What is a Good-Faith Estimate?

When it comes to securing a loan, the good-faith estimate is a three-page form. The good-faith estimate is primarily used to encourage price shopping when it comes to mortgage loans and settlement services, enabling you to determine the best mortgage deal for you.

In terms of content, the form displays the loan terms and settlement charges you will pay if you decide to proceed with a given loan. Furthermore, some charges can be changed prior to the loan's beginning, whereas others must remain the same. The most helpful feature is the "shopping cart" on the form, allowing you to instantly compare multiple loans and settlement costs.

Ultimately, the good-faith estimate may be provided by either a mortgage broker or a mortgage lender. Prior to receiving the report, the loan originators can only charge you for a credit report.
That said, they are unable to charge you additional fees, such as appraisals and inspections prior to the estimate.

For the loan originator to provide a good-faith estimate, he/she will need the following:

• Name
• Social Security Number
• Gross Monthly Income
• Property Address
• Estimated Property Value
• Prospective Amount of Mortgage Loan

For more information on good-faith estimates, contact Michna Law Group by phone at 847.446.4600 or by email at BJM@MichnaLaw.com.

Illinois Real Estate Market - June 2017

Spring and summer are generally Illinois' meat and potatoes when it comes to performing real estate transactions. While this past winter was slow, the market saw a great uptick once springtime arrived.

As a whole, June 2017 home sales saw an increase from June 2016. According to the Illinois Association of Realtors, sales are up 0.3% year-over-year, going from 19,001 to 19,066.

The story is even better for Chicago. The Windy City jumped a full percentage point from 2016 to 2017. One year ago, 13,916 homes were sold, whereas 14,052 were sold this year.

But there is a downside. Illinois home inventory saw a 14% decline from June 2016 to June 2017 as there are now only 59,088 homes for sale (from 68,720).

In response to this, Geoffrey J.D. Hewings, Director of the Regional Economics Applications Laboratory at the University of Illinois said,

"While the housing market continues to record gains in prices and sales, the inventory problem remains an important issue. Hopefully, now that the state has a budget, a recovering state economy will encourage more investment in housing – both new construction and investment by first-time buyers."

In addition,  Matt Silver, President of the Chicago Association of REALTORS® and Partner at Urban Real Estate.

"In June, the market exhibited a bit of a holding pattern. Inventory was a
contributing factor, as once you sell your home, you’ll need to then buy another – so, sellers are being firm on their pricing, and while some buyers are willing to wait for their perfect home, other motivated buyers are driving down the time on market. As the weather continues to heat up, people will get down to business, provided the price is right."

For more information on Illinois real estate, contact Michna Law Group by phone at 847.446.4600 or by email at BJM@MichnaLaw.com.

Protection for Home Buyers

Due to federal law, home buyers are protected by certain provisions during the loan process and the loan servicing process following a settlement. The circumstances in which your protected are widespread.

Some of them include:

• Your lender overcharged you during settlement without reimbursement.

• A settlement service paid or received a kickback for a business referral.

• You were mandated to use a company affiliated with your real estate agent, builder, or originator.

• Your loan servicer failed to pay your taxes or insurance premiums in a timely manner.

• You don't receive a response from your loan servicer regarding a request for information or a reported error.

• You were charged for insurance you don't need or overcharged for force-placed insurance.

For more information on real estate law, contact Michna Law Group by email at BJM@MichnaLaw.com or by phone at 847.446.4600.

2017 Real Estate Trends

Fortune Finance recently published an article detailing real estate trends that will be on the rise throughout the next year. They entail the following:

1. Rising Rates


2. More Credit


3. More New Homes


4. The Continued Rise of Medium-sized Cities


5. Foreign Buyers Aren't Going Away

But how do these coming trends affect you? Let's go down the list.

1. With rising interest rates, there seem to be two separate mentalities: A) When rates rise, income rises so the housing marketing will be just fine, and B) Rising rates don't equate rising income levels, harming home-buying ability. In an article by CNBC, Doug Duncan, Fannie Mae's chief economist said, "If interest rates are rising because the economy is growing more rapidly, then, typically, incomes also rise, and the rise in incomes offset the increase in the size of the mortgage payment, and housing goes just fine." But what if income levels don't increase? After Donald Trump's presidential victory, Fortune also reported that "The increase in purchase activity was driven by borrowers seeking larger loans and that drove up the average loan amount on home purchase applications to $310 thousand, the highest in the survey, which dates back to 1990."


2. In the face of rising interest rates, loan borrowers are seeing additional credit granted. In 2015, Barack Obama's administration lowered its fees for first-time homebuyers and "the Federal Housing Administration will likely lower fees it charges first-time homebuyers" moving forward. As an added bonus, Yahoo! Finance reports that Federal Housing Administration loans come with three key benefits, including easy qualification, competitive rates, and low fees.


3. Because of the rising finances, the creation of homes is following suite, allowing for an economically feasible real estate market. Fortune reports that "average annual rate of new groundbreakings reaching a 1.163 million rate so far in 2016, up about 5% from 1.108 million in 2015". This allows for a greater selection of properties when considering purchasing that first home.


4. While large-scale metropolitan cities may contain the highest-paying jobs in the country, it's actually the medium-sized cities that provide affordable housing. This stems from a basic supply-and-demand model with the larger cities unable to keep up with new homes to meet those flocking from around the world.


5. Foreign buyers, particularly those from China, are seeking high-priced homes in large, metropolitan cities. While this trend will be least likely to directly affect you, "U.S. and Europe continue to attract growing amounts of foreign capital", which will in turn, further develop the housing market and U.S. economy as a whole.

While these trends are said to characterize the pending real estate market, Michna Law Group can help you protect your interests with its title insurance and escrow services. For more information on how we do just that, please contact us via phone at 847.446.4600 or via email at BJM@MichnaLaw.com.