Chicago Short Sale

Hi, Brian here. I am making this video today. I was able to get Mike Cuevas who is one of the top experts in Chicago, Illinois, on short sales and distressed properties. The goal of this website is to keep you updated on the recent news and make sure that you, as the homeowner, really know what all of your options are and are going down the right path. Mike has agreed, I caught him on Sunday, and he has agreed to do a video series with us to get the most commonly asked questions answered and the most frequent questions answered that people should be asking.

Brian: Tell us, Mike, what percentage now of sales in the Chicago-land area are short sales.

Mike: At the time of this recording there are 40 percent of homes in Cook County that are facing foreclosure. That is an astounding fact. ____ If you do this on a nationwide problem, 19.7% of mortgages and homeowners are underwater on their homes in the United States; that is nationwide. Twenty-eight percent of the borrowers who are underwater on the homes nationwide are more than 50% under water. So, in context, if you owe $200,000 on your mortgage and you rank in that 28th percentile, your house is only worth $100,000. Unfortunately, these stats are growing, growing, and growing. People are looking for solutions, and the truth is, in this market, we have this amount of foreclosure and this amount of inventory, we cannot move forward until we clean out all this bad debt. This has been one of the first times the government, media, and the first year in 2010 that they finally have encouraged short sales and publicized them. They are letting people actually get to see their options and give them actually correct information on it. So, technically speaking, there are nine alternatives to foreclosure. Realistically, only two of those are going to work, and it is going to be do a loan modification, or you are going to do a short sale. Short sale is most appropriate when the borrower wants to rid themselves of the property.

Let me first define what a short sale is so that your audience is able to see this. A short sale is where the lender agrees to take less than what is owed. They do not feel sorry for you, but the only thing that the lenders are doing is that it makes more sense for a lender to accept a short sale than to take it all the way to foreclosure. Again, this came directly from the Wells Fargo, the Bank of America CEOs. Banks will net 10 to 20% more on a short sale than the will on a foreclosure and this is simply just a way to mitigate or less then the blow to the banks’ total loss.