Call: 312.726.1512

WasserBlawg

Information for Buyers and Sellers of Chicago Area Residential Real Estate
  1. Imagine a quiet evening on the deck of your new home when—out of nowhere—a noisy drone begins hovering around your property, almost certainly snapping photos or video. It’s like Space Invaders meets Gladys Kravitz. So what do you do?

    With the growing popularity of drones or UASs (unmanned aircraft systems) for personal enjoyment and commercial use, including real estate home inspections and delivery services, our clients have been asking if there are any regulations that protect their privacy and sanity from unwanted drones.
     

    A Quick History
    Prior to the rise of airplanes, a property owner’s rights extended “ad coelom et ad inferos,” which means up to heaven and down to hell. After airplanes took off (pun intended) in popularity, the Federal Aviation Administration determined the vertical curtilage (area) belonging to a property owner is up to 500 feet above the ground. The problem is that drones typically fly below 500 feet.

    In June 201, the FAA issued its first rules for use of small, non-hobbyist UAS that weigh less than 55 lbs. The current FAA rules:
    • Require operators to keep drones within the operator’s visual line of sight. 
    • Prohibit flights over unprotected people on the ground who are not directly participating in the UAS operation.
    These rules, however, focused on operation and not property rights. Leaving property owners to look to individual states.

    Current Illinois Drone Regulations 
    In 2016, the State of Illinois set up a task force to provide oversight and to help create drone rules. The task force provided some guidance as to property rights:
    • Private parties and public agencies should obtain permission from the property owner before using said property for landing, operation, or takeoff.
    • Private property owners always retain the right to deny drone use over their property.
    An operator is liable for the harm done by its drone. A violation of statute via drone carries the same civil/criminal penalties as if violated by the operator. This connection is significant because it allows landowners to seek damages for any harm or injury caused by the operator’s drone.

    Those who use drones on the job must be at least 16 years old and have a Remote Pilot Airman Certificate, which requires passing the FAA’s Aeronautical Knowledge Test.

    Here’s What You Can do About Drones Now
    If a drone is knowingly and willfully operated over your property without consent or remains on your property after being prohibited you may:
    1. Bring a criminal trespass action and/or seek injunctive relief
    2. Bring a civil tort action for breach of privacy under Illinois common law
    Also, if a drone violates any statute, landowners may:
    1. Seek damages from the operator for any harm or injury caused by the operator’s drone
    Why is Drone Legislation Taking so Long?
    The FAA could release new drone laws that supersede any state rules at any time, so it’s likely that Illinois legislator are waiting to see how it shakes out.

    As drone use continues to increase, especially in the commercial delivery industry, the wait for a definite set of property guidelines will be interesting to say the least.

    Questions? Launch me an email at michael@mhwasserman.com.


    Written by Susan Jenks and Oliver J. Murphy for Michael H. Wasserman, P.C. 
    Thanks to these sources, where you can learn more:
    ISBA: Drones, federal and Illinois law, surveillance and the Fourth Amendment
    State of Illinois: Illinois Unmanned Aerial System Oversight Task Force
    ICA: What’s Required for Drone Assisted Home Inspections?
  2. We’ve updated mhwasserman.com to be user- and mobile-friendlier.

    From streamlining the look and including reviews to adding photos of our team, we’ve made it easier to help sellers, buyers and brokers understand how we get them to the closing table on time, as planned.

    Left/Before: While good looking, the former site was difficult to navigate on mobile phones.
    Right/After: The new site is easier to navigate and share. It’s also easier to view when you’re on the run.
    Stay tuned! The new look is just the first step, soon we'll add a real estate resource section, where you will find checklists, links and forms that help simplify the often-complex real estate process.

    Check us out at mhwasserman.com.

    Questions? Compliments? You can still call me at 312.726.1512—some things haven’t changed.

  3. Identity thieves hit a major credit reporting agency—hard.Millions of consumers’ confidential identity information has been compromised.

    Equifax, one of the big three credit reporting agencies announced that a massive security breach took place earlier this year. Offenders accessed data sets of 143 million US consumers.

    That means all of the information you give the bank when you apply for a car loan, mortgage, credit card, or a new bank account could be compromised. The Equifax breach includes millions of social security numbers, birth dates, addresses, credit cards and driver’s license numbers.

    Oy.

    How widespread is the data heist? Let’s put it this way. Wikipedia says the July 2016 US population was 323,127,513. In 2014, the adult population was 245,300. Near as I can tell, that means more than half of all adults in the country have been compromised!

    What to do? Here are 6 steps I suggest you take to protect yourself.

    1. Determine If You Are Impacted
    Equifax is sending written notifications to every impacted consumer. If you cannot wait, go to equifaxsecurity2017.com and provide your last name and the last six digits of your social security number. You will see if your information may have been compromised.

    2. Enroll in Credit Monitoring
     Compromised or not, you can enroll in Equifax’s TrustedID Premier program which is complimentary 1-year credit file monitoring and identity theft protection. Visit equifaxsecurity2017.com or call Equifax at 866-447-7559 for more information.

