TAG: German Llanos

Aldi and Ross will replace the former Bank of America site in Six Corners

Wednesday night, Clark Street Real Estate revealed their plans to develop the former site of Bank of America in Six Corners 4747 W. Irving Park Road (Milwaukee, Irving Park and Cicero) in Portage Park.

Six Corners

Six Corners

From: http://www.clarkstreet.com/portfolio/developments/six-corners

CSRE acquired approximately 4 acres at the prominent Six Corners intersection of Irving Park Road, Cicero Avenue & Milwaukee Avenue from Bank of America. CSRE plans to develop an exciting retail project that fits within the fabric of the community and acts as a catalyst for the revitalization of the historic Six Corners Shopping District.
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The project will include approximately 100,000 square feet of retail on the first level, approximately 270 parking spaces on the second level with a continuous pattern of building abutting the sidewalks of Irving Park Road and Milwaukee Avenue. The loading and access points to the parking deck will be on Kilpatrick Avenue. The Alderman and Six Corners Association have emphasized the pedestrian circulation system and public spaces that have been thoughtfully included in the Project’s plan.

The site is currently under demolition with plans for construction to commence summer 2016.
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New mortgage lending rules to limit loan options

The Consumer Financial Protection Bureau is planning a Thursday morning announcement of new lending rules that it hopes will move the mortgage market toward a sustainable middle ground, somewhere in between the free-wheeling days of no-documentation loans and the current, restrictive environment.

For most borrowers, the rules will mean no more interest-only mortgages, no more loans where the principal due increases over time, no more loans that carry a balloon payment and no more loan terms of more than 30 years. In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.

These so-called qualified mortgages are expected to be embraced by lenders, because by following the criteria, they will have a better chance of shielding themselves from lawsuits from consumers whose loans go bad.

The provisions of the Ability-to-Repay rule, which follow closely the lines of protections called for in 2010’s Dodd-Frank legislation, will take effect in January 2014. Richard Cordray, the bureau’s director, is expected to detail the regulations at a public hearing Thursday in Baltimore.

A senior official of the consumer protection bureau, the agency charged with implementing the new mortgage requirements, said the lending standards are not much different than the guidelines currently in place. Still, while the rules might ease uncertainty among lenders who have worried about the scope of the regulations, it could cause additional anxiety for consumers trying to qualify for a home loan.

“It will add some certainty to the mortgage industry about what the rules of the road are going forward,” said Guy Cecala, president and CEO of Inside Mortgage Finance, a trade publication. “But it basically says we want everybody to make plain-as-vanilla mortgages.

“The legitimate concern is that this will cement the tight mortgage underwriting standard that we currently have in place, and most people agree, from (Federal Reserve Chairman) Ben Bernanke to the person on the street, that they’re too tight.”

To not upend the housing market’s recovery and assist consumers who can’t meet the 43 percent debt-to-income threshold, the agency said it was establishing a second, temporary category of qualified mortgages that meet most of the new guidelines but also would qualify to be purchased, guaranteed or insured by Fannie Mae, Freddie Mac or various other federal agencies. The temporary provision would end as those agencies issue their own qualified mortgage guidelines or if Fannie and Freddie end their government conservatorship or in seven years.

The bureau wanted to give the mortgage market time to adjust to the new standards and ensure that well-qualified people could still buy homes, the agency official said.

For all types of mortgages, to help determine a borrower’s ability to repay, lenders must look at eight factors. They include current income and assets, employment status, credit history, the mortgage’s monthly payment, other loan payments associated with the property, monthly payments for such things as property taxes, other debt obligations and a borrower’s monthly debt-to-income ratio.

Teaser interest rates no longer will be allowed to be used to judge a borrower’s creditworthiness. For homebuyers who apply for adjustable-rate mortgages, the monthly payments no longer can be computed using just an introductory rate that might be artificially low. Instead, the monthly payment must be computed using whichever is higher, the fully indexed rate or the introductory rate.

In addition to the other rules defining a qualified mortgage, the bureau also mandated that a qualified loan cannot charge to the consumer points and fees that exceed 3 percent of the total loan amount.

The mortgage lending industry has worried for months about the rules and heavily lobbied for protection from lawsuits brought by borrowers.

Under the new rules, lenders who make qualified mortgages to well-qualified borrowers that carry a lesser chance of defaulting could be shielded from lawsuits from these prime borrowers who say the lender did not satisfy the ability-to-repay requirements. Riskier, subprime borrowers could challenge the lender’s assessment of their ability to repay the loan but borrowers would have to prove that a lender didn’t adequately factor in living expenses and other debts.

“They appear to favor lenders’ interests above consumers,” said Diane Thompson, of counsel at the National Consumer Law Center. “You have to prove what’s in the creditor’s records. It may be that no homeowners are able to challenge it. Otherwise, you’re relying on regulatory oversight, and we saw how well that worked.”

The rules, in various forms, have been in the works for years. Other agencies continue to formulate their own rules, and one still in development about what constitutes a qualified residential mortgage might increase a consumer’s mortgage down payment in order to ensure that borrowers have more “skin in the game.”

By Mary Ellen Podmolik, Chicago Tribune reporter
January 10, 2013 Chicago Tribune Company, LLC

Fannie Mae announces program to boost Miami condo sales (sigue traduccion al espanol)

Miami I have 8 clients with over 700 credit scores, more than $15K in down payment and most of them make more than $50K a year. All of them want to buy in Miami “those great condo deals”. All of them are no cash investors and want to play vultures here in the “Ground Zero” of Real Estate. The problem was: No financing… in the buildings with those deals. In the expensive ones, where the price doubles there is financing. If you wanted to buy 20, 30 cents out of a dollar…. it needed to be cash.

