"You've Caught the NET!"

Retail Industry Specialists, including Maxine Lauer of Sphere Trending in MI, refer to the 15-34-year-old-set as "Generation Now." Perhaps you are intimately acquainted with the prevailing attitude of many younger consumers: "They want what they want . . . and they want it NOW!"

Lauer's thoughts, as reported by Chicago Tribune Real Estate Reporter Mary Umberger, in the May 4, 2012 edition of The Trib, confirms what Dean's Team Chicago, and many of our Real Estate Colleagues and Students, have seen first-hand - many young people are delaying some of life's most important decisions.

Up until recently, it was those in their 20's who began contemplating lifetime thoughts like marriage, family, planned career, and a home ownership strategy. Homebuyers in Chicago often started with small condos or fixer-up homes, followed by increasingly-larger condos, then single-family homes, within a few years, as their relationship and household size typically grew.

But, in today's shifting economy, attitudes, and behavior, seems to have changed. Entry-level jobs are often harder to come by, as older Baby Boomers are retiring later. Marriage and family - sometimes delayed until recent graduates find good-paying jobs, with enough money to cover ever-higher Student Loan Balances. And, without short-term stability, more young people are renting longer, rather than taking what they see as a somewhat-risky plunge into home ownership in a Turbulent Real Estate Market in Chicago, and elsewhere.

Others elect to stay at home with their parents longer, rather than move away. Many did all they could to avoid staying at home, not even a generation ago. Today, any stigma associated with living with Mother and Dad has lessened with its new-found popularity - and parents are often welcoming back their recent grads, hoping that a rebounding economy will give them a more solid foundation down the road. Most explain their recent return to the nest as a sure way to bank more money for that Housing Down Payment, at the right time.

According to Lauer, many younger homebuyers are opting to begin with a single-family home right away, rather than moving up from condos or small homes, as was the case several years back. A sizable chunk of recent grads - 35% - move back to an Urban Environment comfortable to them. Many attempt cosmetic renovations on older homes - such as 1920's to 1950's Brick Bungalows and Classic English Tudors. Here in Chicago, this might bode well for the Chicago Neighborhoods of Old Irving, Portage Park, Ravenswood, and Norwood Park, and older suburbs such as Evanston, Oak Park, and parts of Park Ridge, Mount Prospect, and Arlington Heights IL. Each area comes chock full of solid, vintage housing stock.

Many young homebuyers like the "authenticity" of these older homes, suggests Lauer. They see them as uniquely styled, warm and homey, and of superior craftsmanship than some of the newer suburban tract homes many grew up in.

Unlike the "Tim the Tool Man" set of the 1980's and 1990's, however, many younger homebuyers have little idea on how to renovate an older home - but they do have a willingness to learn, and to work hard for their "sweat equity." It's also no surprise that they want the classic look outside, and brand new kitchen and bath updates inside. They like Open Floor Plans, alongside the unpainted vintage woodwork and trim..

Lauer sees a continuing surge of interest in city homes, in close-in, but not-yet-too-expensive neighborhoods. Or, for those concerned about top schools, close-ring suburbs, not too far from the bustle of the city. She sees more distant suburbs, and less distinctive homes, losing some popularity longer term.

In addition, Lauer mentions a different outlook of younger home buyers. With the recent collapse of home prices in many neighborhoods they like, they look at a home purchase not as merely an build-your-nest egg investment, but as a long-term commitment. They have shed much of the optimism of their parents, who lived with what seemed like decades of unabated growth, in income, and home equity. Many are opting for a more studied approach, more risk averse.

Indeed, times have changed. Likely, a different breed of consumer, and homeowner, will emerged from today's economy. And, in the opinion of many in the older generation . . . that might be a good thing!

Please view our post today via BlogChicagoHomes.com.