    IMPORTANT:
    According to Equifax FAQs, signing up for Equifax TrustedID
    does not limit your legal options related to this breach. 

    You might also ask your credit card issuer, bank, insurance agent, financial services representative or your employer’s HR department to see if they have similar credit monitoring programs. For pay services, there may be a third type of solution at Equifax, TransUnion or Experian.

    3. Get Fraud Alert with Another Credit Bureau
    Fraud Alert on your credit report alerts creditors and lenders who pull your credit report to take extra steps to verify your identity. Ideally, this stymies anyone trying to impersonate you on a credit application. Most fraud alerts only last 90 days, so you may want to repeat. You only need to alert one of the bureaus:
    Experian 1-888-EXPERIAN (397-3742)
    TransUnion 1-800-916-8800 

    4. Monitor Bank and Credit Card Accounts for Unusual Activity
     Watch your bank and credit card statements for unusual activity. Some consumer advocates suggest doing so daily, but at a minimum, check your credit report annually. If you let any of the big three know your social security number was stolen, they will send you a copy of their credit report files. Even so, you are entitled to a free credit report annually from TransUnion, Equifax and Experian.

    5. Report any Identity Theft
    To prevent tax-fraud thieves from filing tax returns in your name and collecting any tax refunds, Tom’sGuide suggests reporting theft of Social Security number to the IRS or by calling 1-800-908-4490. They also recommend reporting the theft to local police. A police report could help clear your records and your name, and is necessary if you apply for a new Social Security number.

    6. Beware of Phishing Attacks
    In 2015, ransomware criminals hacked into the Federal Office of Personnel Management and used 22 million stolen email addresses to launch a large-scale attack. Keep your guard up when reading through emails. Don’t open or respond to anything that looks suspicious.


  4. by Michael H. Wasserman

    You read that right, A 480 percent increase according to a May 2017 PSA from the FBI. Its Internet Crime Complaint Center (IC3). Scammers are targeting wire transfers with alarming frequency. As state law mandates the use of wire transfers for most real estate transactions, it's vital that every buyer, seller and professional be vigilant to prevent fraud. Here's what to look for and what you can do to help protect your money - your deal.

    Check the Source: Wire transfer fraud typically starts with a "phishing" email that looks ok at first blush, but is a fake. Real-looking but fraudulent emails may contain:

    A slightly different email address. It could be just one character off. Or using a correct name but from a free account, like gmail, aol or yahoo.

    Legit-looking logos and email footers. Remember, logos can be downloaded from public websites from title companies and banks.

    A working phone number for confirmation. So, if/when you call the provided number to confirm the transaction, a scammer will answer and try to make the transaction sound legitimate.

    Correct names of the parties and/or properties involved. It might contain recognizable information and names that can trick people to click into a fraudulent situation.

    This is scary stuff. So please, throughout real estate transactions (and really, every day) scrutinize your emails to make sure they are legitimate-particularly the ones that ask you for money or to download something.

    Listen carefully to "official" phone calls: A scammer may act like they are calling from or working with your lawyer, bank, a lender or title company. They're real job is to get your personal information and account numbers-so they can create a wire transfer. Or to convince you to send your funds to a wrong account. Unless you already know the caller, do not share or confirm any information. Hang up (you can still be polite, of course) and confirm by calling back through a number you know is legitimate-not one they provide or call your attorney.

    Trust but Verify: Make sure the wire instructions you receive are authentic. One common scam starts with instructions that appear legit, but direct you to wire funds to a fake bank account. Once the money is transferred, the scammer immediately withdrawals the funds, closes the account and oozes back under the rock they came from…with the stolen money…before the theft has been detected.

    Beware Last Minute Changes: Whether by phone call or email, fraudsters build pressure on their victims by timing these messages for the end of day before or early on the morning of closing (Nice touch, eh?). Posing as lawyers or title company agents, they will describe an urgent need to provide corrected or updated wire transfer instructions.

    Stay Out of Trouble by Keeping these Three Things in Mind:

    1. Be mindful of the timing and process for your closing. Know exactly when/where/how wire transfers will occur. Put then in your calendar. 
    2. Consider changing bank and other pertinent financial account passwords-and using complicated passwords. You might do this at the beginning of a real estate transaction to safeguard your accounts from any previous hacking. 
    3. Whenever there is even the slightest doubt or suspicion, confirm all wire instructions with a trusted party. Don't feel pressured to send a wire transfer if you have ANY suspicions. It's simply not worth it.
    Sadly, everyone needs to be vigilant when it comes to online wire transfers, particularly in real estate dealings where so much money must be moved into and out of title company escrow. Watch for fake emails, suspicious phone calls, and last minute changes. Always be careful how you share financial information. (Tell your parents, too.)

    We truly are our own best defense.

    Here's my (real!) phone number, if you have any questions:
    312-726-1512
  5. -->

    by Michael H. Wasserman

    I’m so very happy to welcome attorney John Aylesworth to the practice. He joined us in February 2017 and our clients and colleagues have been reaping the benefits of his good counsel all spring and summer. John is hardly new to our practice; He has worked with us on individual cases for several years already. Now that he is with us full-time, we are able to help even more buyers and sellers move through the real estate process with sanity intact. John really hit the ground running this year, so you may have already met him.

