Government help for those underwater on 2nd mortgage

So now homeowners that are having trouble paying their second mortgage can be eligible for possible modification.  I was a little unsure of this initially, thinking about all the people who are struggling with paying their first mortgage.  I was wondering, “Why are we worried about those with two?”  But it makes sense.  Homeowners who are trying to get modifications on their first mortgages that have two mortgages are the ones having the most trouble.  Many lenders won’t do modifications or take losses on the loans of their first mortgage unless the second lien-holder does, too.  And because second mortgages usually are for a much smaller loan amount, homeowners are able to keep up with those payments. And that’s where this plan coms into play. 

Here’s what the Obama administration is introducing.  It’s called 2MP.  Currently it’s only available to those whose second loan originated on or before January 1, 2009.  Anything originated after that is not currently eligible.  And the first mortgage needs to be modified under the Federal program.  If the lender or lien-holder on the second mortgage is also participating in that program, they have to offer to modify the second mortgage.  They’re required to defer the payment of the same proportion of the principal that was deferred on the first loan.

Right now the program is expected to help about 1.5 million homeowners.  So far Bank of America, Wells Fargo, Citigroup, and JP Morgan Chase participate.  Bank of America recently started sending letters to home equity customers introducing this possible modification.

My concern is that it’s still too difficult to work out.  I understand and appreciate what the government is trying to do.  The banks are taking their sweet time approving these modifications, making it extremely difficult for customers to get them done on their own.  With the amount of time it takes to connect to someone, fill out paperwork, and hear back, it’s almost like a part-time job.  I’ve had clients say they’ve had to submit paperwork multiple times to their lender and still haven’t heard back.  It’s worth it to lower payments if you have the time and perseverance to wait.  It also may be worth it to you to talk to a company that offers to assist with loan modifications on your behalf.

More information on this new program can be found here. And I can be found on my Web site.

Possible water bill increases for Evanston residents

Evanston, IL residents may be faced with a dilemma in the near future, and no matter what, it could equal an increase in water bills, sewer bills, and even property taxes.

Because residents have been great at conserving water over the past few years, the city is left without much of the revenue it normally generates from water bills.  Evanston had a City Council meeting this past week to discuss the options to generate more money for the city.  All of the options included a property tax hike and either an increase in water or sewer bills.  Based on the last fiscal year, water usage was down 19% from what was used back in 2005.  And the 2005 year is what they based the current budget on.

So what are the possible outcomes to this?  How would residents’ bills increase?  The first scenario would only increase property taxes by less than 1% each year over a three-year period.  This wouldn’t begin until January 1 of 2011 and it would also include a hike in the sewer bill of 6, 7, and 8%.  So you’d be paying an increase of about $160 over five years in your tax bill and around $300 in your sewer bill.

The second possibility is to leave the sewer rate as it is now, with no increase in the immediate future.  However, they’d bump the property taxes by less than 1% over four years instead of three.  If costs are added to property taxes, they can all be deducted.  In terms of water, the most expensive option would cost a homeowner would be around $192 in property taxes and $158 for water.

Evanston currently charges Skokie, IL and other cities like Buffalo Grove and Palatine in the Northwest Water Commission for water.  They’re looking to expand this service to be able to make more money off of other cities.   Thanks to the Evanston Review for this great information. 

You can always visit me on my Web site for any real estate related needs.  Have a great week!

Appealing to the younger generation

So who’s leading the pack now in purchasing their first home?  It’s Generation Y.  Born to baby boomers, this generation is about 75 million people born between 1982 and 1995.  A lot are graduating college and looking for their first place.  Many are getting married and buying their first home with their spouse.  Either way, they’re the next generation sellers are going to want to appeal to.

First of all, you need to know that so many of these people are using technology to find their home.  They’re not the ones who are going to take out the Sunday paper and search for Open Houses.  They’ll be on Facebook, MySpace, Twitter and dozens of other online sites doing their searches.  They can even use Zillow from their mobile phones or use their phones to take pictures of a building they might be interested in to send to their Realtor.  They grew up using technology and there’s no reason to change that now.  So if you are selling your home, make sure your agent shows you the Internet marketing he’s capable of.  Your home should appear on Web sites and social networking sites to appeal to these buyers.

And don’t just assume because they’re young they automatically look in the urban areas.  While that’s true for some, many want to have a close commute to work in the suburbs.  In the Chicago area, many suburbs have a “downtown” area modeled like the city itself.  Suburbs such as Palatine, Arlington Heights, Schaumburg, Highland Park, and Grayslake are a few examples. 

A lot of the Generation Yers go for low-maintenance living, like a condo or a townhome, where they don’t have to worry about shoveling snow or mowing the lawn.  However, some would like a single family home with a garage to park their cars and space to start a family.  They’re looking for newer materials in homes, nothing dated.  Forget the Formica counters – they want Corian and granite.  Helen Velas, a Naperville interior designer also adds, “They want the most bang for their buck because they can afford only a small space. They like flex floor plans. Maybe a home office can double as a dining room, exercise room or guest room. Gen Y is not into museum rooms that are never used, like living rooms.”

Of course, I’m not telling you that you should model your home to sell to someone in this generation.  These are just a few tips to keep in mind based on your location.  If you’re selling a condo in a downtown area and you have a formal living room, maybe you would want to stage it to act as a fitness room or office.  Think outside the box. 

More information on what this generation is looking for can be found here. I’m ready to help you buy or sell your home. Please visit me online.