DEAN'S TEAM CHICAGO

Under "normal circumstances," IL Foreclosures take about nine months to one year to run their course - from the first court filing of mortgage delinquency, until the homeowner if finally evicted and forced to leave their home. For many homeowners in distress, however, circumstances here are far from normal. Indeed, it is not unusual for some homeowners who haven't made a mortgage payment in two to three years to still be in their homes, waiting to be forced to leave.

Many blame the record high levels of pending foreclosures on the high level of distressed inventory that has come to market since the collapse of the housing boom, traced back around Chicago to mid-2006. Banks are just too overloaded to proceed with foreclosure in a timely manner.

The Robo Signing Scandal, identified in 2010, targeted lenders who were sloppily rushing through foreclosure paperwork on thousands of delinquent mortgage loans, without thorough supervisory review or completely following statutory time requirements. The lenders' behavior was the subject of a massive court settlement impacting homeowners facing foreclosure all over the U.S. this year.

Casual observers may seem envious of those homeowners in the midst of a foreclosure delayed - without paying their monthly house payments, these distressed homeowners often attempt to pay down their remaining debt during their waiting time. But they continue to stress over their inevitable eviction - they don't usually know exactly when their forced move-out will take place.

From the perspective of the lenders against which the homeowners have defaulted, delinquent mortgages are assets not performing, and not providing a return to the lender. In addition, foreclosed homes on a block tend to draw down neighborhood property values - many who know eviction is imminent, eventually, refrain from performing normal maintenance on their soon-to-be-former homes.

According to Reporter Kathleen Lynn of The Bergen County (New Jersey) Record, as published in The Chicago Tribune, the average time between the day the lender starts the foreclosure process and the eventual eviction of the delinquent homeowner in NJ can take 2 1/2 years.

Most of today's homeowners who fell delinquent either leveraged too much to purchase their home originally, or borrowed too much against it with the easy Cash Out Refinances and Equity Lines of Credit easily available up until a couple of years ago. Monthly payments increased, leaving little wiggle room for many as the economy slowed and jobs withered as early as 2007. When property values began to slide at about the same time, sale or refinancing became tougher, then impossible, for many.

Some considering the Short Sale route - trying to sell the property for less than what is owed on the mortgage, with the bank's blessing. Others sought Loan Modification, too many times unsuccessfully. Also, lenders do not accept partial payments on a delinquent home loan - doing so will considerably delay a potential foreclosure.

Seeing no other logical option, a growing number have tended to stay in their homes as long as they can, accepting the severe credit consequences that can prevent purchase of a new home for seven years or more.

In the end, when they are forced to leave the home where many have lived and often raised their families in for many years, the only option is renting, and a long period of credit rebuilding. For many, however, the dream of returning to the comparative normalcy of owning their own home might be a long, elusive way off.

Please see our post today via BlogChicagoHomes.com.

DEAN & DEAN'S TEAM CHICAGO

Have you read all the news?

The U.S. Economy is improving. Indicators are positive. Unemployment Rates, both across the U.S. and here in Chicago, are down. Optimism is building.

So why is the Housing Market in Chicago still floundering? According to some, the attitude of Home Sellers may hold the key!

Last week, in an article posted by Chicago Tribune Real Estate Columnist Mary Umberger, Mary interviewed Syracuse University Professor Gary Engelhardt. Mr Englehardt seemed confounded by the continued negative attitude of today's home sellers, as well as those homeowners contemplating whether or not they should sell.

According to a study recently completed by the Research Institute for Housing America, and the Mortgage Bankers Association, 80 percent of those surveyed felt now is a good time to buy a home.

Polling home sellers, however, provided a far different answer. Today, only an estimated seven percent feel now is a good time to put their home on the market to sell! During better days in the real estate market, as recently as 2005, as many as 60% of home sellers harbored positive feelings about selling their homes.

Across the U.S., the inventory of homes for resale by individuals (not by banks who foreclosed on them) is down more than 20% over the past year. Perhaps, Englehardt says, many prospective home sellers don't believe it is in their best interest to sell at this time.