    John brings a great balance of calm and strength, and has a broad depth of experience in residential and commercial transactions, and new condominium development. He brings a roster of his own clients, many of whom consider him an invaluable counselor and friend, another great sign for us.

    Like me, John strives to provide great service to our clients and brokers. He works hard to get contracts to the closing table, on time. John is an attentive listener, a practiced and practical negotiator and a fierce advocate.  

    A little about John: he graduated cum laude from Valparaiso University School of Law in 1996. Following a stint as an Assistant Attorney General for the State of Illinois, John changed his focus to real estate law in 1999 and has been an active practitioner ever since. 

    An avid bicyclist and runner, John prefers to commute from his home in River Forest via bicycle or “L”. A true adventurer, he and his son are on a life-long mission to summit the high point of every state. So far, they’ve made it to the top of 10 (only 40 to go!).


    Please let us know if we can help you in your next real estate transaction. Visit us at MHWasserman.com.
  6. There are a couple of things ALL home owners should know about their abodes. The wonderful Art of Manliness blog hits this point very well in a recent post identifying spots in the home that every owner should be familiar with for safety and maintenance reasons. 
    They suggest familiarizing yourself with:
    • Electrical panel
    • Water shutoffs
    • Gas meter and shut-offs
    • Attic access
    • Sewer access
    • Hot water temperature gauge
    • Property line
    If you had to, could you find all seven? I can, but I'm not necessarily saying that I really know how or what to do at any of these places, particularly if something is going wrong. Fix a gas leak? not my deal, sorry. Close a home purchase? Now you're talking.... 
    At least I can point these things out to Susan or the repair dude as necessary and that's a start. I'm sure you will do better. Especially after you read this.



  7. by Michael H. Wasserman

    I am happy to announce my affiliation with Heroes Home Advantage, a real estate program designed to reward military veterans and those serving our country on active duty, with fire or police departments, teachers and as medical professionals - the everyday heroes who make our lives better and safer.

    The Heroes Home Advantage "Caring Community" offers local heroes a chance for real savings on the cost of buying or selling a home and on key services homeowners need. There are participating Realtors, lenders, appraisers, inspectors, and insurance agents. All offer discounts that can add up to substantial savings for qualifying consumers.

    Sharon Tuckman of Berkshire Hathaway Home Services Chicago Property Hunters is the Real Estate Broker partner for the program. A big thank you to Sharon for inviting me to participate in this venture.

    If you know someone in law enforcement, firefighting, healthcare, a first responder, a teacher or the military they could qualify for this program and save thousands on the purchase of their next home.

    Let me know if you have any questions about the program, or if I can be of service to you.
  8. by Michael H. Wasserman


    Home buyers on the hunt for information about a prospective new home have a new arrow in their quiver - DiedinHouse.com. This web site provides a service just exactly as its name suggests. Customers willing to pay a nominal fee ($11.99) receive a report on whether or not anyone has ever died at a given United States address. 

    Does this matter? I suppose that depends on how curious any given buyer (or homeowner) is about such macabre things. This could certainly effect one's comfort level living at the scene of a past crime or other tragedy. And certainly, there is the money thing - according to Trulia (as reported in Forbes) a prior death or violent crime in a home can reduce its value by up to 30%!

    Illinois home sellers have no duty to tell prospective buyers about a home's violent past or about deaths that have taken place there.  In fact there are only three states of our 50 that impose any duty to disclose such events within 1-3 years of a purchase date. Only fifteen have laws requiring a seller to disclose IF the buyer asks. 


  9. Like them or not, zoned parking in Chicago presents a terrible challenge for Realtors showing properties to their prospective buyer-customers - risk a ticket to show a potential home or park the car blocks away?

    Finally, City Clerk Susan Mendoza is moving a forward on a long wished-for proposal that will be a godsend for these Brokers - an all-access-parking-pass-for-real-estate-agents.

    more details here


  10. by Michael H. Wasserman 


    We live in a terribly unsafe world transacting real estate purchases and sales. There is a lot of money passing between Buyers and Sellers and Lenders and Title Insurance Companies. Unfortunately, there are a great many scammers out there trying to divert those funds away from the deal and into their pockets.

    In the coming weeks, I intend to write about several new rules and protocols being implemented to try to avoid calamities of this sort. For now, I wish to alert Realtors and other lawyers about an increasingly common email fraud. 

    I am seeing multiple emails every day from lenders and title companies with the seemingly innocuous email caption: HUD-1 Approval***.

    Hud-1, of course, the form number for the federally mandated settlement statement used in most every residential purchase/sale and mortgage re-finance transaction. We need these forms in order to advise our clients of their closing costs and the amounts of money they need to deliver (or expect to receive) from closings.

    The messages read - to one extent or another -
    Hello
    Please find HUD-1 Approved!
    CLICK HEREto view attached
    Thanks

    Unfortunately, these are phony links and fake messages. DO NOT CLICK THRU

    these message take the reader to a phishing web site posing as a google docs page.

