How Rising Interest Rates Are Impacting the Real Estate Market

On May 4th, 2022, The Federal Reserve announced that short-term interest rates would increase by 0.50% to combat inflation and stabilize the economy post-pandemic. The rising interest rates have broken records and have had a noticeable impact on the real estate market, particularly for investors.

This is nothing new. Interest rates have historically been reduced to support an ailing economy by stimulating growth. It’s what happened during the recession and when the Covid-19 pandemic first hit. The downside was inflation, which increased interest rates, so businesses and people didn’t have to borrow money for large purchases.

What Rising Interest Rates Mean For Investors

When interest rates rise, houses become more expensive, and naturally, their demand reduces as well. In turn, this forces housing costs to decrease as well. However, the existing market is a bit different – there has been an increase in housing costs because of the following reasons:

Foreclosures impacted by the Covid-19 pandemic.
Millennials are old and established enough to afford homes.
Not as many single-family homes as there used to be because of labor shortages and supply chain problems.

Experts believe that while short-term investments are risky, investors can still look into long-term options that can provide better gains. You can withstand inflation with a property that can act as a source of income a few years later.

What Multifamily Investors Should Consider

You can go for a fixed rate when you refinance an apartment or buy a multifamily property, but you should look into other factors besides interest rates. These include:

Shifts in demographics

Demand is outpacing supply in the housing market as interest rates rise. However, as the economy recovers, more people may move into the cities from the suburbs. This can be a new market for you to tap into as an investor, including individuals looking for housing near their workplaces.

The local market

Real estate is mostly a local business, so look into your niche before refinancing or buying. Also, consider each property’s capitalization rate – these rise with interest rates.

The existing financing structure

Short and long-term loans may be affected by rising interest rates. Consider factors that affect mortgage rates, such as a 10-year treasury lead. These yields reflect investor sentiments on the economy. Rising yields may point to higher inflation rates and vice versa.

As interest rates rise, knowledgeable and proactive Illinois real estate attorneys can help you determine a solid plan of action regarding your real estate investments.

Contact Covert Legal for a Consultation Today

For more than four decades, the Illinois real estate attorneys at Covert Legal in Warrenville have been aiding real estate investors, and other clients reach their goals. We have experience preparing contracts, and negotiating sales for homes, vacant lands, and even commercial property. We have also represented clients in court for boundary disputes, title disputes, and other issues.

Do DUI Arrests Increase in Illinois During the Summer?

Summer accounts for 28% of driving fatalities in Illinois and the US, making it the deadliest season. The Fourth of July, Labor Day, Memorial Day, and other summer holidays are considered the deadliest for DUI-related car accidents.

If you are charged, you can face hefty fines and jail time. The charge can also compromise your job prospects, harming your home life. Defense Illinois DUI lawyers can help you avoid such situations or reduce the charges.

How to Avoid A DUI During Summer?

Whether you are partying with friends or celebrating a national holiday, if alcohol is flowing freely, your chances of getting a DUI will increase exponentially. You can avoid punishing charges by following the following tips:

Have a Designated Driver

Before heading out to the festivities, ensure you have a designated driver. This individual should stay sober for the whole day so they can take you back home safely. Make sure this is a person you can trust not to drink.

Call an Uber or use Public Transportation

If you cannot get a designated driver, use rideshare options such as Lyft or Uber. You can also consider public transportation such as trains or buses. If you are caught drunk behind the wheel, and your blood alcohol content (BAC) is 0.08 or higher, you will be charged with a DUI. Better yet, hand your keys to someone else and tell them not to return them to you unless you are sober.

Obey Traffic Rules

If you have no choice but to drive home yourself and those drinks start to kick in, pull off the road safely and as quickly as possible. If you are not inebriated and have had a couple of drinks, obey traffic rules, so you are not pulled over.

This includes ensuring you remain within the speed limit and don’t look at your phone even if it starts ringing. Your hands should also be on the steering wheel at all times. You will be charged with a DUI if you are pulled over, and the officer smells alcohol on your breath.

Eat Something Before You Get Behind the Wheel

If you are drunk, ensure you eat something before you get behind the wheel. The food will slow down the effects of the alcohol on your senses. If your stomach is empty when you drink, your body will absorb the alcohol you consumed much faster. So make sure you eat some pretzels before getting in your vehicle or spread out your drinks, so your BAC doesn’t reach 0.08.

