HAFA Program 2012 Updates to the program
The Obama Administration has announced updates to its HAFA Program which will help expand the amount of
struggling homeowners that will be eligible for these programs as well as provide additional guidance for loan
HAFA allows you to transition from a home you can no longer afford. One option under HAFA is being able to do a short sale on your
home without having to pay the deficiency balance after you sell it. The HAFA program offers $3000 in relocation assistance.
In March 2012, the following updates were made to the HAFA Program:
The deadline for HAFA has been extended. A borrower now has until December 31, 2013 to submit a Short Sale Agreement or a
written request for a consideration for a Short Sale Agreement to be eligible for HAFA.
There are no longer any occupancy requirements for HAFA eligibility. (Before the update the property had to be occupied as the
borrower’s primary residence at some point within the prior 12 months).
2nd liens can now get up to $8,500. (It was $6,000).
Servicers can now accept a full payment, if the borrower requests to make a full contractual payment in order to stay current on the
Get more information on the HAFA Program.
See more details on the Updates to HAFA and other Making Home Affordable Programs.
House Votes to Eliminate 'Phantom Tax'
Daily Real Estate News | October 5, 2007 as excerpted from Realtor Online Magazine
The U.S. House of Representatives voted on Thursday to get rid of a tax burden for home owners who have had a loan forgiven or
foreclosed on their home because they were unable to make their mortgage payments. The Mortgage Cancellation Tax Relief Act, H.
R. 3648, passed by a vote of 386 to 27. Similar legislation is making its way through the Senate.
Since the early 1990s, NAR has supported such measures to eliminate the "phantom tax" on financially-strapped home owners.
“Congress made a good decision that will affect many Americans who find themselves in a truly bad situation,” says NAR President
Pat V. Combs. “Changing the IRS code is an issue of fundamental fairness. It would relieve a tax burden at a time when an individual
or family has experienced a true economic loss arising from the sale or loss of their home. These families are already in financial
distress and are most likely unable to pay additional taxes.”
The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has
been forgiven. This disclosure applies whether it is a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement
that relieves the borrower of the obligation to pay some portion of their debt. If the property is sold at foreclosure or is sold for less
than was borrowed, that difference is considered income and is subject to the tax.
H.R. 3648 would ensure that any amount forgiven on mortgage debt secured by a principal residence will not be taxed. The
legislation has a provision to safeguard against abuses. That provision is similar to one that already exists for commercial real estate
owners and would treat commercial and residential property equally.
"This is not only about the subprime turmoil we are currently experiencing," Combs says. "This is also about families who have lost
their home or a need to sell that home for less than the amount owed on their home mortgage because of job loss, divorce, health
issues, a decrease in the value of the home or other unfortunate circumstances. Clearly it is unfair to tax people on phantom income
when they most likely have no cash with which to pay the tax."
In other news, another bill has been sent to the House Judiciary Committee that would revise the bankruptcy code to allow judges to
order mortgage lenders to ease terms for home owners in bankruptcy proceedings. Currently, mortgage lenders can foreclose
against a home owner in default 90 days after the filing of bankruptcy.
— REALTOR® Magazine Online
Disclaimer- Commentary is presented to direct attention to the legislation that affects residents of Illinois. Some legislation may not directly or indirectly affect the reader. Commentary is
not necessarily the view point of PRP, Inc. or it's employee's, independent agents or the source's where information may have originated. Further investigation prior to acting is recommended
whenever voting for or against any policies that affect the Illinois constituency. Some Information was reprinted from a CCIA general email indicating that further investigation is warranted
by those that the policy potentially affects. Always attempt further research when issues affecting your rights are presented in any forum or format for better comprehension and opposing
commentary views to better understand political issues.
Realtor.org materials are copywritten- Copyright National Association of REALTORS®, Reprinted from REALTOR.org with permission
Updates on Real Estate and Finance Legislation
IRS- Tax Updates for Real Estate
The bill is H.R.3648- Capiital Gains
regarding sale of principal residence..
The capital gains change is in Section 7- this
legislation has become law and allows the
surviving taxpayer up to 2 years to claim up
to $500,000 in income as a one time
proceeds transaction from the sale of
In it's basic terms..."Married, joint-filing
sellers of houses can exclude up to
$500,000 of gain, and single-filing sellers
can take up to $250,000 … provided they've
used the property as a principal residence
for a cumulative two of the previous five
This legislation was revised because many
surviving spouses were faced with a rather
tough decision- within a year of a
partners passing, they had to sell the
home to claim the full $500,000 exclusion or
keep the property and only get a 1x
Thankfully, for many this will allow now single
filing spouses more time to make vital
decisions about their financial and personal
Regarding Reverse Mortgages at a time when Seniors are in need of funds from somewhere! We voiced our opinions on this
release of the dollar amount lending cap on financing & it passed!