    Be smart, be safe

    check to see if the sender is a known/trusted closing partner.
    ask yourseelf, if this the way he/she normally sends me my closing statements?


  11. by Michael H. Wasserman

    Cook County property owners can now see their 2014 1st Installment property tax bills online at the County Treasurer's web site. Tax bills are due on or before March 3, 2015.  The first installment bill is not a predictor of what the final annual tax bill will look like. This is merely 55% of last years bill and is simply an estimate of what the final levy may look like.

    IF YOU ESCROW FOR TAXES WITH YOUR LENDER:

    Property tax payers who escrow for taxes with their lender need not take any action - the lender is supposed to pay for you. (OK, maybe you should check to make sure that your lender actually does pays the bill.).

    IF YOU PAY YOUR OWN TAXES:

    Make sure that you pay on time! The County charges 18% per anum interest on delinquent taxes (1.5% per month). You can pay any number of ways, including -


    • Payment the County directly, in person at the Treasurer's Offices or by mail
    • at any local (Illinois) Chase Bank branch location
    • at other select Community Banks
    • online via credit card
    • online via ACH debit (e-check)

    note that there is a $1 fee for ACH payments. There are substantial fees for paying by credit card. Details here. 

    IF YOU ARE CLOSING ON THE SALE OF COOK COUNTY PROPERTY SOON

    Your Buyer, his or her lender, and the title insurance company will all want to either see proof that this bill has been paid, or that you are giving proper credit for this tax bill to the Buyer. 

    If you are paying your own taxes, be sure to send proof of payment to your attorney, ASAP so that you do not have to escrow funds with the title company until it can confirm the payment was made
    If your lender pays your tax bills, be sure to check with them too. The last thing you will want is to have to pay the taxes at closing AND find out your lender ALSO paid the same bill for you. 

  12. by: Michael H. Wasserman

    According to Active Transportation Alliance, the 18-mile Chicago lakefrontpath is the busiest trail in the country, with peak usage at more than 30,000 users per day during the summer. (Lucky me) it is also the main artery of my commute to work most days. Even the most occasional user can tell you - it is simply not engineered/able to accommodate such a large volume of mixed mode users all travelling at different speeds.
    Everyone should enjoy the lakefront. Often. It is one of the City's great assets. Improving park facilities like trail improvements will only enhance the experience for us all. 
  13. by Michael H. Wasserman

    The spring 3.5% closing cost credit incentive offered on newly listed Fannie Mae “HomePath” properties has been extended for one more month. 
    Introduced back in February, the original program applied to offers submitted by March 31st for contracts closing by May 31st.
    The deal now applies for offers submitted by April 30 that close by June 30th.
    This appears to be a highly popular incentive program. I am working with several clients on FNMA purchases fortunate enough to participate here. These are great opportunities to boost buying power for select Chicago area home and condo purchases.
    More information available from FNMA here
  14. The mortgage industry is poised to start making sub-prime mortgage loans again. CNN Money reports that several smaller lenders are now offering loan products to borrowers with credit scores of 640 and lower. Last month, Wells announced it would offer FHA guaranteed loans to borrowers with credit scores as low as 600. Now Carrington Mortgage (a firm I have not seen funding Chicago area home mortgages) has announced it will lend to consumers with credit scores as low as 540.

    In fact National Mortgage News reports that the average minimum FICO score for the 15 lenders with the lowest minimums in fourth quarter 2013 was 571, down from 599 one year ago.

    Lenders are aiming principally at two market segments - young first time home buyers and former owners who were wiped out in the market collapse. Why? two forces seem to be driving the softening of the lending standards: A shrinking pool of new loan applications and rising costs associated with adaptation of the new QM (qualified mortgage) regulations. In other words, some lenders adapting to the standards imposed so that they would underwrite loans more stringently want to cover their costs by making loans to lesser qualified borrowers!

    VA & FHA backed loans will still allow for very low downpayments, but in the private markets, borrowers should expect to pay interest rates as high as  8-10%  and have down payments of 25-30% of the purchase price.


  15. by Michael H. Wasserman

    Apparently, we have learned nothing over the last 8 years. Folks are actually starting to tout no and low down payment loans again. Worse yet, many consumers seem ready to follow their suggestions.

    Back before the bubble burst, the markets were giddy with buyers purchasing homes and investment properties with no (or next to no) down payments. Conventional wisdom at that time held that property values could only go. up. Huge equity gains were inevitable. Profits would flow to anyone smart enough to buy a home - even more so for those who bought without actually paying anything out of pocket.

    Then the market collapsed in 2007 and the fallacy of that theory became painfully apparent. Property values plummeted. Owners went from no equity to negative equity. Severely. HELOCS were frozen or worse yet, called due by lenders. Properties became unsalable - sellers could not afford to pay out the shortages. You remember, don't you?

    The after-effects from all of the resulting delinquencies, defaults and foreclosures are still with us. Thousands of families displaced by the loss of their homes. Countless others still cannot move, or have become "accidental" landlords renting out properties they cannot sell, owing more to their mortgage lenders than their homes are worth. Many have sold short. Some lenders forgave that debt, triggering huge income tax liabilities for borrowers. Others sold their homes but still retain repayment obligations (deficiencies) to their lenders. Many, many have - or will - file for bankruptcy too.

