NEW YORK — Just as the housing market began to collapse near the end of 2007, a real estate agent in Bridgeport, Conn., asked Regions Bank if it would accept a $102,375 bid on a home that was underwater on its mortgage. Under the impression that this was the best offer on the home, Regions agreed to the short sale and released the mortgage it owned on the home.

Later that same day, the new owner — an investment group owned by another real estate agent — resold the home to a buyer who had been lined up before the short sale transaction went through. The final sale price: $132,500, netting the seller a cool $30,000 — a profit that should have gone to Regions.

In this latest twist on short sale fraud, scammers have found a way to rip off mortgage lenders by tens of thousands of dollars — sometimes in a matter of hours.

The scam artists, usually real estate agents, will secure a legitimate bid on a home, one where the borrower owes far more on the mortgage than the home is worth. Then they arrange for an accomplice investor to make a lower offer on the home.

Foreclosures for Sale: Big Supply, Low Prices

The agent then presents the lower bid to the lender and asks them to forgive any remaining balance owed — without disclosing that there was a higher bid made on the home. Once the short sale is approved, the scammer then sells the home to the higher bidder, often on the same day.

“These same-day resales are on average nearly $50,000 greater than the lender agreed upon short-sale price,” said Tim Grace, senior vice president of product management and analytics at CoreLogic, a financial analytics company based in Santa Ana, Calif.

Such transactions are expected to cost lenders more than $375 million this year, up more than 20 percent from last year, according to CoreLogic.

CNNMoney has the full story.

The rate of homeownership in America is back down to levels not seen since 1998, according to Census data released Wednesday.

The homeownership rate in the first quarter of 2011 fell to 66.4 percent, down a tick from 66.5 percent in Q4 of 2010. It marks the lowest rate of homeownership since the last quarter of 1998.

After riding the crest of the housing boom through the mid-2000s, the rate of homeownership peaked in the first quarter of 2005, at 69.1 percent. With a few exceptions, prompted in part by federal stimulus programs such as the home buyer tax credit, the rate has since steadily declined.

Meanwhile, the U.S. home vacancy rate, which measures the proportion of empty homes for sale, dropped to 2.6 percent in Q1 of this year, down from 2.7 percent in Q4 2010. The rate remains statistically unchanged, however, from the year-ago period. Part of the reason for the holding pattern in home vacancy rates is the ongoing investigation of major lenders in connection with faulty foreclosure proceedings.

The rental vacancy rate increased to 9.7 percent, up from 9.4 percent from Q4 2010. This time last year, the rental vacancy rate was higher, at 10.6 percent.

As of the latest data, the total U.S. housing inventory was an estimated 131 million units with 112 million occupied properties.

Source: realestate.aol.com

February home sales in Illinois increased from last month while year-over-year comparisons still reflect an impact from the homebuyer tax credit incentive.

According to data from the Illinois Association of Realtors, statewide total home sales, including single family and condo sales, in February 2011 totaled 5,575 homes sold, an increase of 1.3 percent from 5,505 sales in January 2011 and down 10.0 percent from February 2010 sales of 6,194 homes.

The median price in February was $128,800, down 4.6 percent from $135,000 for the same month last year. The statewide single family median price reached $129,000, up 1.6 percent from $127,000 in February 2010 and up 2.8 percent from $125,500 in February 2009. The median is a typical market price where half the homes sold for more, half sold for less.

“We are seeing some improvements in the single family market in particular in terms of median prices trending higher and back to more sustainable pre-boom levels,” said Realtor Sheryl Grider Whitehurst, ABR, CRB, GRI, president of the Illinois Association of Realtors and the Development and Operations Coordinator for Traders Realty in Peoria. “Another positive sign is more than half of Illinois counties reported median price increases or no change in February although markets permeated by distressed properties continue to be affected. The predominance of sales in lower priced tiers of the market also is reflected in the median price.”

In the Chicagoland Primary Metropolitan Statistical Area (PMSA), total home sales (single family and condominiums) in February 2011 were down 8.8 percent, totaling 3,769 homes sold compared to February 2010 sales of 4,134 homes. Home sales were down 2.0 percent from the previous month’s totals of 3,844 in January 2011. The median price in February 2011 was $152,500 in the Chicago region, down 7.6 percent from $165,000 in February 2010.

The monthly average commitment rate for a 30-year, fixed-rate mortgage for the North Central region was 5.0 percent in February 2011, up from 4.8 percent during the previous month, according to the Federal Home Loan Mortgage Corporation. Last year in February, it averaged 5.01 percent.

“Sales are forecast to decline year-over-year for the next three months, but this is not an extremely negative signal for Illinois and the Chicago PMSA housing markets taking into consideration that the early 2010 housing market was inflated by the homebuyer tax credit by 16.5 percent” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “This impact is reflected in the fact that we are expecting to see significant month-to-month sales increases for the next three months for both Illinois and the Chicago PMSA. The housing price forecasts for both Illinois and the Chicago PMSA show month-to-month increases in March, April and May however the forecasted prices are still lower than last year during the same period.

“The economy continues to provide some positive signs,” he continued. “National job gains in the last 12 months have amounted to 1.3 million, or an average of 106,000 jobs per month. Illinois added 64,200 jobs in the last year or an average of 5,350 jobs per month. Most analysts agree that a strong labor market will be the key to a housing market recovery.”

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 9.6 percent to a seasonally adjusted annual rate of 4.88 million in February from an upwardly revised 5.40 million in January, and are 2.8 percent below the 5.02 million pace in February 2010.

