Illinois Renters Fear Eviction

ILLINOIS — After four extensions and numerous challenges in court, the federal moratorium protecting Illinois renters from eviction during the pandemic is set to expire in just a few days.

The moratorium, issued by the Centers for Disease Control and Prevention, officially ends July 31. The most recent extension was issued in June, and federal officials have indicated they have no plans to extend it again.

Click the link to read the rest of the article. https://patch.com/illinois/chicago/illinois-renters-fear-eviction-federal-moratorium-ends

Illinois Real Estate Affairs Update

This is a recent article called Spring 2021: Government Affairs Update that was written by the Chicago Association of Realtors. To read this article, click here.

The Language of Foreclosures

Talking about foreclosure real estate can be hard enough without even entering the market. That’s because foreclosures tend to have their own language, employing many obscure words originating in government housing legislation and real estate law. Without a background in these areas, prospective investors won’t be able to decipher even the simplest foreclosure contract. This article lists some of the more common foreclosure-related terms as a reference for people interested in this lucrative market. 

Abandonment: Wherein a property owner has given up ownership rights without coercion and does not want to retrieve those rights or pass them to somebody else. A situation involving an unused property does not guarantee abandonment.

Acceleration Clause: A clause commonly written in a mortgage enabling the lender to demand full re-payment immediately, rather than at the end of the contracted term. The clause must also detail an occurrence that would put it into effects, such as a default on regular payments, sale of the property, or re-assignment of property rights. In most cases, the debtor must be given reasonable notice, and a chance to reverse the occurrence. The debtor is also immune from acceleration if there is no such clause written into the agreement. 

Chattel: Personal property, including household items.

Closing Costs: Expenses not related to the marketing and selling of the property, sure as loan fees and paperwork fees. Foreclosures might also involve extra-legal and escrow fees.

Deed in Lieu of Foreclosure: Property owners may deed their property to the lender if foreclosure is imminent, rather than go through the entire process. For the deeding to be official, the lender must give approval. 

Default: Failure of the borrower to make payments as required by the lender. “Default” may refer to a missed payment without any further repercussion or a series of missed payments resulting in a failed mortgage.

Equity Right of Redemption: The right of the borrower to remove all encumbrances related to the mortgage, in order to avoid foreclosure.

Federal Housing Administration (FHA): A part of the Housing and Urban Development Federal agency responsible for determining industry standards for mortgage loans by private lenders. FHA also insures mortgages by private lenders. Foreclosure investors must occasionally deal with this agency. 

Federal National Mortgage Association: Also known as FNMA, or Fannie Mae, this federal agency oversees conventional residential mortgages and will buy out loans that follow its rules. Some foreclosure investments require direct communication with this agency. 

HUD1 Statement: A form mandated by the US Department of Housing and Urban Development that specifies the costs of acquiring a foreclosed home.

Loan-To-Value Ratio: A comparison of the total loan amount and the lesser of the property’s sale price or appraised value. 

Notice of Rescission: A notice from the lender notifying the borrower that he or she is again in good standing with the loan, and payment deficiencies have been corrected. 

Short Sale: A property sale priced at or below market value, and lower than the amount of a mortgage on the same property. 

Truth-in-Lending Act: A law requiring the lender to provide the borrower with a full written explanation of the mortgage’s terms.

What A Lender Must Disclose

When applying for a mortgage, laws require a lender to disclose several facts about the loan at the time of application or within three days of submitting it. It is important to familiarize yourself with these points so you can be fully educated about possible charges, rates, and ownership of the loan.

Good Faith Estimate

The Real Estate Settlement Procedures Act (RESPA) requires the lender to give the estimated closing (settlement) costs of a loan. These can include a processing fee, appraisal or inspection fee, credit report fee, and mortgage insurance application fee. The Department of Housing and Urban Development (HUD) has an itemized list of these costs, and the lender is required to provide the borrower with a brochure from HUD about the home-buying process. The closing costs are separate from the loan amount and are usually expected to be paid upfront.

Truth in Lending

The federal Truth-in-Lending Law ensures that borrowers will have knowledge of the terms and conditions of a loan so they can effectively compare loan programs and lenders. A lender must disclose the annual percentage rate (APR) of the loan, which is the cost of credit to the borrower expressed in a yearly rate. This charge can include indirect charges a borrower must pay including appraisals and credit reports if those costs are to be paid with loan payments.

Transfer for Servicing

The lender must also provide the intent regarding servicing the loan. This is also called selling the loan, and it refers to the rights of payment collection. It is common for a loan to be sold at least once during its life. Servicing a loan does not personally affect the borrower other than changing where payments may be sent. The lender should tell what percentage of loans it has transferred in the past. It must also give adjustable rate mortgage (ARM) applicants a maximum cap for monthly payments.