    Things are getting better to be sure, but I still see more than my share of short sales, REOs, and sellers forced to write checks at their closings to cover their sales. As optimistic as I am for the spring and summer markets before us, no reason to believe that the distress sales are now all behind us. Would anyone who lived through this once buy a no down payment home again?



    Small down payment loans did not (by themselves) cause the markets to unhinge, but homeowners holding more equity in their properties certainly weathered the economic storm better than those who did not. We all lost net worth, but many of us have stayed in our homes and are emerging (more of less) unscathed.

    But home ownership remains the American dream and getting there without having to fork over a large down payment is certainly as tempting as ever. Buying real estate for little or nothing down is still the holy grail for many and folks are actually touting these strategies again.Not just in hushed whispers from ill lit alleyways.

    Take the good folks at the Ready for Zero Blog who posted this article last week, since picked up and rebroadcast at Lifehacker, breaking down several different ways to do just that. Then check out the comments below these articles to see the reaction of blog readers. The author does give a head nod to higher long term costs when buying this way, but offers no warnings about the risks buyers take should values decline or life circumstances change.

    Truth be told, I have not yet worked with home buyers using conventional financing to buy homes without down payment, nor have I seen or heard that these arrangements are actually being utilized. Notably, the article's author did not name any specific lenders will to make these loans either, so it is a bit hard for me to gauge whether this is even a viable possibility. On the other hand I have worked with several (well qualified) buyers who have used VA loans and other narrowly defined subsidies / loans offered to help home buyers acquire properties in specific targeted urban neighborhoods or for employees make affordable purchases.

    I do appreciate that vets, teachers, and urban "pioneers" are afforded these special opportunities. A grateful nation does precious little to support our defenders once their service is completed.  The opportunity to default on a home loan is  the least we can do to say thanks.

    But, these loan are not for everyone. Far from it. These are high stakes gambles and I fear for anyone who reads these articles touting no down payment loans who might not consider even a cursory warning of the risks  Those writers? probably have never heard of George Santyana either.
  16. By Michael H. Wasserman


    You might not know it from a look out the window or a walk around the block just yet, but the spring real estate market is upon us, and home buyers are out en masse in Chicago searching for the right opportunities.  Everyone’s favorite semi-governmental real estate entities, Fannie Mae and Freddie Mac both seem intent on capitalizing on this now to further reduce their respective REO inventories. Each has announced new incentive packages to try to entice prospective buyers. Notable in the two announcements is the differing strategies they are using. Fannie Mae is offering fairly sizeable incentives to buyers themselves. Freddie Mac, while offering a token to buyers seems to be much more focused on motivating the sales agents that guide buyers. 


    Last week, the Federal National Mortgage Association announced that Buyers can receive up to 3.5 percent in closing cost assistance when purchasing Chicago area Home Path properties under its “first look” program. The first look period offers FNMA owned properties to prospective owner-occupant & public entity buyers exclusively for the first 15-20 days they are listed for sale. The closing cost contributions will be available on purchase offers made no later than March 31st on contracts that must close by May 31st. Homepath typically also offers special financing opportunities as well, although not everything that is “special” about that financing is necessarily beneficial to borrowers: For example, Homepath financing does not require a property appraisal requirement. Buyers might end up over-paying for homes relative to market if they do not do their homework.

    By contrast, the Federal Home Loan Mortgage Corporation announcedthis week that it would extend the current winter sales promotion to all first look offers received by April 15th. Freddie Mac is taking a different approach to the incentives: here, the Realtors who list and sell its Homesteps properties stand to make an additional $500-1,000 bonus. Owner-occupying buyers may also be receive a $500 concession that can be applied towards condo assessments, home warranties or flood insurance. These contracts must close by May 30th. 

    Buyers wishing to purchase foreclosed properties often see great opportunities to buy properties at prices discounted off the ordinary market valuations, but these opportunities also can present some measure of risk and extra effort. As always, a good idea for prospective buyers to assemble a competent, experience real team (Broker, Lender Inspector, and Lawyer) to help steward them through the process. 

  17. By Michael H. Wasserman

    Closing on residential properties in Chicago generates a lot of paperwork. Particularly if when mortgage financing is involved. Part of my job as an attorney for home and condo buyers is to help with loan application/documentation and to review the at-closing loan package with them. The number of documents presented at closing seems to grow every year. It can take a while to slog through the reams of disclosures, authorizations and certifications most lenders send to the closing table. Pens run out of ink. Rest breaks are often needed. Stacks of paper get pushed from one end of the table to the other and then back again.

    The two most typical reactions to all of the signing are (A) recognition of all the trees that "give their lives” in service to the lenders and title companies, and (B) Hopes / wishes for paperless closings.

    The mortgage financing process for some home buyers is getting a bit "less inconvenient" and a step closer to paperless.  Effective immediately, FHA is accepting e-signatures more broadly from the lenders it works with - and their borrowers/applicants. This offers some wonderful convenience and efficiencies in an otherwise inconvenient, aggravating and grossly inefficient process.




