Chicago home sales down 17.7% in October

Home sales in the Chicago area fell 17.7% in October, according to the Illinois Assn. of Realtors.

In the nine-county Chicago region, single-family and condominium sales totaled 5,397 in October, compared with 6,559 in October 2007, the Realtors’ group said in a release Monday.

In the city of Chicago, home sales fell 21.6% in October, to 1,535 from 1,959 in October 2007.

more at http://www.chicagorealestatedaily.com/cgi-bin/news.pl?id=31936

Home Prices Tumble in 80 Percent of U.S. Cities

Home prices fell in four out of every five U.S. cities in the third quarter, a record spurred by distressed foreclosure sales across the country.

The median price of a U.S. home fell 9 percent from a year earlier and sales of properties with mortgages in default accounted for at least a third of all transactions, the Chicago- based National Association of Realtors said today. Prices fell in 120 U.S. metropolitan areas, rose in 28 and were unchanged in four, the biggest share of declines in data going back to 1979.

The financial turmoil sparked by the collapse of the U.S. subprime mortgage market has caused $996 billion of losses for banks, lenders and insurers. U.S. companies slashed 1.4 million jobs in the last six months, the biggest reduction since 1975.

more at http://www.bloomberg.com/apps/news?pid=20601087&sid=ateSmtYTdPWE&refer=home

Illinois foreclosure activity jumps in October

The number of homeowners caught in the wave of foreclosures in October grew 25 percent nationally over the same month in 2007, data released Thursday showed.

More than 279,500 U.S. homes received at least one foreclosure-related notice in October, an increase of 5 percent over September, according to RealtyTrac Inc. One in every 452 housing units received a foreclosure filing, such as a default notice, auction sale notice or bank repossession.

In Illinois, 12,681 homes got a foreclosure-related notice last month, up 24.3 percent from September and up 31.1 percent from October 2007, according to RealtyTrac.

More than 84,000 properties were repossessed in the U.S. in October, RealtyTrac said.

A nasty brew of strict lending standards, falling home values and a tough economy is filtering through the housing market. By the end of the year, the company expects more than a million bank-owned properties to have piled up on the market, representing around a third of all properties for sale in the U.S.

The collateral damage in the financial markets forced the government to pass a $700-billion financial rescue package last month. The plan was initially to buy bad assets from banks, but Treasury Secretary Henry Paulson said Wednesday that the rescue package won't purchase those troubled assets.

That plan would have taken too much time, he said, so instead the Treasury will rely on buying stakes in banks and encouraging them to resume more normal lending.

Also Wednesday, Housing and Urban Development Secretary Steve Preston said the government may let more borrowers qualify for a $300-billion program designed to let troubled homeowners swap risky loans for more affordable ones. The program was launched Oct. 1, but there are concerns that lenders won't participate because they have to voluntarily reduce the value of a loan and take a loss. In RealtyTrac's report, three states — Nevada, Arizona, Florida — had the nation's top foreclosure rates. Nevada posted the nation's highest rate for the 22nd consecutive month in October.

In Nevada, one in every 74 homes received a foreclosure filing last month. Arizona saw one in every 149 housing units receive a foreclosure filing, and in Florida it was one in every 157 homes.

Other states in the top 10 were California, Colorado, Georgia, Michigan, New Jersey, Illinois and Ohio. Illinois’ rate was ninth-highest, with one foreclosure-related notice for every 410 homes.

However, RealtyTrac noted that while California had the highest total number of foreclosures in October, the rate in that state was down 18 percent from the previous month.

James J. Saccacio, chief executive officer of RealtyTrac, said new laws requiring delays in the foreclosure process have reduced the volume of foreclosure filings in several states. In California, lenders are now required to contact borrowers at least 30 days before filing a default notice. A similar law in North Carolina gives borrowers an extra 45 days. "While the intention behind this legislation — to prevent more foreclosures — is admirable, without a more integrated approach that includes significant loan modifications, the net effect may be merely delaying inevitable foreclosures," Saccacio said. "And in the meantime, the apparent slowing of foreclosure activity understates the severity of the foreclosure problem in these states." Among cities, Las Vegas had the highest October foreclosure rate among the 230 metro areas tracked in the report, with one in every 62 housing units receiving a foreclosure filing. Four Florida metro areas ranked in top 10 — Cape Coral-Fort Myers was second, Miami third, Fort Lauderdale eighth and Orlando 10th. California also had four metro areas in the top 10: Stockton fourth, Merced fifth, Riverside-San Bernardino seventh and Modesto ninth. The remaining member of the top 10 was Phoenix, which came in sixth.

Editor scoops big profit in flipping Trump Tower condo

Donald Trump has struggled to sell condominiums in his downtown high-rise, but at least one investor who bought a unit in the 92-story building has made out well: Chicago Sun-Times Editor-in-Chief Michael Cooke.