Many, of course, are under water, owing more on their outstanding mortgage balance than their homes are worth today. (Depending on which Chicago Neighborhood or Suburb you are looking at, as many as 42% of homeowners may now be under water, according to National Association of Realtors estimates). Most homeowners do not have the bring to closing to pay the deficit - even those who can bridge the mortgage gap are unwilling to do so.

Others may still have not gotten realistic as to the value of their home in today's market. Indeed, several Dean's Team clients refuse to realize that their home's value may be far lower than what they originally perhaps over a decade ago. Comparable property pricing from even a year ago still is higher than the market bears today.

Many say they are waiting for price levels to improve, according to Engelhardt. But that wait will likely be a long one, as many project. The Mortgage Bankers Association sees essentially flat pricing over the next couple of years, as a "shadow inventory" of low-priced, distressed and bank-owned homes lay in wait to hit the market.

But when the market eventually sees higher pricing, or when sellers are forced into selling by family or financial circumstances, will the number of potential buyers still be as strong? Hard to predict, he says.

What might turn things around? Englehardt points to the obvious - the number of underwater buyers has to decline, the employment picture has to improve, along with salary levels. So does the general level of optimism that better times lie ahead.

It seems, however, that these changes are likely to come slowly. Here in the Chicago Neighborhoods and Suburbs our Real Estate Team serves, we're seeing a pick up of homes and condos under contract. But those selling are doing so at low prices, and many of these sellers have Short Sales - often the only way out when you owe more on the mortgage than your home is likely to sell for.

Please connect to our post today via BlogChicagoHomes.com.

DEAN and DEAN'S TEAM CHICAGO

Hope you enjoyed the weekend, folks!  Nice, but a bit cool and breezy, here in Chicago.

Here in the Chicago Real Estate Market Dean's Team works most frequently, prospective home buyers calling from all sources - referrals, property ads, and the Internet - generally ask one question FIRST as it pertains to their home search -

WHERE CAN I FIND A STEAL!

Our own perception, often times, is that most new buyers we encounter aren't just looking for a "Good Deal." They are looking for the "Steal of the Century!"

Most of these prospective buyers have little money down. Some have Average or Below Average Credit. But those who have stronger credit credentials, and more cash - they want even more of a STEAL!

Everyone considering any kind of real estate these days believes Home Sellers, so desperate to sell, will happily give their homes away. Some have had the unpleasant experience of selling their own home at far less than they ever would have recently imagined, and hold less equity in hand to buy their new home. Falling short of simple retribution, many feel they can more than make up their own losses when they buy a replacement property.

Others see the over-the-top inventory of Short Sale and Bank Owned Properties at deeply-discounted properties. Not understanding the complications often involved with buying distressed properties, and their often below-average condition, dream-filled buyers see even stronger savings to be had by shooting a Lowball Offer on one of these homes.

Virtually all buyers see a lack of urgency in making a commitment to buy quickly, as they see a continued-weak economy, high unemployment, and so many homes from which to choose due to high for-sale inventory levels likely to drive home prices down even further in the near and mid term.

Chicago Tribune Real Estate Writer Mary Umberger, in Tribune article from October 7th, interviewed two established real estate practitioners from a large national franchise - one the CEO of this 2,500-office Real Estate Brokerage Franchise, and also the President of a Franchise Brokerage in the Western Suburbs of Chicago.

Both professionals see the Chicago Real Estate Market continuing flat through 2012. The National Association of Realtors predict very low increases in both number of properties sold and average sales price - around 2% - through next year, nationally. Across the U.S., home sales improved during the Second Half, 2011, versus the same period in 2010, but First Half, 2011 prices were weak, resulting in similar, slow growth predicted for the balance of this year.

The Franchise CEO sees increased interest in properties at the very high and very low end of the pricing spectrum, with home sales in the middle tiers being squeezed the most. The interviewed broker, as well as our own Team, sees an uncharacteristically-weak early Fall season.