    FHA joins The Federal Home Loan Mortgage Corporation (FHLMC) which already allows e-signature on initial loan documents.

    Plainly, there are a great many documents that must be generated to apply for, process, and document residential mortgage loans. Historically, the initial paperwork were mailed / delivered to borrowers who had to "wet sign" and return hard copies of the documents. Even when emailed to consumers, the process still requires pen-to-paper impressions. E-signature of course obviates the need to print documents and is a whole lot quicker/easier.

    FHA's announcement applies to all origination and third party documentation for single family properties, and significantly. also include REO (bank owned) transactions.

    Best of all, we are told that starting next year, FHA will also allow E-signatures on mortgage loan Notes (The Actual Loan Agreement). This may well open the way again to E-closings.

     Change takes time so I fully expect that for the foreseeable future, we will still spend most of our time at closings reviewing and wet-signing paperwork the old fashioned way, but the trend towards paperless continues and is something to look forward to.
  18. by Michael H. Wasserman


    I review title company charges and all other closing costs with the Buyers and Sellers i represent. Many (often rightfully) comment on the vast array of different fees that must be paid and the total cumulative effect these charges have on their closings. Akin to all the regulatory charges on a telephone or cable bill. Industry jargon and abbreviations provide an easy short hand to us practitioners but does not make the numbers any clearer to consumers.

    One such charge / classification is the CPL (Closing Protection Fee). This state mandated collection obligates a title insurance company's underwriter to cover any losses suffered to a buyer, seller, and lender in the event that the closing agent either does not follow closing instructions or misappropriates funds from the closing.  In Illinois, Sellers pay $50.00 per transaction. Buyers pay $25.00 ($50 if there is a mortgage loan).
    This is a relatively new charge, so many buyers and sellers who do not remember it from past transactions comment.

    Then, every once in a while we see news like this and it becomes clear why this money well spent.


    The owner of a southwestern Illinois title company faces up to a quarter century in prison after admitting in court that she defrauded clients to support her gambling habit. [the owner] pleaded guilty Friday in East St. Louis to charges of wire fraud and structuring financial transactions to avoid currency-reporting requirements. Authorities say the owner of Metro East Title Co. in Belleville was obligated to hold escrow, settlement and closing funds in a trust account. But investigators say she instead pilfered those funds for gambling. The company was accused in a federal lawsuit last October of failing to deliver $385,000 in proceeds from a land sale to [the seller].
    source: Pantagraph.com

    I fully expect that the title insurer must cover this loss for the Seller, and that they will (eventually) recoup those missing dollars.  Having never worked with this title agency before, I do not know if there were any warning signs to warn the buyer or seller of a problem before the funds went missing. I do make a deliberate effort to only work with reputable title insurers and agencies when I purchase title insurance and escrow services for my clients. Sometime however, we have no say in the title insurance selection process and have to trust other parties to the transaction do the same.

    Closing protection however takes much of the risk out of closing with lesser or unknown title agencies. We hope not to ever have need to make a claim for closing protection, but am glad that we can.
  19. By Michael H. Wasserman

    Nothing gets the phones ringing in my office quite like property tax bill season.  Cook County mailed out 1st installment bills this past week. They are due by March 4th. The taxing system is dreadfully complicated and consumers, particularly new property owners, have questions.
    Here are some of the most common questions received in my office and, of course, some answers too!

    WHAT TAXES ARE WE PAYING?

    All Illinois property taxes are paid one year in arrears. In other words, the bills we all just received in 2014 are actually taxes due from 2013. This presents an obvious question for anyone who closed last year or earlier this month - is this my bill or the sellers?


    WHO PAYS THE BILL - BUYER or SELLER?

    In all but the most exceptional circumstances, if you own the property now, you this is your bill to pay. This may not seem right, paying a tax bill levied against property you did not yet own, but (assuming you had a well drafted purchase contract and competent counsel) the seller gave a credit at the closing to “cover” this expense. The tax credit given at closing is analogous to the experience of dining at a restaurant with a companion who leaves the building before the waiter sets down the check - but gives you money to pay his/her share. Once the bill is down and the companion is gone, that bill is yours to pay. Hopefully, you and your friend (or sellers) estimated well. We lawyers do our best to project likely changes in the tax levy and try to allocate the taxes fairly. The dynamics of the deal - including the relative bargaining strength of any given buyer or seller may impact the actual “fairness” of a tax credit allocation, and can impact the formula used to calculate the credit. This may include arrangements to re-allocate taxes once the final tax bill is released. Check your closing papers or consult your attorney to see if there is a re-proration agreement in place for your purchase.

    WHO PAYS THE BILL - BUYER or DEVELOPER?

    Those exceptional circumstances where a Buyer may not have to pay the bill? Some developers just do not want to leave credits on the table at a closing. They insist on paying year-of-closing taxes. New construction buyers should double check their closing settlement statements or check in with their lawyers to see what arrangements were made there.

    WHO PAYS THE BILL - BUYER or LENDER?

