"You've Caught the NET!"

Enjoy your Sunday, AR!

Is the Chicago Real Estate picture beginning to brighten?  Perhaps . . . but, not so fast!

For the one-year period between May, 2007 and last month, home sales in the Chicago Metro Area and a few surrounding counties - Cook, Lake, DuPage, Will, McHenry, Grundy, Kendall, DeKalb, and Kane - are off nearly 30%.  However, the median home and condo price in the Chicago Region is about the same - shedding only 0.5% in the last year, to $251,000.

However, between April and May, 2008, sales actually INCREASED 17.3%!

Illinois sales, outside of the Chicago Metro Area, were up 17.3% in May, compared to April, 2008.  11,173 houses were sold across Illinois in May, versus 9,523 in April.  Year-to-year, however, sales dropped 22.9% statewide between May, 2007 and May of this year.  The median sales price of a home or condo across Illinois fell 7.3 percent year-to-year, to $190,000.

National Association of Realtors Chief Economist, Lawrence Yun, feels the underlying fundamentals indicate some pent-up demand nationwide.  "Home sales are at about the same level as they were 10 years ago, yet the population has grown by 25 million people and we have over 10 million more jobs,"  he said.

"The housing market has been under performing by historical standards, partly because buyers were hampered by mortgage availability issues, but that's improved and an upturn is likely."

In the opinion of Kay Wirth, President of the Illinois Association of Realtors,  "The Illinois housing market showed some positive signs of stabilizing in May, with a sizable jump in sales from the previous month and the fourth consecutive month-to-month increase."

Many economists surveyed feel the soft economy will stall a housing sector rebound in the near future.  Others, however, are somewhat more optimistic.

"I think we are close to a bottom," says Lehman Brothers Holdings Economist Michelle Meyer. "Sales will probably fall another 5 percent or 10 percent before bottoming by the end of the summer. It will be a feeble recovery, we will kind of bounce along the bottom."

Here in the North and Northwest Sides of Chicago Neighborhoods we serve frequently, inventory of homes for sale exceeds 27 months.  This high level of supply is more than four times the generally-accepted stable-market level of 6 months supply.  Inventory levels closer to Downtown Chicago and The Loop are far lower - just over 14 months in The Loop and Near North Neighborhoods of Chicago.  (Data drawn from Chicago MLS Statistics).

Looking at the data around Chicago indicates that some home buyers are beginning to buy new homes, condos, and investment property.  However, market balance in our area may still be months away.

See our post from yesterday evening @ BlogChicagoHomes.com, with links to detailed coverage in Friday's Chicago Tribune, for more info.

DEAN & DEAN'S TEAM CHICAGO

You knew this one was coming!

In-Flight Web Surfing will soon become a reality, as American Airlines this week tested the service on board one New York-Los Angeles flight.

The service, developed with American's Technology Partner, Aircell LLC, places three wireless access points around the airplane, to assure even coverage for every passenger.  Last week's test was a pre-cursor to a broader web offering to passengers flying between New York and Los Angeles, San Francisco, and Miami, very soon.

Connecting in-flight will cost between $9.95 and $12.95, depending on the length of the flight.  Web sites will not be filtered - it will up to the airline's flight attendants to make sure inappropriate material is not being downloaded by passengers.

However, the service will allow fast internet connectivity to personal and corporate email, instant messaging (is that still being used anymore?), the web, and your company's intranet. 

Two other airlines - JetBlue and Virgin America - are working with Aircell to offer the internet service as well.  Successful testing, I would assume, will lead to a broader roll out to new city pairs, and on other airlines.

For the moment, no service is immediately planned for flights leaving from or arriving in Chicago.  But, expansion here is most likely just a matter of time!

Imagine - you Real Estate Professionals - connecting to Top Producer Online, while traveling at 30,000 feet, at 600 MPH.  Something you always dreamed of, yes?  Well, maybe!  On the other hand . . .

See our post today via BlogChicagoHomes.com for more information, as well as a link to David Koenig's story in the Chicago Tribune from last Tuesday.

DEAN & DEAN'S TEAM CHICAGO

Hope you're enjoying the weekend, folks!

As you know, this week marked a change in behavior for the Federal Reserve Board.  On Wednesday, after their two-day Federal Open Market Committee meeting, they announced their benchmark Fed Funds Rate will remain unchanged, at its current 2.0% level. 