Lawrence Yun NAR chief economist, expects an uneven recovery. “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers,” he says. “This tug and pull is causing a gradual but uneven recovery. Existing-home sales remain 26.4 percent above the cyclical low last July.”

However, things seem to be swinging up, slowly but surely. In the city of Chicago, February home sales (single family and condominiums) totaled 1,056, up 2.1 percent from the previous month 1,034 homes sold in January 2011 and down 13.8 percent from 1,225 homes sold in February 2010.

The city of Chicago median price in February 2011 was $177,500 up 0.6 percent compared to $176,500 a year ago in February 2010; the single family median price increased 21.9 percent in the month of February to $134,200 from $110,100 in February 2010.

“In the city of Chicago, both average price and median price have increased for single family detached over the same period in 2010. Buyers are finding significant value and gravitating toward the single family detached properties offering better financing options,” said Mabel Guzman, president of the Chicago Association of Realtors and a Realtor with Envision Real Estate LLC, Chicago. “Currently 90 percent of loans are government-sponsored enterprises, and with a 30 percent cap on condominium buildings qualified buyers are finding it more challenging to secure financing for their condo purchase. We are closely monitoring short sales in the city of Chicago, which are outpacing foreclosures, in order to track impact on communities throughout the city.”

More than half of Illinois counties reporting (49 of 97 counties) showed year-over-year median price increases or no change for the month of February including Adams, up 6.5 percent to $104,950; Champaign, up 8.4 percent to $126,000; Madison, up 15.7 percent to $109,950; McLean, up 2.0 percent to $153,000; Monroe, up 21.2 percent to $157,500; Sangamon, up 0.3 percent to $120,300; Tazewell, up 1.5 percent to $115,450; and Will, up 2.4 percent to $163,900.

Sales and price information is generated from a survey of Multiple Listing Service sales reported by 35 participating Illinois Realtor local boards and associations including Midwest Real Estate Data LLC for the period Feb. 1 through Feb. 28, 2011. The Chicagoland PMSA, as defined by the U.S. Census Bureau, includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

Read full article at chicagoagentmagazine.com

In the 1950s, the Rapala family baseball games pitted the “City Slickers” against the “Country Hicks,” recalled Arline Rapala, who moved from Chicago to Lake Villa after picnicking at its beaches.

“Now, they don’t call us hicks anymore,” said Rapala, of Lake Villa, population 8,700. “For the kids and the seniors, there are lots of things to do.”

Residents still enjoy the wide-open spaces that persuaded Rapala to put $5 down on a lot. But chain stores and restaurants skirt its perimeter.

“The good news is we’re close to everything,” said Frank Loffredo, the village’s mayor of 18 years. “The bad news is we’re close to everything. People want the stores nearby but not the traffic.”

Blink-and-you-miss-it downtown Lake Villa, defined by the “triangle” (Lake Avenue, Cedar Avenue and Illinois Highway 83), is sleepy compared with its Lake County neighbors. There’s a diner, where Rapala and her friends reminisce about “mosquitoes so big they could puncture your car tires” and discuss corned beef cooking for the coming St. Patrick’s Day festivities.

A handful of shops and professional offices have filled downtown storefronts that emptied when retailers fled to malls in the 1970s. Village Hall doubles as the photo gallery for the Miss Lake Villa Pageant.

The pace picks up, though, at Lake Villa’s three lakes, where residents swim, boat and fish.

Lake Villa is a village where “lake frontage” highlights real estate ads. Former summer cottages that have morphed into year-round homes huddle around the lakes. The stars among them are the mansions built by Chicago retailer E.J. Lehmann and his children.

“He convinced the railroad to stop here,” Loffredo said. “Lots of people came out here to his summer place. He was a man who knew how to party.”

In the late 1800s, “Lake Villa was spelled “L-E-H-M-A-N-N,” according to “A History of Our Town,” edited by J.K. Trychta.

Lehmann bought and expanded a hotel here, “intending to make this another Lake Geneva,” said Sue Cribb, president of the Lake Villa Historical Society. “But the hotel burned down, his wife had him committed (for reasons unknown), and that was that.”

A monument to that era is the restored 1912 Edward Lehmann mansion, named for E.J.’s son and part of the new Frank M. Loffredo Park. In September, during the village’s annual Civil War Days, the house is surrounded by “cavalry.” Though the community had no direct link to the Civil War, Loffredo said, the site offers a nice setting for commemorations.

Another revived architectural treasure, once home to a Lehmann granddaughter, is Tir Na Nog Estate, available for rentals for corporate events, weddings and family reunions.

As the village expanded, it set aside 100 acres of parkland that include a skate park, ice rink, disc golf course, ballfields, beaches, playgrounds, tennis courts and boat launches.

“We are also forest-preserve intensive,” said Loffredo, referring to land that encircles the village. Lake Villa’s subdivisions were mostly built on land the village annexed during the building boom in the 1980s and 1990s. Here, buyers find more modestly priced homes than those in towns fewer Metra stops from the Loop.

Two-story, single-family houses start at $271,990 at Orleans Homebuilders’ Prairie Trail development. Meritus Homes is picking up where another builder left off with Lake Vista, where prices and home plans are coming soon, said the builder.

In addition to single-family houses, 25 percent of Lake Villa’s homes are multifamily. That includes Cedar Village, a midrise downtown apartment building, plus a scattering of town houses in the subdivisions.

Read full article at Chicagotribune.com