Besides the required disclosures a lender must make, be sure to ask about prepayment penalties. Loans with a prepayment penalty sometimes have a lower interest rate, and lenders may default to this. If you are interested in making early or double payments on your mortgage, be sure to ask the lender about possible penalties.

What is a 1031 Exchange?

Many people who sell an investment property believe that federal capital gains from that sale must always be handed over to the IRS. This is not always the case. IRS Code Section 1031 offers investors the opportunity to reinvest federal capital gains from a sale if you swap that property for another and it does not always have to be for like property either! Instead, as an investor, you could have that money work for you rather than end up in the hands of the IRS. Further, you do not have to sell your property for the exact same type of property either!

The 1031 Code indicates that no gains or losses will be recognized on the exchange of any type of business use or investment property for any other business use or investment property.

So what does this mean? How can this help you?

If you own a business or an investment property you should consider a 1031 exchange. You would be able to defer 100% of both federal and state capital gains tax. 1031 Exchanges in essence become interest-free loans; where the principal may increase through future exchanges allowing the Exchanger to never payback if the transactions are planned well. Along with the guidance of an experienced realtor, www.michaeltrustrealty.com this can be one of the most profitable ventures you will ever enter into.

Are you apprehensive about the 1031 Exchanges? Here are some interesting facts, which will make the decision easier.

1) At one time, exchanges were only done to switch like investment properties to the same person swapping for your own, but this is not the case anymore. In fact, you can sell your own property to someone who does not have a relationship with the person from whom they are purchasing the replacement property.

2) It is important to know that like-properties once met the same, condo for a condo, empty lot for an empty lot but that is also no longer the case. If you have invested your money in an empty lot but wish to exchange for an apartment building, this too is possible and again, no taxes would be paid for the sale of the vacant land when following the guidelines of the 1031 exchange. In fact, the owner of the empty lot can even sell that one lot and then purchase several others or just buy one and then sell others. Note, 1031 Exchanges only apply to investment properties and not residences.

3) Many believe only investors of large commercial properties can utilize 1031. One of the greatest features about a 1031 Exchange is that it applies to all investment properties, large and very small. 1031 Exchange works the same way for a corporation selling a large shopping mall as it would for an individual selling a single-family property used for rental or held for investment in a resort area.

4) Many believe 1031 Exchanges are very complicated and not worth investigating. Consider working with a qualified Realtor who can offer you professional advice and direction. 1031 Exchanges is a relatively smooth process and definitely worth considering but sound advice from an experienced Realtor is the key to profitability.

5) The Exchanger can acquire a replacement property with greater income potential. For example, raw land can be sold to acquire income-producing property or a larger or more ideally located property. A duplex rental property can be exchanged for a 4-family investment property offering greater income.

Should you wish to increase your buying flow due to greater cash flow, exchange investment or rental property for that with a greater income, acquire an investment property that is easier to finance, or should you have the need to relocate or the desire to increase your current business or investment space for a larger area, the 1031 Exchange can accomplish any or all of these goals.

Because a Realtor is generally not licensed nor qualified to provide legal and/or tax advice, the above statements should be verified with your own competent tax and/or legal advisor who has specific information about your particular situation. You should only rely on your own competent tax and/or legal advisor’s advice. Nothing noted above is tax and/or legal advice. The above information is general in nature and is for general informational purposes only.

Real Estate Terms From Appraisals to Comps

When youre selling your home or other real property on your own, you dont have to know everything about the process. It does help to have a practical knowledge of the terms that come up during the process.

Keep in mind, these arent intended as be all, end all, penultimate definitions. Theyre working definitions for pragmatic folks. Lets go

1) Acceptance – A legal term referring to the acceptance of a buyer’s offer by the seller. Acceptance is often preceded by a number of counteroffers between the parties.

2) Appraisal – a professional opinion of the value of real property. Most jurisdictions have careful rules defining who may call themselves an appraiser, and most lenders have a stable of approved appraisers whom they use regularly. Typically, the lender making the new mortgage loan will require that the property appraises for at least as much as the purchase price. Occasionally, a buyer will require the same thing in an all-cash transaction.

3) Bridge Loan – Short term loans used to bridge any time gap between the sale of a home and purchase of the next one. These loans can be valuable when escrow is delayed on the sale of a home and the seller has committed to the purchase of another home. Bridge loans are also known as panic loans but can be a lifesaver.

4) Coinciding Settlements – when a buyer needs the funds from the sale of his prior home (which is under contract to be sold) in order to purchase his next home, he may well make settlement under his sale a contingency for settling on the home he is purchasing. In reality, the sales don’t usually coincide. They usually take place back to back. Funds from the first are often wire transferred to the second.