    Some, but certainly not all Buyers pay their lenders money every month to cover not only loan principal and interest, but also escrow funds for taxes, insurance, and possibly mortgage insurance. If your lender collects an escrow - resist the temptation - do NOT pay this tax bill. That said, if your lender collects and escrow, DOUBLE CHECK to make sure that they actually pay the bill for you. From time to times gremlins in the system cause errors.

    Here is my suggested three step approach

    1. confirm with your lender that it paid at least “something” to the County for your taxes. This can typically be done by checking with your loan servicer online or by telephone.
    2. surf to the County Treasurer’s web site and confirm that the bill is paid. In full. If the numbers match up, comparing the bill to the amount your lender paid, to the amount the County received you should be good to go. Any variance in the numbers? There may be a problem.
    3. make sure that taxes are paid  all parcels of property. Check the tax status for all side lots, deeded parking spaces or condo storage spaces too.


    THIS THE WHOLE ENCHILADA, RIGHT?

    Sorry, this is only a partial tax bill. All other Illinois counties show you the full annual tax amount, but only require payment of half the amount in each of two installments due. Collar county bills should be mailed out in late April or early May.

    Cook County on the other hand, has not yet determined the actual tax levy. You are looking at an “estimated” bills - 55% of last year’s (2012) invoice.  The other shoe should drop in late June when the second installment bill is issued out, likely to be due and payable by August 1st.

    THIS SEEMS TOO HIGH - WHAT CAN I DO TO LOWER MY TAXES?

    I recently posted a menu ofhttp://wasserblawg.blogspot.com/search?updated-max=2014-01-16T16:00:00-06:00&max-results=3 tax exemptions that can possibly lower tax bills.  There are other devices too. I will describe some of them soon in a future post.


  20. by Michael H. Wasserman, Attorney at Law

    A startling number of condominium and homeowners associations do not keep reserve funds on hand.Reuters reports that 70%. of all American associations. are underfunded, a 12.5 percent increase compared to 10 years ago. That number seems to be rising.

    Certainly, there are plenty great reasons why home buyers might consider condominium projects or houses that are part of a planned community or homeowners association.  Common expenses are spread among the community members, which can blunt the costs of maintenance and can also make available more & nicer amenities for all to enjoy. How popular are association communities? Four of five buyers of new homes, including condos buy into an association. 63 million Americans live in community. By contrast, only 2.1 million did so in 1970. 


    Those pesky future costs for maintenance and repairs are the issue here. The last years of financial turmoil following the mortgage market melt down strained many associations, who’s home owners were unable to make their monthly assessment payments. Many associations were forced to defer maintenance and repairs for lack of available funds. Even under the best of time, it takes strong discipline and community support to budget savings for future costs.  We know this to be true in all aspects of life, including funding our own retirement accounts (or public employee pensions) This is particularly difficult in smaller associations where unit owners - who do not even know that they want to live in a home beyond the short or mid term - would rather keep monthly payments low than worry about / fund future repairs that might not be necessary until long after they move out. That sort of thing. 

    Problem is, once those maintenance/repair issues come up, associations and owners face different choices: borrow money as a community or levy special assessments to pay the bills. 

    Condominium due diligence investigation is a critical component of any real estate lawyer's job. Are there known maintenance or repair issues that will need to be addressed? Is there a plan in place to pay for those costs? Does the association have an adequate reserve? Is the association management pro-active or reactive in the way it deals with such matters? Is the buyer willing (and able) to take the risk of an underfunded association? 

    Such as they are, the only real checks and balances come at the point of a purchase and sale. Mortgage loan underwriters will only approve loans where a given association's reserves are deemed adequate relative  to annual assessments. 

    Sharp buyers and their lawyers also have the right to - and really must - review association financial records before closing on a contract. All others proceed at their own peril.

  21. by Michael H. Wasserman, Attorney at Law

    My clients and the friends & colleagues that refer them, mean the world to me.

    In their honor, a portion of the fees generated from each successful Chicago area real estate closing is donated to a worthy charitable organization, as selected by the Client.

    The Thanks to You program - now in its fourth year - is both an expression of my gratitude to clients and friends of the program, and a statement of our collective efforts to build stronger communities.

    In 2013, ten select organizations collectively received well in excess of $7,500 to promote better education, better health, and the fine arts.  The running total over the past three years, has now surpassed $18,000.


    2011 marked the first time a client matched my pledge. 2012 marked the first time a Realtor did so too. 2013 saw the first double - a client and broker matching on the same deal. I work with some pretty terrific people.