This was the first non-action in rates since last September.  At that point, to stimulate the housing sector, and make business loans more affordable, they began to reduce the benchmark rate, and have done so for subsequent Committee meetings until this month.

Their action - or, this time - inaction, points up the lack of immediate relationship between the Fed Short-Term Rates and mortgage interest rates.  Many of the adjustable mortgage loan rates are tied to the London Interbank Offering Rate (LIBOR), rather than the Fed.  Fixed rates actually dropped a bit over the last week, after increasing considerably since late May.

Some rates are directly tied to the Fed Funds Rate - credit card interest rates, some auto loans, and many Home Equity Lines of Credit.  These rates will most likely remain steady in the short term, based on the Fed action.

This end to rate cutting was widely expected by Fed observers.  It seems the threat of fast-climbing consumer prices, brought on by skyrocketing fuel and food prices, has become of greater concern to Fed policy makers than the continued economic slowdown across the U.S.

Fed Chairman Ben Bernanke sees the economy as being in a sensitive and difficult stage.  He and most other committee members are not inclined to raise rates this summer unless there are clear signs that Americans' expectations for future inflation are heightened.  This could create of a vicious cycle of consumer price hikes.

Actually, one FOMC Member, Richard W. Fisher, President of the Dallas Federal Reserve Board, preferred to raise rates, rather than leaving them unchanged. His dissenting vote was promptly overruled by the rest of the Committee.

The Fed expects inflation to moderate in the second half of this year and into 2009, but they are betting the rate of inflation will not be too high.   However, they are concerned that "tight credit conditions, the ongoing housing contraction, and the rise in energy prices are likely to weigh on economic growth over the next few quarters."

See our post @ BlogChicagoHomes.com from last Thursday, June 26th, for more info, and a link to the full story in the Chicago Tribune from last Wednesday.

DEAN & DEAN'S TEAM CHICAGO

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

Hello, you AR Dogs!  How are things going where you are?

I'm headed out of town this weekend - off to Minnesota, via Iowa, to check in on all my four-pawed and two-pawed friends - I'll be there to lend a paw as they recover from the devastating floods of the last week or so.

I'll keep in touch from the road, though - expect another usually-insightful Lil' Buddy's Blog next Friday morning.  Same time, same url!

Italian Beef.  Chicago-Style Red Hots.  Deep Dish Pizza.  Eli's Cheesecake.  (grrrr . . . tasty!)  That's the kind of chow you think of when you think of Chicago - yes?

But . . . DONUTS (note the correct Chicago spelling, you dogs!)  Naaah!

Yeah, there are still a few independent shops around here, selling fresh-baked donuts - Wheeling Donuts in the Northern Suburbs of Chicago, Dat Donuts and Old Fashioned Donuts on Chicago's South Side.

But those glorious donut palaces of old around here - Amy Joy Donuts in Niles IL, Yum Yum Donuts plastered right next to Wrigley Field, even the classic grease joints at the Wilson and Sheridan Avenue L stations - all history!

We dogs can still find Dunkin Donuts all over the Chicago area.  But these donuts are all made, by machine, and without much character. What about Krispy Kreme, the southern donut king, offering free samples right off the line?  Many of their shops have closed around the city - as business has declined. 

Most of the old independents have closed due to escalating baking costs, and shrinking profit margins.  Ken Jarosch, President of the Chicago Area Retail Bakers Association, says many of the old-line donut houses haven't been able to keep up. 

Burritt Bulloch, the owner of Old Fashioned Donuts, on the Southwest Side of Chicago by Midway Airport, mentions it costs about $42 for the same shortening he paid less than $18 a year ago.  He also is livid about the "fuel surcharge" that is added to every ingredients delivery he receives.

"We make 85 percent of our doughnuts by hand," says the 70-year-old Bulloch, who has been making doughnuts since 1963 and opened his shop in 1972. "It's a lot of work."  His best seller?  "Around here, the most popular is glazed," he says.

You're probably wondering - what's Buddy's favorite variety?

Stuff the jelly filled!  Bag the long johns!  Chocolate - makes me break out!  Glazed - too much sugar for my sensitive pallet!

Just find me a donut that takes like BACON - and nobody gets bitten!

Check out my post today @ BlogChicagoHomes.com.  I've linked to Leah Zeldes blog post in Wednesday's Chicago Sun-Times.

YOUR ACE REPORTER ON FOUR PAWS,

BUDDY HOLLY MOSS & DEAN'S TEAM CHICAGO

The drumbeat of trouble goes on for Countrywide Home Loans - the lender alleged to be at the center of many high-leverage, poorly-scrutinized, now-defaulting home mortgages. 