Indeed, some of our buyer inquiries seem to be just "testing the waters" right now - despite very attractive home and condo prices here in Chicago and the Suburbs, and near-record-low Mortgage Interest Rates, still around 4% for a 30-Year Fixed Rate Loan, with some 15-Year Fixed and Adjustable Rate Loans even more affordable, for those who qualify.

Some we personally speak with indicate concerns over their own job security. Like in 2010, many want to make sure they don't receive a "pink slip" over the holidays and plan to put off their final home buying decision until after the New Year. Others see prices continuing to slide downward next year, and don't want to pay too much, then see their likely purchase price erode over the next few months.

A few have questioned whether the U.S. Mortgage Interest Deduction, and its thousands of dollars in annual tax benefits, will continue as The Fed struggles to cut the national debt. Most agree, however, that a radical change to this cherished deduction seems unlikely - especially before the next Presidential Election.

Others see their next home purchase likely to be a long-term stay. Skeptical buyers, who, in better times, moved up every couple of years as their own financial and family situations improved, are fearful the next home they buy might have to last them and their families quite a bit longer. They hesitate to jump at one of the first places they see.

When will greater stability come? It's difficult to see! Short term, those with cash will buy at low prices, pushing values down even more. Upgrading buyers will have less equity to invest in bigger, more expensive homes, muddying their sales future.

But no one can predict what any unpredicted, positive change to the economy, and jobs outlook, will do to continued-high housing inventory levels, and its impact on consumer confidence to buy.

So, for now, buyer hesitation continues. Unless . . .

Please read our post today via BlogChicagoHomes.com.

DEAN MOSS & DEAN'S TEAM CHICAGO

Morning, Folks!

Here in IL, the rate of Home Foreclosures continues to drop. According to Ivrine CA-based Realty Trac, as discussed in the August 11th edition of the Chicago Tribune, all foreclosure activity fell 3.5% in July versus June, 2011, and stands nearly 46% lower than July, 2010. According to the Realty Trac Report, one in every 498 homes has some sort of foreclosure action filed against it in court.

Still, in the North and Northwest Sides of Chicago Neighborhoods Dean's Team Chicago works extensively, we're often met with one out of every two properties for sale in some sort of financial distress - either in foreclosure, or at pre-foreclosure, as a Short Sale, where the seller owes more than the home is being sold for. The problem seems more acute in certain, once-hot, neighborhoods adjacent to those many consider most desirable, and for condominiums.

For example, one popular condo building in the North Side Chicago Neighborhood of Rogers Park has nearly all of its units priced below their outstanding mortgage balances, and those in this building that have closed actually sold for 45% of their original asking prices when the older building was converted to condos in 2004!

So, here we sit, approaching the Third Quarter, 2011, and most in the know about Chicago Real Estate have little clue as to what is going to be the Magic Bullet to eventually turn our Real Estate Market around.

Mortgage Interest Rates continue to remain low - often times, approaching 4.0%, for those with strong credit and large down payments or re-fi equity. Choices abound, even in the most chic Chicago Neighborhoods and Suburbs. And many sellers, very motivated to sell - are willing to cut a bargain nearly unthinkable a few years ago.

But concerns among potential buyers persist! Are they getting the best deal? Will prices continue to trend even lower? Will I still have a job when the closing rolls around? What happens when banks release the thousands of new foreclosed properties they are holding on their books?

And, one that seems the most scary to those of us working in Real Estate - is Chicago Real Estate still a good investment? (Of course, we contend, Real Estate is THE BEST INVESTMENT, long term - having a place to live is non-negotiable!)

Most practitioners and industry experts agree - the non-stop-appreciation Glory Days of a few years ago are likely not to return soon. But, at some point, in an improving economy, with an improving employment outlook, a stable housing market likely WILL come back.

What say you? WHEN? And what will be the one "Magic Bullet" to bring the Chicago Real Estate Market back?

Please share what you think!

Read our post today via BlogChicagoHomes.com.

