	4,431	8%	36%
Lake	2,655	234	706	9%	27%
McHenry	1177	160	270	14%	23
Dupage	2,972	274	505	09%	17
Will	2563	254	758	10%	30

Short Sales Could be the Solution to the Housing Market Only if....

Jack Lewitz (Jack A. Lewitz) — Thu, 24 Sep 2009 09:12:31 -0500

Campbell Communications surveyed 1,000 real estate agents and found 19 % of all home sales during January and February of 2009 were Short Sales. On average there is one Short Sale for every two foreclosed property sales.

Short Sales are more cost effective than a foreclosure because they avoid the legal expense of a foreclosure, maintenance expenses, and interest and real estate tax expenses. In addition, Short sales can be completed with less marketing time and exposure to price fluctuations in the market.

Short sales also are better for the seller. The seller will not have a foreclosure on their record and often are fore given of the debt after the sale.

If Short Sales are so good why are we not doing more of them.

According to Campbell Communications, for every completed short sale, three fail due to slow responses to the offers.

It is not uncommon for short sales to take a minimum of 5 months to get a response or acceptance from the bank.

Why does it take so long to get a response. For one thing, the Banks are usually not the decision makers in a Short Sale. Banks typically are only servicing the loan and need approval from the investor.

If Short Sales are better than a Foreclosure then here is my solution to the problem.

Take banks out of the equation and stop rewarding them with money incentives.

If banks are not the decision makers in Short Sales then why reward them with cash.

I suggest we set up another review process for Short Sales.

buyers, seller, lender, and investor, and the Fed need to be part of the process.

Why the Fed?

The number one problem with Short Sales is Investors do not want to take a loss on their investment.

(The loss is the difference between what is owed on the mortgage and the price being offered in a Short Sale.)

In order to get more Short Sale approvals the Fed could guarantee the loss to the investor.

When the Short Sale is finally approved by all parties then they must perform or be in default.

If buyers default then they could be loose their earnest money. If sellers or lenders default then buyers could sue for specific performance.

Finally, Short Sales could become the Solution to the Housing market only if we take necessary steps to change how it is currently operating and streamline the process.

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Truth or Consequences

Jack Lewitz (Jack A. Lewitz) — Tue, 01 Sep 2009 09:35:05 -0500

I think we need to think about who we are rewarding and who we are hurting . While the intentions of the Making Home Affordable Mortgage Program ( HAMP) is supposed to be help homeowners who have fallen behind in their mortgage the number of people being helped is below the estimates. Originally it was thought that the program would help 9 million people faced with foreclosure and clearly this is not the case.

With unemployment rising in some areas modifying loans will not work. Yet the other day a client of mine said she received a call from the bank and has decided to pursue a loan modification with them even though she is unemployed.

I think the public does not understand that banks are under pressure to modify more loans and by attempting to modify more loans they get paid two ways. The get money from the homeowner and money from the federal government for servicing and modifying the loan.

Someone needs to tell the truth and let people know that if they default on the new loan they will have to pay the consequences. If a homeowner defaults on the new loan the bank can accelerate the foreclosure process.

Its Time We Stop Saying " There Goes the Neighborhood"

Jack Lewitz (Jack A. Lewitz) — Tue, 25 Aug 2009 17:02:37 -0500

Foreclosures affect all of us directly and indirectly. The impact of a foreclosure goes well beyond the individual borrower and lender. Foreclosures also affect neighbors, local business, and municipalities.

We all understand the monetary costs to foreclosure but how about the social costs to foreclosure?

Who hasn’t driven down a street and noticed a real estate sign posted on a vacant home and wonder “What happened to the people who lived in that house?”

As more homeowners are faced with foreclosure we need to come up with more inovative programs to deal with the problem. We need better foreclosure prevention programs, we need neighbors and municipalites working together to monitor any dangerous or criminal behavior associated with foreclosures and vacant building.

We need better communication with lenders, local governments, neighbors, and homeowners. We need better accountability where lenders and municipalities work together to share the costs related with foreclosure and then ways to recover those costs.

While the number of foreclosures present challenges I am confident that these challenges will present opportunites for people to work together to solve the problem we are all faced with when it comes to foreclosures.

Its time we stop saying ” There goes the neighborhood”

Countrywide Told It Could Not Pass the Buck...

Jack Lewitz (Jack A. Lewitz) — Thu, 20 Aug 2009 13:55:39 -0500

Greenwich Financial Services wins case against Countrywide Financial in the State of New York.

Greenwich Financial Services, as Plaintiff, alleged that Countrywide had no right to transfer any losses onto trusts who purchased loans from Countrywide and sold them as Securities to Investors.

As part of a class action law suit made against Countrywide by the Attorney Generals in at least 15 state, Countrywide Financial Corporation agreed to reduce payments on hundreds of mortgages that were thought to be fraudulent. The total amount of this settlement was up to $8.4 billion dollars.

In its lawsuit Greenwich Financial Services, said that any agreement to reduce payments was not something that investors had agreed to and that if there were any losses or reductions in payments to investors then Countrywide had to payoff the loans so investors would not loose money.

While we will never know who owns these bad loans the complaint states that the number of Investors could be in the thousands. When Countrywide needed money it pooled and sold loans to Trusts, these Trusts in turn sold securities( often called “certificates” which were sold in different classes or ‘tranches”)

Top 5 Reasons You Should Not Hide From Your Lender

Jack Lewitz (Jack A. Lewitz) — Fri, 31 Jul 2009 22:48:35 -0500

Top 5 Reasons You Should Not Hide from Your Lender

1. The problem will not go away.

2. Your lender does not want to own your Home.

3. There is a solution to your problem other than Foreclosure

4. Your credit can be repaired.

5.You can be helped only if you want to be helped.

“Yes it is safe to come out from hiding”

Illinois Banks have cost FDIC a Pretty Penny

Jack Lewitz (Jack A. Lewitz) — Thu, 23 Jul 2009 17:43:04 -0500

Illinois Bank Losses Cost FDIC a Pretty Penny.

The Top 12 Illinois Bank Failures of 2009 report from Chicago Tribune:

Bank Name	Location	Total Assets Estimate	FDIC Insured Loss	Insured Loss % of Banks Total Assets
Founders Bank	Worth	$963,000	$189,000	20%
Strategic Capital	Champaign	$547,000	$173000	32%
Citizens National	Macomb	$439,000	$106,000	24%
National Bank of Commerce	Berkeley	$420,000	$97,000	23%
Corn Belt Bank and Trust	Pittsfield	$260,000	$100,000	38%
Heritage Community	Glenwood	$235,000	$42,000	18%
Bank of Lincolnwood	Lincolnwood	$214,000	$83,000	39%
1st National Bank	Danville	$166,000	$24,000	14%
Rock River	Oregon	$77,000	$28,000	36%
John Warner	Clinton	$70,000	$10,000	14%
Elizabeth State	Elizabeth	$56,000	$11,000	20%
Totals		$3,483,000	$869,000	25%

These 12 Illinois Bank lost a total of $869 Million Dollars this year or 25% of total bank assets a little under $3.5 billion.

All of this money was insured by FDIC.

FDIC total Losses on a National Level are estimated to be $12.7 Billion with $42 Billion in total Bank Assets.

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