Wednesday, June 25th, Lisa Madigan, the Attorney General of Illinois, filed suit against the company.  The Attorney General of California filed their state's own suit later the same day. 

The suit also names Full Spectrum Lending, Countrywide's sub-prime lending division, as well as the firm's servicing unit, and their co-founder Angelo Mozilo. 

While Attorney General Madigan acknowledged that a number of sub-prime lenders were making similarly risky loans to those unlikely to comply with repayment terms, she called Countrywide "the largest and worst player in the market."

"Countrywide's unfair lending practices have harmed tens of thousands of borrowers, who have been placed in unaffordable loans.  As a result, our communities are being destabilized by a skyrocketing number of home foreclosures," continued the IL Attorney General.  Madigan delineated that Countrywide relaxed traditional underwriting guidelines to fund their loans, and made their loans to borrowers with in sufficient earnings and personal assets.  In some cases, she continued, borrower's income was overstated on loan applications to assure they would qualify.

In Illinois last month, 9,670 homeowners were at some stage of the foreclosure process - an increase of 42% from May, 2007.  Madigan estimates the delinquency rates on loans issued by Countrywide or their affiliates between 2005 and the First Half of 2007 were even higher in Illinois than they were in other states across the U.S.

The IL suit against Countrywide seeks to rescind or reform those Countrywide loans which originated using deceptive practices.  It also asks for a 90-day stay on Countrywide foreclosures, and restitution to Countrywide borrowers who have lost their home to foreclosure.

The problems impacting Countrywide could point up an even broader issue - were lenders simply feeding on political pressure to increase the percentage of those owning homes across the country?   Bert Ely, a Virginia-based Financial Consultant, feels that President Bush and his administration set an well-publicized goal to boost home ownership to record levels.

Indeed, they succeeded!

The rate of home ownership approached 70% in 2004.  Due to foreclosures recorded within the last year, however, many of these new homeowners eventually lost the homes they purchased using risky loans, or those with rate resets or high interest rates and fees.  

In the First Quarter of 2008, the national rate of home ownership has fallen back to where it was in 2002 - prior to the expansion of aggressive lending policies to increase home ownership.

Read our post from last night via our Dean's Team Chicago Blog Center - BlogChicagoHomes.com - for more info, as well as links and video in yesterday's Chicago Tribune story from contributing writers Susan Chandler and Becky Yerak.

DEAN & DEAN'S TEAM CHICAGO

Hey, folks - want your opinion on something, and would like to see if you use it.

Here in Chicago, I have found that negotiating a contract for sale, on behalf of my Listing Clients, with a few days to perhaps a month of post-close possession in their old house or condo often works wonders!

Sellers hesitant to list until they find new place see post-close possession as a way to ensure they will not have to move twice. 

Those who need the funds from their sale in order to unfreeze their equity to buy a new home (most sellers these days - yes?) no longer have to be forced to close on the SALE in the morning, pray it FUNDS IN TIME, and then running to the closing to their purchase, often in a different location - with all of their belongings in the back of a moving truck in the Title Company parking lot.

Using post-close possession, sellers can now return to their house, sale proceeds in hand, clean up, and move out on a more leisurely, sane basis.  Even if the closing for the sale and the closing for the purchase are scheduled on the same day - the furniture remains in the old house, not in the truck outside.  Much Stress Alleviated!

Here in Illinois, it is customary for the seller to have a "Possession Escrow" of between one and two percent of the purchase price of the home placed in escrow, held usually by the listing office, to ensure they will vacate the property in a timely manner, according to the post-close possession agreement. 

The seller would pay a per-diem equal to 1/30 of the buyer's actual mortgage amount, plus taxes, homeowner assessments, and insurance, for each day in post-close possession.  The total rent-back amount is usually written in the form of a personal check at closing - many lenders refuse to allow it shown on the HUD-1.

Until possession is actually tendered, the buyer pays for all utility payments on his old place.  He also retains homeowners insurance in case there is some casualty during the possession period (of course, the buyer also has their own homeowners insurance - which company actually pays in the unfortunate event of a casualty is a matter of discussion between the insurers).

The buyer does not have the right to enter their new home until after the possession period.  They also retain the right of a final "pre-possession" walk through, in addition to the usual pre-closing walk through, to make sure the exiting homeowner has not caused any damage to the property during the post-possession period.