5) Closing – Depending upon the state you live in, Closing can have different meanings. Generally, the closing of a real estate transaction refers to the exchange of necessary documents, execution of the same and transfer of money.

6) Comps – This term refers to the sales prices of similar properties in the area of a house in question. Comps are used to help determine the fair market value of a property.

7) Conditions – any conditions which must be met before the sale can be consummated. Some typical conditions include things like the property’s appraising for the purchase price or more, the property being in good condition when a home inspection is done, the buyer’s loan is approved.

As you can imagine, there are many real estate terms for which you have a general understanding.

Info on being an Airbnb host in Chicago

When deciding whether to become an Airbnb host, it’s important for you to understand the laws in your city. As a platform and marketplace we do not provide legal advice, but we want to provide some useful links that may help you better understand laws and regulations in Chicago, IL.

Read more by clicking the link below

https://www.airbnb.com/help/article/861/chicago-il

Warranty Deed vs. Quitclaim Deed

Warranty Deed vs. Quitclaim Deed

When you’re in the process of selling (or purchasing) a house, you will most likely, encounter several kinds of documents: all with different names and with different uses and functions. Two of the most misunderstood documents are the warranty deed vs. quitclaim deed. Many think that these two forms are alike, but they are not.

A warranty deed is a document which the seller presents to you and is used in the majority of all sales transactions. The warranty deed simply states that the seller owns the property being sold and that it is free from any sort of liens. By presenting a warranty deed, the buyer is assured that the holder of the title has the legal right to transfer ownership of the unit and is assured that no one (financial institution or other creditors) would come after him to make a claim on the property. In the eventuality that someone does lay claim to the property that has just been purchased (or that the claims stated in the warranty are erroneous), the buyer is further protected by law and would be entitled to receive a form of compensation. Warranty deeds seldom stand alone as these documents are usually backed up by a title insurance policy.

A quitclaim deed, on the other hand, is presented to a buyer by someone who does not necessarily own the property being sold but holds responsibility for it. This occurs due to several reasons such as when the owner dies and bequeaths the property to one of his heirs, or when there is a marriage and the owner wants to include the name of his/her spouse to the title (among others). A quitclaim deed offers a lower level of protection to buyers. This kind of document is used primarily when the property in question will just stay within a family.

Incidentally, there are times when both a warranty deed and a quitclaim deed are presented to a potential buyer. An example is when the property lies on the border of rivers and or lakes; where ownership of the underwater land on which his property stands on remains unclear.

If you are unsure which kind of deed works best for your property, consult a real estate agent or a real estate lawyer.

Understanding Title Insurance

Understanding Title Insurance

Title to a property is a record detailing the owners of the property and rights associated with the ownership. Title typically shows a progression of ownership from the first owner to the current one. Title is a fairly simple concept, but when it goes wrong it is a nightmare. That is where title insurance comes in, and why it’s important to understanding title insurance.

Title Insurance

Title insurance guarantees that the title on a property is marketable when you purchase the home, condo, land, etc. You should always pay for title insurance. It typically costs a few hundred dollars and will save you a bundle if problems arise.

When you buy title insurance, a title insurance company researches the title for the property. The insurance company will look to see if the title is clear. Clear simply means that the seller is truly transferring title to you and no other person can claim ownership. While this sounds fairly simple, rest assured that title problems arise all of the time.

Title Problems

You might be wondering how you could possibly have title problems. Here are a few examples:

  1. Divorcing Couples Divorce is unpleasant and sometime very ugly. In particularly nasty situations, one spouse may attempt to sell a home without telling the other. To gain clear title, you need both spouses to sign off on the sale. If you dont, you are going to become a party of the divorce proceedings. Now, wouldnt that be fun?
  2. Estate Sales If you are purchasing a house as part of an estate sale, there can be real problems. The heirs may not be getting along and in an effort to get whats mine, may try to sell the residence without including all the heirs in the transaction. If you buy this home, you could end up involved in a lawsuit filed by an heir left out of the transaction.
  3. Ingress and Egress Issues Title to a property can have technical issues related to egress and ingress. Occasionally, one finds title to a property that is so messed up that the owner doesnt have the right to enter or leave the land because to do so would require crossing another persons property. In short, the property is landlocked and something must be worked out with the neighbors. Typically, a solution comes in the form of hard, cold cashlots of it.

These are just a few issues that can arise with title. With real estate, unique issues can arise all the time.

If you buy title insurance, you dont have to worry about problems with title. If a problem arises, you calmly pick up the phone and call the title insurance company. The insurance company will come up with a solution, even if it means paying you for bad title.