Contact Illinois DUI Lawyers If You Face Charges

DUI arrests can lead to severe punishments, from license revocation to extensive fines and jail time. The charge cannot be removed from your permanent record, which will impact your future. If you are charged with a DUI in Illinois, contact our Warrenville DUI defense attorney specializing in such cases. They can help you understand your options and find an appropriate way to fight back and preserve your future interests.

At Covert Marrero Covert LLP, we understand that most people who get arrested for drunk driving are unaware of how to proceed with a DUI defense. We have defended people charged with this offense for years and can help you understand your options. The last thing you need on your permanent record is a criminal charge that will follow you for the rest of your life. Contact us for a consultation today.

How Have Rising Real Estate Prices Affected Short Sales in Illinois?

Real estate market prices will continue to increase throughout the year, and sales are forecasted to decrease. In February, for instance, the median price in Illinois rose, but homes in the state still sold rapidly despite a sparse inventory.

At this time, the increase in real estate prices slowed, but the industry remained competitive. A short sale during this time may yield the same results that it would in a stable economy, but expect a faster sale. Experienced Illinois short sale attorneys can help you set up a short sale quickly and efficiently.

What is a Short Sale?

A short sale is a transaction in which a homeowner or borrower agrees to accept less than the mortgage amount they owe to a lender. Some lenders can forgive the difference, but if yours doesn’t, ensuring you get a reasonable price for your short-sale property is essential.

It is still preferable to foreclosure, especially if you are behind on your mortgage payments – you may be able to qualify for another mortgage once you can apply for one again. With the real estate market remaining competitive and rising property prices, a short sale can be a blessing in disguise for you.

If you could not make regular payments because you lost your source of income during the pandemic, a short sale can yield better results when real estate inventory is low and property prices are high. Your price for a short-sale property lies comfortably in the middle. It is neither too expensive for buyers nor too cheap for sellers (you).

Inflation and Short Sales

The housing market was already experiencing short supplies and high demands before the pandemic, and its arrival aggravated it further. Many renters found searching for affordable housing rugged, while homeowners looked for opportunities to sell high and increase space. As the demand increased, homeowners preferred to remain in their homes rather than sell them, which limited the number of sellable properties.

Prices are expected to increase throughout the year, and the number of sales may decrease. In February 2022, homes sold rapidly due to low inventory and high demand. During this time, the median price rose by 6.4% compared to last year.

For home sellers, especially those that place their property on a short sale, inflation is a good development. The value of your home rises as the property of goods rises. With demand high and supply low, investors and renters look towards short sales to get properties below market price even if it is higher than standard short sale rates. With experienced Illinois short-sale attorneys in your corner, you may be able to get a better price.

In this market, investors who invest in property as a leveraged asset have little choice but to pay the same fixed rate even if property values rise.

Contact Covert Marrero Covert LLP for A Consultation Today!

Whether it is on a short sale or not, selling a home is one of the most significant decisions you can make as a homeowner. It would be best to have experienced Illinois short sale attorneys in your corner with extensive knowledge about the current market rates, such as those at Covert Marrero Covert, LLP. Our attorneys have years of experience guiding clients through complex real estate processes that may otherwise lead to costly mistakes. Contact us for a consultation today!

How Does a Deficiency Judgment In Illinois Work?

The Illinois foreclosure process can be complex and have long-lasting financial repercussions. In the state, lenders can also get a deficiency judgment against defaulting borrowers to acquire an outstanding balance of a loan post-foreclosure. At this point, borrowers should consider hiring an experienced and determined Warrenville foreclosure defense attorney.

What Is A Deficiency Judgment?

A lender can ask the court to pass a deficiency judgment if they want to pursue an outstanding balance on a loan after a property is foreclosed. The debt and other charges are supposed to be paid from the proceeds. If the amount you get from the proceeds cannot cover the debt, you will still need to pay the remaining balance as per the deficiency judgment.

Types of Deficiency Judgments

There are two types of deficiency judgments you can face:

In Personam

An in personam deficiency judgment is issued against borrowers. In this case, they are personally liable for the deficiency, which lenders can collect through their wages, via their bank account, or by securing non-exempt assets.