Any drawbacks?  Sure, they are possible!

The seller can refuse to vacate on time.  In this case, Illinois practice calls for 1/15 of the Possession Escrow held to be given to the buyer per late day - as a penalty.  This penalty could be sizable - perhaps $500 per day, or more.  Strong monetary incentive to leave on time!

Or, the seller can damage something in their old place.  Again, the possession escrow, as well as language in the post-possession agreement which buyer and seller sign together at the closing table, cover this possibility.

Further, there can be some mechanical breakdown in the home, or an insurable loss.  Again, the post-possession agreement covers this eventuality well.

Here in Chicago, there are more than a few agents, and a small number of Real Estate Attorneys, that become quite resistant to this little Post Possession tool, out of concern about these risks.  They hesitate to agree - without considerable discussion.

However, Dean's Team Chicago handles over a dozen post-close possession agreements each year, for going on 15 years now.  Never had a problem!

What's your local practice and experience on post-possession agreements?  Please share - the good, the bad, and any ugly!

DEAN & DEAN'S TEAM CHICAGO

Today's Wall Street Journal Page One story is ominous!

Home Prices Fall Nationwide.  Consumer Confidence Sinks.  And Most Potential Home Buyers Still Wait on the Sidelines!

Here in Chicago, the negative drumbeat isn't as loud.  According to the latest Standard & Poors Case-Shiller Home Price Index, just completed providing April statistics, the average home price in the Chicago IL Metro Market declined 9.3% for the year ending in April, 2008.  There was actually a slight (0.1%) improvement to the index here in April.

Across the country, according to statistics compiled by Standard & Poors, in their Case-Shiller Index of Home Prices, the prices of single-family homes in the 20 Top Metro Areas they survey slid 15.3% in April, versus April, 2008.  On average, across the U.S., home prices are about what they were four years ago - in 2004.

In a separate survey, the Office of Federal Housing Enterprise Oversight, which oversees Fannie Mae and Freddie Mac-backed conventional mortgage loans in a broader cross-section of the U.S., urban and rural, found their average home prices fell 4.6% year over year in April - their lowest measured level since 1991.

The benchmark for the Case-Shiller Index is January, 2000 - 100 points.  The April index for Chicago was 151.44, indicating an average home appreciation of over 51% in the past 8 1/2 years.  By comparison, the New York Case-Shiller Index for April was 193.93, for Los Angeles - 202.52.  Miami - 200.42.  The index was 93.79 in Metro Detroit, indicating home price depreciation in that market since 2000.  Unlike Chicago, these other metro areas experienced index declines in April.

The largest one-year price declines were in Las Vegas (26.8%) and Miami (26.7%). The California Metro Areas of Los Angeles, San Francisco, and San Diego, as well as Tampa FL, each experienced year-to-year drops exceeding 20%.

Boston, Portland OR, Dallas, Denver, and Seattle each showed stable or slightly improving index numbers in April, versus March, 2008 - like Chicago.

Here is a link to the latest Standard & Poors Case-Shiller Home Price Index.

Not unrelated to the continued sluggishness in the Real Estate and Credit Markets, Consumer Confidence has fallen to its lowest level in 16 years, according to the Conference Board, a New York business research.  In June, their Consumer Confidence Index dropped 7.3%, to 50.4, from the May, 2008 level of 58.1. 

The Conference Board benchmark is based on 1985 figures.  Consumer Confidence peaked last July, at 111.9.  Their research suggests that consumers' anticipation of the state of the economy six months from now dropped to its lowest level since the Board began their surveys back in 1967.

Potential home buyers continue to remain on the sidelines!  Only 2.2% of those surveyed by the Conference Board plan to buy a new home within the coming 6 months.  In addition, fewer consumers plan to purchase a new car, major kitchen appliances, or even take a family vacation, between now and the end of the year.

Concerned about economic growth, along with the threat of continued inflation, the Federal Reserve Board is expected to leave it's key Fed Funds Rate unchanged when it concludes its two-day policy meeting today.  Lowering rates might have some mid-term impact on interest rates for some mortgage and business loans, but dropping rates too far could spark higher inflation - already exasperated by ever-increasing prices for food and gasoline.  At this moment, the Fed Funds Rate stands at 2.00%.

Read more via BlogChicagoHomes.com, and click for rich links for content and video in today's Wall Street Journal, including coverage by reporters Kelly Evans and Anton Troianovski.