DEAN & DEAN'S TEAM CHICAGO

Here in Chicago, and in most Chicago Suburbs, Average Home Sales Prices have fallen considerably since their zenith in mid-2006 - nearly 5 years ago.  In some Chicago Neighborhoods, in the experience of our Team members, condo prices are one-third of what they were during those "buy at any price" days.  Many single family homes have shed 40% or more of their potential cost versus the housing boom here.

On the surface, it seems, many home sellers have gotten the message, and are willing to lower their prices - often substantially - to meet the new market and sell their homes in a timely fashion.  Even so, many of today's buyers still feel homes they are considering are overpriced - some by as much as 20%!

The findings come from a new survey just released by HomeGain, a company which sells names of prospective home sellers, generated through their Internet Marketing Programs, to Real Estate Brokers and Agents across the U.S.  Chicago Tribune Reporter Mary Umberger discussed the company's findings in the April 8th edition of The Trib.

Is this counter-intuitive, perhaps?   Wouldn't it make more sense for home sellers, tired of the continuing declining market in many Neighborhoods throughout Chicago and the Suburbs, to understand the necessity of pricing right?  Doesn't it seem reasonable that prospective home buyers see these newfound discounted homes as true values, swapping them up quickly?

Not according to the HomeGain survey, apparently!

Of nearly 750 Real Estate Agents surveyed nationwide, responding agents indicated that 76% of the owners they eventually contracted with to sell their homes thought their listing price was too low. 

The HomeGain Survey also polled 1,600 potential home buyers.  They found that 69% of them still thought most homes on the market were overpriced.  Of those, 33% thought they listed homes they viewed were as much as 10% too high.  Another third felt their viewed homes were too high by as much as 20%!

The drumbeat of the media tells home buyers bargains abound, and, indeed, many of our Team's prospective buyers say they are looking for an "incredible bargain" when they buy.

However, far too many sellers feel trapped in a too-high price range.  The high-leverage financing many took out several years ago has left them underwater and owing far more than their homes current market value.  Often, their only options - not selling at a price a buyer would likely pay, completing a "Short Sale," where the bank approves a sale for less than the outstanding mortgage balance, or simply walking away, and letting the home fall into foreclosure.

Further, according to the survey, many Real Estate Professionals feel housing may continue its price slide through 2011.  However, 17% of agents surveyed felt home values in their home neighborhoods might actually increase a bit in the short term.

Most in the know agree that the expiration of the Federal Home buyer Tax Credit, exactly one year ago this Saturday, had a chilling effect for many home buyers.    Without the incentive to "buy now," it appears as if many home buyers are sitting on the sidelines.   Some see buying a house now as a declining-value risk, while others see the possibility of facing home price distress down the road if the Real Estate Market here does not turn around.

In all, the results are very confounding, at a time when Mortgage Interest Rates remain historically low, and qualified home buyers can pick up a house in a desirable Chicago Neighborhood or Suburb for a fraction of Housing Boom prices.

See our post today via BlogChicagoHomes.com.

DEAN & DEAN'S TEAM CHICAGO

Despite what appears to be a spotty recovery in the Chicago Real Estate Market, rates for the money to buy real estate here is still near historic lows.  With last weeks natural disasters in Japan, and turmoil in Libya, average interest rates seem to be falling once again.

Last week, statistics compiled by U.S. Mortgage Investor and Guarantor, Freddie Mac, as reported in the March 17th Los Angeles Times, showed average 30-year rates nationwide falling to 4.76%, from 4.88% the previous week.  Those with excellent credit credentials and strong down payments - in excess of 20% down - are seeing even better rates.  In some cases, these new low rates are approaching just slightly higher than 4.5%.

Average 15-Year Fixed Rate Loans, according to Freddie Mac, are even lower - 3.97%.  Points and fees average 0.7% of the loan balance. 