In Rem

An in rem deficiency judgment is passed on the property itself i.e. the borrower redeems the property by paying the outstanding balance to the bank with additional fees and interest. In this case, the lender can place a lien on the property for any remaining balance on the debt post redemption.

Let’s place both deficiency judgments in perspective with an example. Say you owe over $500,000, and your property sells for $300,000. In this case, $200,000 is the deficient amount. If the lender files a lawsuit against you and gets an in rem or an in personam deficiency judgment, you are legally obligated to pay them back as per both judgments. If you fail to do so by closing your bank account or refusing to pay, the lender may sell the judgment to a collection agency.

The best course of action if you receive an in personam deficiency judgment is to file for bankruptcy. For example, you can eliminate the judgment by filing for Chapter 7 bankruptcy. If you file for Chapter 13, on the other hand, you may have to repay a part of the debt via a long-term payment plan. In either case, you need an experienced Warrenville foreclosure defense attorney in your corner.

Get In Touch With Covert Marrero Covert For A Consultation Today!

If you have received a foreclosure notice, we understand how stressed you must be. Receiving one can be one of the most traumatizing events you can face, especially if you have a family to support. The process can be pretty complex, and if you also receive a deficiency judgment, you face an uphill battle without an attorney.

From ensuring your paperwork is filed correctly to formulating practical strategies tailored to your needs, the lawyers at Covert Marrero Covert LLP can prove invaluable. We understand that you have to act quickly after receiving the notices and can work out a payment schedule with the lender on your behalf. Get in touch with us for more options from an experienced Warrenville foreclosure defense attorney today! We only have your best interests at heart.

Is It A Good Time For A Home Loan Modification?

While the Covid-19 pandemic is ending, homeowners are still falling behind on mortgage payments as they build back their finances. Foreclosures hit record low rates in 2021 due to government relief efforts, but will that trend end as the housing market normalizes? A home loan modification is a good idea for homeowners who face foreclosures down the road despite these relief programs.

What Is A Home Loan Modification?

A home loan modification is ideal for homeowners who want to leave forbearance but are not eligible for refinancing. If your financial outlook is not going to change anytime soon, this is a good option.

Your lender will either reduce your rate or increase the loan term to make your mortgage affordable and manageable by modifying your loan.

President Joe Biden’s Mortgage Relief Plan

If you opted for VA, FHA, or USDA loans, you might even be eligible for President Biden’s mortgage stimulus program. It allows homeowners to reduce their payments by almost 25% via a home loan modification.

This is how the program works – homeowners who opted for government-backed mortgages and were unable to make their monthly payments during the pandemic receive enhanced aid. The option is especially beneficial for those who cannot pay their taxes, are searching for employment, re-training, or face any other hardship.

Loan modification options differ as per the loan program a homeowner participates in:

Loan Relief for FHA Loans

With FHA loans, homeowners will be able to lower their monthly interest and principal payments by a whopping 25%. These changes also include increasing the loan term by 360 months per the current market rate.

Loan Relief for USDA Loans

Borrowers who opted for USDA loans will be able to reduce their monthly payments by up to 29 percent via interest rate reductions, term extensions, or by covering past mortgage payments if they have them.

Loan Relief for VA Loans

Similarly, homeowners who opted for VA loans can also get a 20% payment reduction on their mortgages and larger ones. The loan terms for this kind of loan may also be extended to 480 months, reducing overall mortgage payments significantly. On the other hand, it may increase the interest rates that have to be paid over the life of the loan.

Home Loan Modifications in Illinois

Illinois is creating a mortgage relief program called the Illinois Homeowner Assistance Fund, effective from April 2022 onwards. Under the program, eligible households will be able to apply for $30,000 in free aid that can help them pay off property taxes or reduce overall payments, among others.

Homeowners who live in communities that have been hit hard by the pandemic will be prioritized at no cost. To qualify, homeowners must prove that they have been suffering financially because of the pandemic on or after January 2020. Plus, they must also own or live in their home as a primary residence, be at least 30 days late on mortgage payments or other expenses, and have a total household income of less than 150 percent of the area median income.

Get a Home Loan Modification Easily With help from Covert Marrero Covert

Having a Warrenville home loan modification attorney in your corner is a good idea. Contact our home loan modification attorneys at Covert Marrero Covert LLP for on and off-site appointments. We will streamline the process for you.