Bankruptcy Bill- Passes making it harder to Claim bankruptcy or recover after a financial set back. The American Bankruptcy
Institute in a rather interesting turn of events- Foreclosures in Illinois actually dropped in the 2005 year.
- The Illinois House of Representatives held a day-long “Committee of the Whole” hearing on Monday to allow public testimony
from those negatively affected by the dramatic budget cuts of the Governor. Later in the week the House overrode nearly all of the
$463 million cut from the budget and sent the budget bill to the Senate for their consideration of the cuts. While the Senate
President, Senator Emil Jones, had earlier indicated that he would not support efforts to override any of the reductions there may
be some movement on that position. Any action would have to occur next week in the Senate.
- Limited action this week on the legislation dealing with mass transit funding as the Senate sponsor filed an additional amendment
to House Bill 3667 but did not call the bill for a hearing or vote. The House Mass Transit Committee has scheduled yet another
hearing next Tuesday, October 9th in Chicago . The IAR will participate in this hearing which is expected to focus on the capital
projects proposal and funding options. While discussion continues at the Statehouse for other funding alternatives none of those
alternatives has been drafted as amendments to either of the pending bills. As a reminder, there are two nearly duplicate bills
pending on the mass transit package- SB 572 (in the House) and HB 3667 (in the Senate) which include both a regional sales tax
increase and the authority for a real estate transfer tax increase in the city of Chicago. BOTH bills contain the identical language
STRONGLY OPPOSED BY THE IAR creating the glaring exception in existing law for the city of Chicago to increase its real estate
transfer tax without a public hearing and without voter approval. THANK YOU FOR YOUR RESPONSE TO OUR CALLS TO
ACTION ON THIS CRITICAL ISSUE. WE NEED TO KEEP THE MESSAGE LOUD AND CLEAR TO MEMBERS OF THE GENERAL
ASSEMBLY AS WELL AS TO THE MEMBERS OF THE CHICAGO CITY COUNCIL AND MAYOR DALEY THAT AN INCREASE IN THE
REAL ESTATE TRANSFER TAX SHOULD BE REJECTED!
- The House and the Senate took alternate paths this week on the property tax exemptions package, which included the so called
“7% solution” provisions for Cook County . As we reported last week, the Governor had used his amendatory veto power to modify
language in House Bill 664 that had been negotiated between the chambers earlier to increase the assessment cap and to make it
permanent (rather than a 3-year phase out). Representative Barbara Flynn Currie, the Majority Leader successfully pursued an
override of these changes on Wednesday afternoon and the House approved the motion to override on a roll call vote of 92-19-0
(71 votes were needed for passage). This override effort was SUPPORTED by the broad coalition originally opposed to the bill
(including IAR) because of the objection to the Governor’s changes making the 7% solution permanent and increasing the cap
amount. The following link is the roll call vote on the override motion:
http://www.ilga.gov/legislation/votehistory/95/house/09500HB0664_10032007_016000M.pdf The Senate, however, embraced the
Governor’s changes and codified the changes in an amendment to House Bill 315. On Tuesday afternoon the Senate Executive
Committee voted to send House Bill 315 to the full Senate for their consideration by a vote of 8-4-1. The General Assembly
adjourned for the week with the issue unresolved. The Senate did NOT move their version of the bill and it is unclear if they will
consider the override motion on HB 664 next week.
- The Senate OVERWHELMINGLY voted to override the Governor’s amendatory changes to Senate Bill 1201 on a roll call vote of
53-1-0 (http://www.ilga.gov/legislation/votehistory/95/senate/09500SB1201_10032007_009000M.pdf). As you recall, this
legislation contained language necessitated by the legislation from 2005 that combined two planning entities (the Northeastern
Illinois Planning Commission and the Chicago Area Transportation Study) in the Chicago metropolitan area that created a special
unit of local government- the Chicago Metropolitan Agency for Planning (CMAP). This special district is now charged with many of
the functions carried out by the former entities dealing with the establishment and implementation of an integrated policy for
development and transportation planning. The Governor opted to remove an important provision of SB 1201 that was essential to
our support of the measure; i.e. the creation of a Wastewater Committee to deal with facility planning areas (FPAs). In order for
this bill to become law over the objections of the Governor the override motion must also be approved in the House which is
expected to occur next week.