DEAN & DEAN'S TEAM CHICAGO 

Good Morning, Everyone!

The angst, the turmoil, the depression of those facing possible foreclosure has, supposedly, just gotten easier.  One option - "Just Walk Away!"

Started in California, and geared at homeowners who owe more than their home is worth, YouWalkAway.com provides a "do it yourself" kit to plan walking away from your over-leveraged home.  For a $995 Fee, the company will hook you up with a licensed attorney, knowledgeable in foreclosure laws in your state, plus provide written tips and unlimited staff help to help you simply pick up and leave your property.

Some state laws prevent your lender for harassing you for payment during this process, if you follow the program's advice.  Further, you can continue to stay in your soon-to-be-foreclosed home, payment free, until the foreclosure process is final.  This could take up to eight months - possibly more - depending on state law.

JustWalkAway.com also has affiliations with credit counselors, to potentially reduce the sting of a foreclosure on your credit report.  They also promise possible moving credits - up to $5,000 - through state agencies and possible income tax credits.

According to Jon Maddux, co-founder of YouWalkAway.com, "We don't give legal advice, we give legal information.  We help the homeowner use the law to their advantage and get back on their feet before they're out on the street."

Illinois Foreclosures can take up to six months, perhaps longer with legal representation.  After the foreclosure is recorded, the foreclosed homeowner has an additional 30 days to vacate their home, before forced eviction from the county sheriff. 

Here in Chicago, companies similar to YouWalkAway.com are not common.  Despite a sluggish market here, high inventories for sale, and reduced home equity levels,  skyrocketing price increases were not as dramatic here as they were in other areas of the country.  Fewer homeowners, on average, actually owe much more on their mortgage than their home's market value.

We offer more information, as well as a link to Chicago Tribune Real Estate Editor Mary Umberger's column last Sunday's newspaper, via BlogChicagoHomes.com, our Team Blog Center.

As a disclaimer, Dean's Team Chicago is not advocating this process - that's a decision between you, your family, and your legal counsel.  We're simply reporting its presence.

DEAN & DEAN'S TEAM CHICAGO

Good Morning, AR! 

Here's the latest Stat Summary on the Chicago Real Estate Market, based on data pulled yesterday evening, June 22, 2008 -

The mid-month Sales Pending and Transactions Closed statistics had a positive jump from last week, when both indicators showed declines.

Average Sales Price dropped slightly, as while total volume increased somewhat, reflecting the bounce back last week in Closed Sales.  Average Market Time is still too high!

Absorption Rate, or average inventory turnover, surprisingly increased another 1.5% this past week - unexpected, given the jump in Pending Sales and Closed Sales.  The theoretical level of home inventory in the City of Chicago areas we serve no stands at just nearly 29.2 months, on average.

Percentage of Sale Within Six Month (180 Days) held fairly stable once again this past week.

Communities and clients we serve reside, or plan to reside, in the Chicago Neighborhoods of The Chicago Loop, The Gold Coast, River North, Lincoln Park, Lakeview, Uptown, Edgewater, North Center, Lincoln Square, Albany Park, Ravenswood, Wicker Park, and Bucktown. 

Also, these Great Chicago Neighborhoods: Logan Square, Rogers Park , West Ridge, Portage Park, Jefferson Park, Norwood Park, Sauganash, Edgebrook, and Edison Park.   Plus All Chicago Suburbs. 

SINGLE FAMILY, CONDOS, AND SMALL MULTI-UNIT PROPERTIES - NORTH SIDE OF CHICAGO, NORTH OF ADDISON STREET, WEST OF ASHLAND AVENUE

                             ACTV LISTINGS        JUST SOLD         CLOSED        EXPIRED  

w/e June 23rd             5,266                  68                        74                     54

w/e June 16th             5,241                  44                        67                     45

% CHANGE                  +0.5%             +54.5%           +10.4%              +20.0%

CLOSED PROPERTIES DATA

                              AVG SALE PRICE     AVG DAYS ON MKT     TOTAL VOLUME   

w/e June 23rd             $332,556               167 DAYS                $24,609,185

w/e June  16th             $347,625              169 DAYS                $23,290,902

% CHANGE                      -4.3%                  -1.2%                              +5.7%

THEORETICAL TIME TO CLEAR EXISTING INVENTORY (ABSORPTION RATE) -

w/e June 23rd - LAST 12 MOS - 19.08   LAST 6 MOS - 22.64     LAST 3 MOS - 29.16

w/e June 16th - LAST 12 MOS - 18.84     LAST 6 MOS - 23.22    LAST 3 MOS - 28.74

PERCENT OF HOMES SELLING IN 180 DAYS - 

w/e June 23rd - 22.75% (UNSOLD - 77.25%) 

w/e June 16th- 22.63% (UNSOLD - 77.37%)

SOURCE: MIDWEST REAL ESTATE DATA LLC, AREA MARKET SURVEY DATA

Please visit and review our Chicago IL Real Estate Stats Pack Archive via our Team Blog Center - BlogChicagoHomes.com. 