Michael CookeMr. Cooke and his wife, Barbara, turned a quick profit as the first buyers to flip a residential condo in the tower, a feat dozens of other investors hope to pull off as Mr. Trump completes the upper, residential floors of the downtown skyscraper.
The Cookes bought their unit for $543,000 on Sept. 18 and sold it to another buyer for $790,000 on Oct. 10, according to deeds filed with the Cook County Recorder. The Cookes financed their purchase with a $417,000 loan, presumably putting up $126,000 themselves and nearly doubling their money in less than a month. Efforts to reach Mr. Cooke were unsuccessful.

Investors like Mr. Cooke will only make life more difficult for Mr. Trump, who has been unable to pay off a $640-million construction loan on the project that came due last Friday. Not only does the New York developer face the worst residential real estate market in decades, but he is competing with a growing number of his own buyers who have put their condos up for sale. Buyers started closing on their units a few months ago.

The building’s new residents include Chicago Blackhawks star Patrick Kane, who paid $2.1 million for a condo in the tower in September, financing the purchase with a $1.4-million loan, according to a deed. Currently the team’s leading scorer, Mr. Kane is neighbors with Chicago Bears quarterback Rex Grossman, who bought a unit in the high-rise for $2.7 million.

Mr. Trump, meanwhile, is buried deep in his own territory with not much time left on the clock. The developer has yet to sell 121, or 25%, of the 486 residential condos in the building at 401 N. Wabash Ave., according to Appraisal Research Counselors, a Chicago-based real estate consulting firm.

But instead of purchasing directly from the developer, buyers now can choose from 34 resale units that are listed on the Multiple Listing Service — in some cases at a discount of 30% or more to Trump prices.

“The worst is yet to come because they haven’t closed on that many residential units yet,” says Andrew Glatz, president of Chicago-based brokerage Crown Heights Realty. Mr. Glatz has listings for six condos and 25 hotel units in the Trump building.

Mr. Trump says he isn’t worried.

Investors “will be competition but hopefully everybody will be happy in the end,” he says.

Still, the developer has acknowledged that competition from investors is making it difficult to sell out the building’s 339 hotel suites. With dozens of investor-owned hotel units listed for sale at prices much lower than his, he wants to slash prices on his remaining unsold units, but his lenders won’t let him, according to a lawsuit he filed last week.

Related story: Trump sues lenders for more time to pay off loan on Tower

The Cookes sold their one-bedroom condo on the 42nd floor for $790,000, 19% less than the $978,800 the developer is asking for a comparable unit on the 30th floor.

The couple bought their unit through a “friends and family” program, which allowed select buyers to purchase their units at a 10% discount to the list price. The couple qualified for the program presumably because of Mr. Cooke’s ties to the Sun-Times’ owner, then Hollinger International Inc. The company initially was Mr. Trump’s partner in the project, which is on the former site of the Sun-Times headquarters.

Yet Mr. Trump angered many of his friends-and-family buyers a couple years ago, when he demanded that they renegotiate their purchase contracts at a higher price.

It’s unclear what the Cookes originally agreed to pay for their unit under the program, but the investment still turned out well, especially considering the current state of the market.

“He did great,” Mr. Glatz says of Mr. Cooke. “I think that he’s very lucky he was able to find a buyer.”

Government finishes plan to make mortgage forms easier for consumers to understand

Prospective home buyers would get a simpler way to understand often-confusing mortgage terms under new rules issued Wednesday by the federal government.
The Department of Housing and Urban Development overhauled a 1974 law requiring lenders to give a so-called "good faith estimate" of mortgage costs, including lenders' payments to mortgage brokers.

HUD Secretary Steve Preston said in prepared remarks that "consumers deserve to understand this, and they need to get credit for essentially paying these premiums."

The government, which originally proposed revising these forms more than six years ago and released its latest proposal in March, says the new forms should save consumers around $700 in closing costs. The new forms will be required starting in 2010.

But changes to the stack of paperwork that consumers must sign before buying a house will have a big impact on thousands of real estate agents, mortgage brokers, banks and title companies.

The real estate industry had flooded HUD with complaints that the changes would be complicated and costly, and don't necessarily make the process easier for consumers to understand.

In theory, if borrowers had a better understanding of loan terms, they might have avoided some of the riskier loan products that became popular in recent years -- such as subprime loans, or so-called option ARMs that allow borrowers to pay only the interest on the loan or even less, so the principal increases.

Minorities have been most abused, research shows. A study of 7,500 mortgages released in May by the Urban Institute and HUD found that black borrowers paid $415 more in loan fees on average than white borrowers. For Hispanics, the difference was $315.

"None of us can lose sight of the fact that millions of Americans simply don't understand all the fine print of their mortgages and this, in many respects, is at the heart of today's mortgage crisis," Brian Montgomery, HUD's Assistant Secretary of Housing, Federal Housing Commissioner, said in a prepared statement.

California Town Drowns in Debt as Home Values Plunge

Almost 90 percent of homeowners in Mountain House, Calif., owe more on their mortgages than their houses are worth, the highest percentage in the country.

 more at http://www.nytimes.com/2008/11/11/business/11home.html