- Another bill vetoed by the Governor was House Bill 3729. This bill amends the Private Sewage Disposal Licensing Act to
authorize the Illinois Department of Public Health to allow the use of alternative private sewage disposal systems under specific
circumstances. The Governor did not specify his reasons for the veto beyond that he did not agree with “some aspects” of the
legislation. The House unanimously overrode the Governor on a roll call vote of 113-0-0. The override motion must be acted
upon by the Senate next week. The IAR was NEUTRAL on this legislation.
- There was also legislative action on override motions of the Governor’s TOTAL veto of two bills that extended the life of two
specific Tax Increment Financing Districts (TIFs). This action was taken by the Governor despite the fact that he had signed into
law similar legislation for other communities. The veto of House Bill 2036, sponsored by Representative Chapin Rose and Senator
Dale Righter, which would extend the life of a TIF in the city of Villa Grove was overridden on Tuesday by the House on a roll call
vote of 110-3-0. The motion now must be considered by the Senate. The veto of Senate Bill 247, sponsored by Senator Frank
Watson and Representative Bob Flider, for the extension of a TIF in the village of Mt. Zion was overridden by the Senate on
Wednesday on a roll call vote of 54-0-0. This motion must now be acted upon by the House. The IAR was NEUTRAL on these bills.
The City of Chicago Residential
Landlord and Tenant Ordinance (RLTO)
requires the City Comptroller to set the rate
of interest to be paid on security deposits
held by landlords. The rate is calculated
annually based on a formula tied to actual
market rates. The new rate for the period
from January 1, 2010 to December 31, 2010
for Chicago 0.073% and Illinois .095% and
the Interest rate for the period from January
1, 2009 to December 31, 2009 for Chicago
and Illinois respectively was 0.12% and
0.25%, The amount of interest paid on
security deposits is determined by the rate
in effect on the date the lease term
commences. Owner-occupied buildings of
six or fewer units are not required to pay
interest on security deposits.
City code requires that a general
summary of the RLTO and a separate
summary on security deposits,
including the required rate of interest,
be attached to each lease. Revised
summaries containing the new rate of
interest are being printed and will soon be
available from CAR. Copies of the revised
summary will be sent to each CAR office as
soon as they are printed. These revised
summaries should be attached to each
lease executed during 2010
For more information contact:
Chicago's Metropolitan Tenants
MISSION: Metropolitan Tenants
Organization (MTO) is a coalition of
community organizations and individuals
dedicated to safe, decent affordable
housing for all. MTO works on projects that
support the self-help efforts of tenants to
exercise their rights: operates a tenants
rights hotline, trains community-based
organizations, organizes buildings and
participates in affordable housing advocacy
Contact the Tenants Rights Hotline at:
Monday, Tuesday and Thursday from
4:00 to 8:00 p.m.
Wednesday from 11:00 a.m. to 2:00 p.m.
Friday 3:00 to 6:00 p.m.
Metropolitan Tenants Organization
2125 W. North Ave.
Chicago, IL, 60647
(312) 292-0333 (fax)
Can you imagine standing in court with your deadbeat tenant, and being told by the judge (after 6 weeks and much expense) that the tenant (who owes you thousands of dollars) can
pay you the current months rent, and they can stay!
If you are a landlord who has ever experienced the lopsided eviction laws - you will find this a horrible new assault on your rights. If you have to make your mortgage payments, tax
payments, insurance payments, keep the property in repair, etc, etc, etc - it is crucial that you have the right to get your rent, or get possession so that you can re-rent the property.
Insulted - you should be, Our legislators think we need to support the deadbeats of the world. It is time to call them on this. Here are the details of this newest assault. Please take
action today to stop this bill!
Subject: FORCIBLE ENTRY MORATORIUM
SB2124, sponsored by Senator John Cullerton of Chicago, Amends the Code of Civil Procedure and provides that no forcible entry action may be filed against a person who occupies
a single family residence, apartment, condominium unit, or dwelling unit before January 1, 2010 if the person paid the current month's rent and is lawfully in possession and the only
default that the complaint would allege is overdue rent. Provides that nothing in the added provisions prohibits filing a complaint for overdue rent or for possession based upon
grounds other than overdue rent. Provides that if a complaint alleges grounds other than or in addition to overdue rent as a basis for possession, the action proceeds to judgment,
and the judgment only finds overdue rent as a basis for possession, the court shall provide the defendant with an opportunity to pay the current rent and remain in possession; if the
defendant pays the current month's rent, the court shall stay the order for possession provided the defendant continues to pay the rent on a timely basis. Provides that before January
1, 2010, a defendant may only invoke these protections one time. This bill is on 2nd reading in the Senate.
