• ‘Hidden Time Bomb’ Could Leave Thousands of Homeowners with Hefty Tax Bill

    We mentioned on Wednesday that one benefit of filing Chapter 7 bankruptcy is the elimination of tax liability on a mortgage deficiency. However, the Los Angeles Times reported on September 7, 2012, that many struggling homeowners could be facing a very unwelcome bill next year. When Congress passed the Mortgage Debt Forgiveness Act in 2007, the legislation forgave debt for declines in homeowner’s financial conditions or drops in home values. However, the Times noted that the exemption-as much as $2 million per household in principal reduction and other aid from banks-is currently set to expire at year’s end. As a result, the homeowners who obtained reductions in in their mortgage debt could receive a bill for taxes on that aid.

    “The expiration of that provision is a hidden time bomb,” Representative Jim McDermott told the Times.

    As the Times noted, mortgage debt forgiven by a bank as part of a principal reduction, short sale or foreclosure needs to be reported as income by the homeowner and is subject to taxes. Furthermore, nearly 140,000 homeowners who received some type of relief under the $25 billion foreclosure settlement reached last year with the nation’s five largest banks could also find themselves owing taxes. According to the Times, a middle-class household would owe 25 percent taxes on that relief. With the relief averaging about $76,615 for each household, the Times said the taxes would be around $19,000 for the average settlement relief so far. Additionally, the Times said the tax “would go up if the relief pushes the homeowner into a higher tax bracket or if the Bush tax cuts expire, as they are set to do at year’s end.”

    If you are among the thousands of Illinois homeowners who are in desperate need of foreclosure help , it is in your best interest to take action immediately. Our Chicago bankruptcy lawyers can help you determine whether Chapter 7 or Chapter 13 bankruptcy provides you and your family the most relief, and we can get started as soon as you complete the form located on this page or contact our firm at (866) 930-7482.

    Benjamin Brand Services – Chicago bankruptcy attorneys

  • Chicago Home Prices Rise For Month

    Chicago led the way of eight cities posting month-to-month gains in a June report from the Case-Schiller Home Price index. While Zacks.com reported on August 30, 2011, that Chicago rose 1.32 percent for the month-to-month, it was also one of five hardest-hit metropolitan areas in year-over-year declines with those numbers down 7.49 percent.

    The Chicago Tribune reported on August 30, 2011, that a majority of the monthly improvement in the Chicago area came from the 6.5 percent price increase between May and June in homes that sold for less than $162,138. Homes sold for more than $275,128 rose 2.9 percent, while houses sold for between $162,138 and $275,128 appreciated 1.8 percent.

    The Tribune also noted that the condominium market in the Chicago area saw improved sales prices for the fourth straight month, with values increasing 4.3 percent from May to June. Zacks.com added that while the Case-Schiller data is the “gold standard for housing pricing information,” it is better to look at the seasonally adjusted numbers for three-month moving average. The most recent report, for example, includes data from April and March.

    If you are still facing foreclosure in your own housing situation and have been considering a short sale or bankruptcy as options, contact our Chicago bankruptcy information law firm today for a free initial consultation.

    Benjamin Brand Services – Chicago bankruptcy attorneys

  • Founder of Failed New Century Bank Faces Foreclosure on Personal Condo

    Faye T. Pantazelos, founder of New Century Bank, has failed to make payments on her condominium loan since December 2010. There is no mention of her seeking foreclosure help or a short sale. Her bank failed last year as a result of heavy investment in the failing real estate market.

    U.S. Bank filed a complaint in Cook County Circuit Court on May 17, 2011 stating that Pantazelos has failed to make payments on a $744,000 loan. According to the complaint, the principal balance of the loan is $712,199.66.

    Ms. Pantazelos purchased the condominium located in the Gold Coast for $930,000 in August 2007. Before founding New Century Bank in 1999, she worked at First Chicago NBD Corp. and Bank of Ravenswood. New Century Bank primarily issued loans for commercial real estate projects. Regulators closed the bank in April 2010 and sold it to MB Financial Bank after the real estate crash affected many of New Century’s developer clients. The bank’s assets totaled $486 million at the end of 2009.

    New Century lent to the construction and development market even when it became apparent that it was going to fail.