    This year's program should be even better. Our 2014 grant recipients will be:
    • WORKING IN THE SCHOOLS - Promotes literacy and the love of reading among low-income and minority students in Chicago Public Schools by providing one-on-one tutoring and mentoring.
    • READING IN MOTION - Provides at-risk children from Kindergarten through 3rd grade with the key tools required to achieve grade-level reading, through the power and discipline of the arts.
    • ALZHEIMER'S ASSOCIATION - The leading, global voluntary health organization in Alzheimer care and support, and the largest private, nonprofit funder of Alzheimer research.
    • RESPIRATORY HEALTH ASSOCIATION - A Chicago agency that promotes healthy lungs and fights lung disease through research, advocacy and education through community-based interventions.
    • WEST TOWN BIKES - Promotes bicycling among Chicago’s youth with a focus on under-served populations. WTB teaches independence, professional skills, environmental stewardship, & the importance of exercise & good nutrition. Earn-a-bike youth programs offer instruction in bike building, mechanics, & bike safety. (Even a little science too!)
    • GIRLS IN THE GAME - Girls who grow up playing sports develop into healthier, happier and more successful women. Chicago’s leading girls' health and fitness organization empowers making healthier choices and develops confidence and leadership skills needed to succeed on and off the field. 
    • EMERGENCY FUND - Provides immediate no red tape, short term financial aid to low income individuals and families on the brink of crisis. Crisis Solution Grants may cover transportation passes, food vouchers, eye glasses, prescription medicine, and clothing, rent, and/or utilities of clients in need.
    • TREE HOUSE HUMANE SOCIETY - A cage-less, no kill cat shelter dedicated to the rescue & rehabilitation of sick, injured & abused stray cats, with a particular .focus on the care and placement of stray cats with special physical & emotional needs.
    • TIPITINA’s FOUNDATION - Supports New Orleans’ & Louisiana unique musical culture by providing youth band instruments, workshops, internships and coop work spaces to local artists
    Do let me know if you want to know more about this project, these organizations, or of course, if you are interested in working together on your next home purchase or sale.

  22. by Michael H. Wasserman, Attorney at Law

    The National Association of Realtors is reporting that our Consumer Financial Protection Bureau (CFPB) is asking for feedback on the most stressful, confusing, and problematic areas for consumers when it comes to the closing process in a home purchase. 
    Responses must be submitted on or before Feb. 7.
    The agency is hoping to identify the main consumer “pain points” at closings as part of its “Know Before You Owe” initiative, which is aimed at improving the mortgage process for consumers. 
    CFPB is also looking for  answers to 17 specific questions about closings and consumer preparation, common errors, the role of other parties in the process, and about consumers’ comfort with the overall closing process. The public is encouraged to comment on the common problems consumers face at closing; where consumers turn for advice during closing; and what documents and terms are the most confusing during the process.
    The CFPB is collecting comments not just from consumers but also real estate professionals, settlement agents, mortgage lenders, housing counselors, real estate attorneys, and others with a stake in the closing process. 
    To comment online, visit the Federal Register 
    For more information on submitting responses, visit  What Are Your Gripes About Closings?

  23. by Michael H. Wasserman, Attorney at Law

    Applications for the Cook County property tax Homeowner, Senior Citizen and Senior Freeze Exemptions are now available from the County Assessor's Office.

    Homeowners who apply & qualify for exemptions will receive deductions off of their second-installment property tax bills - which are expected to be issued by summer 2014.

    Forms are available as follows:


    More information is available from the County Assessor

  24. by Michael H. Wasserman, Attorney at Law

    The City of Chicago offers refuse rebates to condominium and homeowner associations that have give or more units. Rebates are paid one year "in arrears" so that the next round of rebates will be against waste collection costs incurred in 2013. The 2013 rate is $25.00 per unit. .

    Applications for the rebate must be submitted to the associations' local aldermanic office ASAP (eg, in the 48th ward, no later than January 12, 2014).

    A full description of requirements, qualifications and forms needed to request the rebate is available from the Chicago City Council, Department of Finance.

  25. by Michael H. Wasserman, Attorney at Law

    The Wall Street Journal reports that lenders are offering lower down-payment requirements to lure more borrowers wishing to purchase more expensive homes. 
    Many small lenders, (primarily community banks and credit unions), are now willing to cover jumbo loans with 5 percent to 10 percent down payments. In Chicago, jumbo loans are those that are $417,000 or higher. 
    These opportunities are being made possible by mortgage lenders wishing to increase market share as real estate property values are on the upswing coupled with the re-emergence of mortgage insurance companies will to insure against the risks of borrower defaults. 
    In December, Mortgage Guaranty Insurance Corp., a private-mortgage insurer, increased the maximum mortgage it will insure from $750,000 to $850,000. Genworth Mortgage Insurance also raised its cap to the same level from $625,500 in October. Both insurers say they will consider even larger loans on a case-by-case basis. Similarly, United Guaranty, a subsidiary of AIG, which insures mortgages of up to $850,000, says it introduced a limited program this year for loans of up to $1 million. Another insurer, Radian Group is also reportedly considering raising its $850,000 cap. 
    this all comes at a price to buyers - loans will likely be a bit costlier. To begin with, most insurers charge an additional 20 to 60 basis points for these loans compared with a regular-sized mortgage. Some lenders permit a one-time upfront payment to cover this fee, which for jumbo loans can total roughly 1.2% to 5.7% of the total loan amount.
    While i do not lend mortgage money myself, i can (and do) help clients evaluate mortgage loan offers and opportunities, and can (and do) introduce clients to qualified/competent lenders all the time. 
    Questions? Concerns about your transaction? Give me a shout and let me help out.

    The complete Wall Street Journal Articlehere.