Some home borrowers are considering adjustable rate loans once again - those made popular during the housing boom a few years ago.  Last week, a Five-Year Adjustable-Rate Mortgage (ARM) started out at 3.57%, after which the rate adjusts annually.  Some consider this a risk they would not want to take, however - especially given the relative security of low-interest fixed-rate loans.

Typically, Mortgage Interest Rates tend to get their lead from rates on 10-Year U.S. Treasury Bills.  Before the earthquake and tsunami in Japan just over a week ago, average 10-year T-Bill rates were roughly 3.4%.  Last Wednesday, March 16th, the rates were just over 3.2%.

These new low rates may be short lived, however.  T-Bills ticked up a bit on St. Patrick's Day, March 17th, as a new report indicated U.S. Inflation is heating up a bit, fueled, in part, by higher gas prices.  Middle East unrest is a partial culprit here.

Please see our post today via BlogChicagoHomes.com.

DEAN & DEAN'S TEAM CHICAGO

Here in Chicago, in many neighborhoods and Suburban Chicago Communities, buyers are king!  Especially those with lotsa cash, or stellar credit.

And what are these buyers looking for, gang!

BARGAINS, of course!   They want to save a lot of money.  In our clients' recent jargon, "I wanna steal da joint!"  (Remember, this is Chicago after all - many still talk this way!)

So, many call our Chicago Real Estate Team, asking for a list of Short Sale Properties - those properties where the owners are selling for less than they owe on their mortgage.  Problem here, most of the time, the bank takes their sweet time to consider and approve these sales.  And, more often than not, they are disapproved!

Some bargain hunters head to the Cook County Chancery Court, and try to pick up a bargain at the Sheriff's Sale.  Often times, potential buyers bid too little, and the bank representative outbids them to revert the property to the lending bank.

A higher percentage of success?

Properties that have already reverted to bank ownership - completed foreclosures, known in the business as REO's, for Real Estate Owned by banks - might offer a greater chance of closure, however.

As reported by Patricia Mertz Esswein of Kipplinger News, as syndicated in the Chicago Tribune, lenders are quite anxious to unload REO Properties they acquire, and price them very low to attract a quick buyer.  Often, however, many bank-owned REO Properties sell in multiple offers, at higher than asking price.

Further, some bank-owned properties are in above-average condition - we at Dean's Team Chicago just sold a two-bedroom ranch home in the Norwood Park Neighborhood on the Northwest Side of Chicago in which the bank remodeled the kitchen and baths, upgraded the plumbing and electrical systems, and freshly painted the home to generate peak interest.  Our buyer purchased at a sizable discount, and was able to close quickly.

In contrast, many of the short sale properties our Chicago Real Estate Team has put under contract recently have taken up to one year to close, with considerable back-and-forth negotiation with the bank.  Often, the seller pays a higher price than originally offered, and the closing date is unpredictable.  In several cases, the short-sale lenders have ultimately rejected good offers, at a fair price, after a protracted negotiation.  Buyers get frustrated and walk away, and the distressed seller often ends up in foreclosure.

A national compiler of Foreclosure and Pre-Foreclosure Data, RealtyTrac.com, estimates that lenders presently hold over 950,000 REO Properties, but that less than a third are presently on the market.   Lenders continue to hold back some REO supply, rather than dump hundreds of foreclosures on local real estate markets already struggling to rebound.

On the flip side, for bargain-seeking investors, the REO backlog suggests an ample supply of low-priced real estate will continue to flow to market for months to come.

Please see our post today via BlogChicagoHomes.com.

DEAN & DEAN'S TEAM CHICAGO

THE CHICAGO REAL ESTATE MARKET, AND OTHER THINGS CHICAGO, FROM THE POINT OF VIEW OF A LITTLE WHITE DOG!

Hey, you dogs!  Happy New Year, 2011.  Another year, and I'm still a Lil' White Dog!  Can you believe it?

You know, as my Lil' Sister, Gracie Ella Moss, and I walk each morning through the South Edgebrook Neighborhood of Chicago, where we live. we're a little peeved at those who let their dogs walk off-leash.