    Michael Iannaccone, president at MDI Investments Inc. said, “It was like a game of musical chairs; people knew the music was going to stop. We went from one chair being removed at a time to two, three, four chairs being removed, but they kept on lending. You knew that someone was going to be left holding the bag.”

    If you are in a possible foreclosure situation, and would prefer to explore your options for short sale or other choices, contact a Chicago short sale attorney for more information.

  • Delinquent Homeowners Stay in their Homes up to 15 Months

    Illinois homeowners who are facing the foreclosure process have up to 494 days to stay in their homes before eviction. The time between filing and eviction has increased since the first quarter of 2007. At that time, the average foreclosure lasted all of 243 days and the housing crisis had only just begun.

    Individuals trying to keep their house benefit from the lag time, as well as those who do not want to keep the property. Those wanting to keep the property can utilize the time to attempt a refinance of their mortgage, and those who do not want the house can live rent-free while saving their money. Homeowners can also use the time to attempt a short sale .

    The large volume of foreclosure cases entered into the courts play a large role in slowing down the process. Courts are having a hard time keeping up with the amount of new cases filed on a daily basis. The “robosigning” controversy has added to the slowdown as lenders and loan servicers re-examine their documentation of bad loans.

    Illinois laws also add to the problem, as it requires lenders to work through the courts to foreclose on properties. One such time consuming requirement is a sheriff’s sale that requires setting an actual date with the county sheriff’s office.

    No end to the foreclosure issue is in sight, and the potential of “strategic defaults” by underwater homeowners is on the horizon, adding to the already overloaded court system.

    If you are looking for foreclosure help, contact a Chicago foreclosure attorney. He can review your situation and suggest a course of action.

  • Foreclosures Represent 29 Percent of Home Sales in the First Quarter

    Almost 30 percent of all homes sold in Illinois during the first quarter were foreclosures. This number is down considerably from the first quarter of 2010.

    The 5,529 homes were sold as foreclosures during the first three months of the year, ending in March. This number is down 38 percent from the previous year and down 6 percent from the last quarter of 2010. Illinois is still one of the states with the best deals for buyers.

    The average price of a foreclosed home for the first quarter is $132,983, a nearly 41 percent discount from the sales prices of non-foreclosed homes. Bank owned or repossessed properties sold for 48 percent off the sales price of non-distressed homes. Homes that are in default but not yet repossessed by lenders averaged 19 percent off the average non-foreclosure price. Short sales are not included in the data.

    The Federal Housing Finance Agency issued its quarterly house price index on May 25, 2011. The data shows how foreclosure sales are dragging down overall home values. According to FHFA, Chicago are home prices are down 5 percent as compared to the final quarter of 2010, 9.5 percent from the period one year ago, and 26 percent from five years ago.

    If you are in need of foreclosure help, contact a Chicago foreclosure lawyer for more information.

  • Illinois Attorney General Expands Probe of Foreclosure “Robosigners”

    The Illinois Attorney General’s office is expanding its probe of alleged “robosigning” of mortgage foreclosure documents. On May 25, 2011, the office announced subpoenas to two Florida-based mortgage servicing support providers that had not previously been under investigation.

    Subpoenas were issued against Lender Processing Services Inc. and Nationwide Title Clearing Inc. Both firms handle document preparation and management for lenders who are foreclosing on mortgages. Some of the documents requested by the subpoena are every affidavit used in an Illinois foreclosure or bankruptcy case since January 1, 2007. Also requested are the names of all employees who signed affidavits since then. The Attorney General is seeking lists of all current and former employees and information on the companies’ overall loan servicing processes including default servicing and loss mitigation.

    Both companies have until June 16 to respond to the subpoena.

    The probe is investigating foreclosures only. Short sales are not involved in the “robosigning” scandal.

    Illinois is one of many states that have been investigating questionable procedures used to foreclose on consumer’s homes by mortgage loan servicers. The Attorney General’s office had demanded information from 26 mortgage loan servicers in the state, but Madigan’s office stated that it was “turning our attention to third-party vendors that support the servicers in order to drill down to a greater degree in the servicing process.”

    If you are seeking foreclosure help, contact a Chicago foreclosure lawyer. You can learn about the options that are available for your situation through a foreclosure attorney.