FINANCING: What's old is new again in buying...

Here's what to expect in summer 2008: •Certain loans will require a second look in Cook County.

No one would take a loan they soon would not be able to afford unless they didn't know what they were getting into, according to Illinois lawmakers, who've backed a law that will require first-time buyers and all refinancers in Cook County to get counseling before signing up for a loan with certain features. Starting July 1, every mortgage closed and recorded in Cook County must carry a "certificate of exemption" or a "certificate of compliance." The exemption signifies that the mortgage carries no features that require counseling: three-year adjustables and the like. Certificates of exemption are also attached to mortgages made by banks or credit unions not regulated by Illinois. Certificates of compliance indicate that the borrower was counseled on his loan and wants to take it. It's up to the firm conducting the closing—usually a title company—to ensure that the appropriate certificate is attached to the mortgage when it's recorded.
The term, "lease-to-purchase option," is making a modest comeback after nearly disappearing. Sellers running out of patience—and money—waiting for a buyer are inclined to consider it, says Margie Thorgesen, president of the Aurora Tri-County Association of Realtors. These options can be structured differently, with the exact terms worked out between the parties. But basically, someone can rent for a term and then have the opportunity to purchase the home at a set price. Some lease-option agreements allow part of the rent to be used as a down payment.

Buyers stall, lenders pull back and sellers can't plan. In cooperation with the Illinois Association of Realtors, the Regional Economics Applications Laboratory at the University of Illinois recently began using regional economic data to forecast the market about a month out, says REAL director Geoffrey Hewings. After slight price increases in May and June, prices will decline slightly in July—about 2 percent—in the Chicago area, says Hewings. That would put the median price in July at $254,397, down from $256,346 in June. The June issue of Money magazine ventures further, predicting a 6.8 price decline in Chicago from through May 2009, and a 0.8 percent decline in Lake County home prices in the period.more...

Foreclosures Rise 48% in May As U.S. Housing Woes Deepen..

The number of U.S. homeowners swept up in the housing crisis rose further last month, with foreclosure filings up nearly 50% from a year earlier, a foreclosure listing company said Friday.
Across the U.S., 261,255 homes received at least one foreclosure-related filing in May, up 48% from 176,137 a year earlier and up 7% from April, RealtyTrac Inc. said.

The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't get refinanced into an affordable loan.
Mortgage rates have been rising, reflecting increased concerns about what the Federal Reserve might do to battle inflation. Freddie Mac reported Thursday that 30-year fixed-rate mortgages averaged 6.32% this week, the highest level in nearly eight months and up sharply from 6.09% last week.
As foreclosed properties pile up, they are adding to the inventory of homes on the market and dragging down home prices. The trend is most dramatic in parts of California, Florida, Nevada and Arizona, where prices skyrocketed during the housing boom and are now falling precipitously.
Lehman Brothers economist Michelle Meyer said in a report Thursday that U.S. home sales are likely to hit bottom at the end of this summer, but said a recovery in sales is likely to be "feeble." Home prices, she wrote, are still expected to fall another 10% by the end of 2009. more...