The Illinois Rental Property Owners Association would like you to join the grassroots effort to help stop this proposed law. Let your State Senators know, in person, by phone, fax or
Please visit or call them and ask them to VOTE NO on SB2124.
To find contact info to your legislator http://www.elections.il.gov/DistrictLocator/SelectSearchType.aspx?NavLink=1
|Contacting your Elected
|City of Chicago Planning
Dept. - Permits for Plans Reviewed
Department of Buildings Requiring 50 Percent Fee With All Permit
Applications. Deposit to Increase Efficiency and Recoup Partial
Costs for Plans Reviewed
The Department of Buildings will start requiring a 50 percent deposit on
permit applications on January 3, 2012.
The deposit requirement is designed to recoup a portion of the cost the
department incurs for reviewing and approving plans that are never
completely permitted and also to discourage design and building
professionals from submitting plans for projects that may not yet have
Currently, permit fees are not assessed until the end of the process when
the applicant picks up the permits. Hundreds of permits are reviewed and
approved each year for which applicants do not pay or complete the
“Our plan examiners spend time and effort reviewing all drawings that are
submitted,” said Michael Merchant, Commissioner for the Department of
Buildings. “Reviewing plans that never complete the permit process
forces other projects to wait longer for their permit times. Charging a
deposit will allow us to capture part of the fees owed to us without overly
burdening submittals at the start of the process and allow other projects to
move along quicker.”
Illinois law 1167 Requiring Counseling for buyers seeking ARM, or exotic
For more about this and whom must be subjected to counseling.
Renters had been getting the short
end of the foreclosure process
...for many years now. The judge for Cook
County Evictions has just said "NO" more
extra work trying to get tenants to move
when the lender isn't doing enough to make
sure notices are properly delivered.
What a giant step in the right direction by
our Illinois law makers. Renters now have
to have sufficient notice before the Sheriff's
can put them out.
Here's the link: Go To News Article
Latest Update: Foreclosed Renters
allowed to get better notifications
District Locator Legislator Lookup:
January 1st, 2010- Renters and
Homeowners are getting longer periods to
stay in their homes- not because it's right
but because the system is bogged down
with paperwork and legal red tape. The
current moratorium runs out January 5th,
2010 but many people will get some indirect
help with lenders that don't want to wait and
will consider more deals to approve Loan
Modifications rather than wait their turns in
the legal system.
--On October 6, 2008 the Governor
...signed into law Senate Bill 2287 (Public
Act 95-999). This legislation, sponsored
by Senator Kwame Raoul and
Representative Pat Lindner, initially sought
to expand the existing Safe Home's Act to
allow tenants to recover a minimum of
$2,000 plus attorney’s fees from a landlord
if the landlord shares “any information
provided by the tenant” in exercising
his/her rights under the Act to a
prospective landlord. The IAR had pointed
to a number of concerns with the original
legislation including the fact that a tenant
would not have to actually incur any
damages in order to recover the $2,000.
Representative Pat Lindner, amended the
bill to hold the landlord liable for actual
damages up to $2,000 resulting from the
disclosure- instead of liable for any
damages resulting from the disclosure or
$2,000, whichever is greater. This new
language is now in effect-becoming law on
the day it was signed by the Governor.
Seller's- Particularly Seller's of Vacant homes in Chicago City area.
New legislation has passed that makes it very expensive to leave and abandon housing
in the City of Chicago area. For a print-out of the .pdf file details Vacant Property
An introduction to managing money to Get What
Visiting this web site could be the first
of it's kind to teach you how to manage
your money or better yet How to
Manage your Spending.
Your best loan officers have credentials
like CMPS- these certified
professionals have the financial ability
to help you increase your net wealth.
Getting a mortgage is not something
you pick up on the way out of the
Realtors office. It helps to have an
understanding of the ways that
mortgages can help you and how you
can reduce the overall interest you will
be paying on the money you borrow. If
your Loan Officer doesn't ask you
about your savings plans, you should
be asking and even better yet, get the
loan officer that tells you something you
For the first time in history the Illinois public can participate in the state’s budget process. The Governor’s Office of Management and
Budget (GOMB) launched www.budget.illinois.gov, a Web site that invites public feedback for shaping the state’s fiscal year 2011
|Illinois Interactive Budget Web Site
|2010 Delinquent property tax
sales begin August 1, 2012