Well, good news! Fannie Mae announced a new program to provide financing. Now, is Fannie Mae a bank? Is she a rich aunt from Europe?

Nop. Fannie Mae is a government-sponsored institution who re-purchase the loans that banks make. Bank of America or Chase “originate” residential home mortgages but they do not keep those in their portfolio, they originate and immediately turn around and sell the loan to Fannie Mae (or Freddie Mac) for cash. Banks do not like to keep loans (portfolio) because it drains their liquidity for 30 years. They rather turn around, sell the loans for a discount, make a profit and keep moving forward.

The problem was that if Fannie Mae did not repurchase loans in specific building due to their bad finances and number of foreclosures…. banks did not want to lend on those buildings. Then without being able to resell many sellers went to foreclosure or sold at ridiculous prices.

Now this might change. Email me to send you a list of buildings with the “Special Approval” designation of Fannie Mae. As you can see there are dates for some of those because this status might change… so do not procastinate again!!! This is a window of opportunity so take it.

Give me a call for questions, we can go into more detail over the phone.

German

847-962-0923 / german@24hourschicago.com

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EN ESPANOL

Tengo 8 clientes con mas de 700 en su score crediticio, mas de $15,000 para downpayment y casi todos hacen mas de $50K al ano. Todos quieren comprar esos “increibles deals” de Miami. Todos ellos no tienen cash pero quieren ser esos buitres que se levantan los mejores deals. El problema es que No Hay Financiamiento…. en los edificios donde esta lo bueno. Los edificios caros, donde los precios estan mas del doble alli si hay. Pero si usted quiere comprar a 20, 30 centavos por dolar, tenia que ser cash.

Bueno, buenas noticias! Fannie Mae anuncio un nuevo programa para proveer financiamiento. Pero, es Fannie Mae un banco? una tia rica de Europa? Quien es Fannie Mae?

No. Fannie Mae es un institucion sponsoreada por el gobierno americano que se encarga de re-comprar los prestamos que los bancos hacen. Banco de America y Chase “originan” prestamos hipotecarios residenciales pero no se los quedan en sus portafolios, ellos originan e inmediatamente se dan la vuelta y los vende a Fannie Mae (o Freddie Mac) por efectivo. Los bancos no mantienen estos prestamos en su portafolio porque les quita la liquidez por 30 anos. Ellos mejor se dan la vuelta, los venden a descuento, hacen una utilidad rapida y siguen para adelante.

El problema es que Fannie Mae no compraba los prestamos en determinados edificios debido a las malas finanzas y elevado numero de casas reposeidas de los mismos…. los bancos entonces no querian prestar en esos edificios. Lo que terminaba pasando es que la gente que queria vender en los mismo terminaba en foreclosure o rematando las unidades de sus edificios pues los compradores no podian conseguir financiamiento.

Ahora esto podria cambiar. Escribanme un email y les mando la lista con edificios con “Aprobacion Especial” de Fannie Mae. Como puede ver hay fechas pues este status puede cambiar en cualquier momento. No lo piense 4 veces y deje pasar esta oportunidad.

Deme una llamada si tiene preguntas y vamos sobre mas detalle.

German

847-962-0923 / german@24hourschicago.com

Timing the market

Opportunity
I wonder why I did not buy Citibank stock when it went down to less than a dollar? Greed or fear? I was there in front of my E-Trade account did my fundamental and technical analysis, did all my home work, knew that the government will not let it die, my gut feeling was saying go for it!, I remember that afternoon… after 2 hours of thinking I stood up of my desk and said: Let’s wait.

You know the rest of the story. I regret that did not do it now. The opportunity is gone.
I have a few clients who asked me: Hey German when do you think the Real Estate market will bottom up? I usually tell them: “On Friday, September 4th, 2009 at 4.02 pm. There will be a huge thunderbult in the skies and the sun will come out shining! You will know exactly then that the recession is over and the prices will start rising after that exact moment”.

Point to make is there is no way to calculate the exact time to buy. You can analyze and then take advantage of a favorable environment. Do your homework, do some research and find out yourself if this is a good moment to do it:

– Interest rates are low. Yes 5% or 6% is not 4% but is less than 18%. Remember or read about Carter and Reagan times. I love the 80’s but I did not love this part.

– Inventories are still at all times high. Foreclosures makes the homes next door to decrease value and there are a lot of those so the prices are still cheap. Since developers are not building now and will not do it for the next 5 years (banks will not finance new projects), chances are that there will be a deficit in years to come when all the inventory dries up.

– Unemployment is at 10%. Not at 25% because that is a depression but with 10% people are “afraid” so there are less buyers out there. So if you are secure financially and confindent you will find less competition and find that great deal.

– Inmigration and a growing population rate is here to stay. In Chicago there is and will be lots of international inmigration and midwest inmigration. Just ask your neighbours in Michigan and Ohio where they kids will go to study or work. Florida will receive plenty of baby boomers and inmigrants from all over the world with the years to come. Location works also to decide what is the city that you will pick to live.

Yesterday we were looking at homes in Brickell with a few clients. The sweet deals, that corner units with that view to the bay at $180K are long gone… the whole tiers. The smart investors are almost done shopping. I am talking about the quiet ones, the ones with experience and money. They never make the news but own the prime properties in all the cities. The ones that buy “value” not fashion or price are buying now. Do you want to look for another “Sign of the Times”?

Have a great Labor Day weekend all!

German

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