Call us anytime for current trends in any Chicago Neighborhood or Chicago Suburb! 

DEAN & DEAN'S TEAM CHICAGO

FHA Loans! 

Their proponents say their the answer to many prospective buyers with low down payment and blemished credit.  Until last year, many would have opted for higher-risk, high-leverage sub-prime loans, complete with potentially-dangerous rate resists, high interest rates, and low potential for building equity.

FHA loans are fixed, at competitive interest rates.  Closing costs can be covered by the seller if the buyer in low on funds, and the Mortgage Insurance Premium can be added to and financed with the loan. 

Others are concerned that the FHA requirements, meant to help insure the loan will not default, will keep away some potential buyers, and scare of potential sellers wary of subsequent FHA repair mandates.

Within the past year, FHA loan applications for new homes have doubled.  FHA also guarantees loans for sub-prime re-finance loans, and provides rescue for those with old adjustable-rate loans now resetting to higher rates, and the resulting higher monthly payments.

One facet of FHA loans, however, is a loophole which currently allows down payment contributions by the SELLER, on behalf of the prospective buyer, through a third-party "charitable" intermediary.  As a practical matter, sellers would make a "contribution" to the third-party company, in the name of the buyer.  The intermediary would then disperse these funds, less a "transaction fee" of roughly $400-$600, to the buyer at closing for their down payment.

Today, the two most well known Buyer's Intermediaries for FHA Loans are Nehemiah Corporation of America, and AmeriDream, Inc.    Using either company, buyers can purchase a new home with virtually no payment out-of-pocket.

There is a problem here, however!

The U.S. Department of Housing and Urban Development (HUD) contends buyers using these intermediary-held funds are showing foreclosure rates two or three times higher than those where buyers or their families came up with the required 3% down. 

A 2005 survey by the Government Accountability Office indicated that including a down payment credit from the seller may actually INCREASE the home sales price.  Sellers want to be reimbursed for the money they provided, and they raised their contract price by an amount equal to their contribution to Nehemian or AmeriDream.

Homes selling for over their true market value contribute to larger FHA losses when buyers default or slow pay their mortgage.

Down payment credits from the seller are usually prohibited in conventional loans, but they have become typical for those backed by FHA.   Over the last few years, the government agency estimates that as many as one-third of FHA loans have involved a seller down payment contribution.

Now, the FHA wants to end seller contributions to buyer's down payments.  They cite excessive loan default ratios, high numbers of foreclosures, and severe losses that threaten their solvency.  Within the past year, the IRS has cracked down supposed "charitable" organizations funneling seller down payment contributions, including AmeriDream and Nehemiah, revoking their status as not-for-profit entities.

FHA Commissioner Brian Montgomery announced earlier this month plans to prohibit seller down payment contributions by the end of the 2008.  Under his proposals, gifts by bona-fide local government agencies, charities, employers, and relatives would still be permitted.  But those by "charitable intermediaries" would be prohibited. 

Of course, the FHA proposals are bringing considerable resistance from those companies offering seller-provided down payment assistance to buyers.  Scott Syphax, President and CEO of Nehemiah, challenged the department's foreclosure and loss statistics, saying HUD's database is "corrupt." HUD declined comment on Syphax's charge.

To date, attempts to block down payment assistance companies have failed.  Last October, Federal Courts blocked implementation of rules to block down payment assistance companies, mainly for procedural and technical reasons.

If the FHA prevails, and the prohibition against down payment assistance companies becomes reality, this will impact low-income, low-down-payment purchasers' ability to buy their new home.  From the point of view of the FHA, however, the possible reduction on loan default and new foreclosure proceedings would outweigh this negative.

Read our post today @ BlogChicagoHomes.com for more information.  We've also provided a link to Kenneth R. Harney's article in today's Chicago Tribune.

DEAN & DEAN'S TEAM CHICAGO