That's against the law here in Chicago!  I know it.  You know it.  And the errant human dog owner knows it!

But, sadly, some persist!

The other day, some careless human's 65-pound Pit Bull Terrier nearly ate Gracie for breakfast!  Thankfully, her always-shrill bark kept that wolf at bay!  (As for me, I just ran behind the safety of my Human Daddy Dean's leg!)

As reported today in the Chicago Tribune by Reporter Jon Weigel, humans have to remember, no matter how cute and well-behaved we might be . . . we're still DOGS!  It just might be too tough to resist that squirrel running out in the street - and I, for one, do NOT want to be hit by a passing car!

What about those overly-friendly big, big dogs who put their paws over any human's shoulders when saying hello?  Or those unleashed dogs that, quite simply, aren't very sociable with us quiet, well-behaved dogs.  Indeed, a possible disaster in the making!

Those long, retractable leashes can be a tripping hazard, and some people just don't like being jumped on by canines they are not familiar with.

And don't forget the possible legal liability issues if one of us dogs accidental bites someone!   That could be lotsa trouble for the human owner who let their dog run free and unleashed.

Pet Behavior Expert Steve Dalerecommends taking your dog to a dog park - like Wiggly Field in the Lakeview Neighborhood of Chicago - to roam free.  Here, there is a better opportunity for control, and less neighborhood-wide roaming.

And, speaking for the dogs here in the South Edgebrook Neighborhood, on Mason and Marmora Avenues, we kind of like being attached to a leash.  They actually make us feel most connected to the humans we love.

So please, you dogs!  Get your humans to latch you up.  OK!

Be safe!

Please read my post today via BlogChicagoHomes.com.

YOUR ACE REPORTER ON FOUR PAWS,

BUDDY HOLLY MOSS & DEAN'S TEAM CHICAGO

For Home Buyers and Real Estate Practitioners alike, 2010 offered the opportunity to buy real estate, in Chicago and elsewhere, at prices not seen in ten years or more.  Mortgage Interest Rates, in some cases, down near 4%.

Here in Chicago, and in most Chicago Suburbs, home prices have declined by as much as 50% in some neighborhoods over the past three years.  Incredible values can be found, for those with good credit credentials, income, and solid down payment.

But many potential homebuyers are still very concerned about their chances for keeping their job, as unemployment here in IL has topped 10.5%.  They read the press, see predictions of home prices continuing to tumble, and wait on the sidelines.

Now, new Federal Regulations being finalized in Washington may make mortgage loan requirements even more stringent.  As reported by Chicago Tribune Reporter Mary Ellen Podmolik, yet-to-be-finalized provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, proposed requirements in the act will require mortgage lenders to hold at least five percent of the loans they originate, rather than selling the loans off entirely.

The objective here is to discourage risky investment practices.  But, as a practical matter, many experts fear new rules might quash mortgage lending to all but those with strong, solid down payments.  Some banks would call these high-down-payment loans "Qualified Residential Mortgages, or QRM's". 

If banks make loans not qualifying under the definition of QRM, they will likely impose higher fees and stricter underwriting guidelines.  And many first time homebuyers - those driving the Real Estate Market the last couple of years - may lack the funds to qualify.

Smaller community banks, who rely on local loans to many first time buyers may be most vulnerable to lost business - more vulnerable than larger banks with deeper pockets. 

If such smaller banks fail, less competition for mortgage loans could result in less of an ability by consumers to shop around, along with the possibility of higher fees for everyone.

Couple these stricter guidelines for conventional loans with proposed increases in fees for FHA Loans, and those backed by Giant U.S. Mortgage Investors and Guarantors Fannie Mae and Freddie Mac, and new guidelines might just dampen a 2011 Housing Recovery, just at a time many are hoping such a recovery can continue.

Please see our post today via BlogChicagoHomes.com.

DEAN MOSS & DEAN'S TEAM CHICAGO