Are there any Illinois investors or anyone that can shed some light on the new law going into effect on Jan 1st 2007? any info would help!!
heres the link
http://www.ilga.gov/legislation/BillStatus.asp?DocTypeID=SB&DocNum=2349&GAID=8&SessionID=50&LegID=23053
Thank you
The way I read it is your only allowed to purchase the property from the home owner at 82% of fair market value. then you have to give them a chance to lease it from you or buy it back. it makes it a felony if you don’t.
Well I found some info on this subject at this website
I guess I can leave the rest to discussion here.
This is a real bad law for those of us who are really trying to help the distressed homeowner
I just found a plain english version of this new law here
http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=094-0822
for some reason the link won’t work, you need to copy and pasted it in your browser
Well I’ve noticed that no one has posted any replies to this thread yet. So I’ve done some more research on this subject and found this
http://www.lease2purchase.com/wwwboard/showthread.php?t=359&highlight=2349+illinois
reading this gave me some relief. (You can read what he said near the bottom of the page) as I now have 3 deals in the works. All these people are from 2 to 3 months behind in payments to their banks and I’m trying to short sale with their banks so I can wholesale the properties.
This guy is no attorney, But I think he interpeted it correctly.
I’m new to investing and I just joined a REIA group in this area. they meet at the beginning of each month and have a couple real estate/foreclosure attorneys in their group. So I will have a few questions for them when I go to the meeting in December. By the way if any investors that read this work the St Louis/Metro east area. Please contact me.
Rollx,
There has been great discussion and debate on this upcoming law. The key question I have is who determines what is 82% and of WHAT? Who is setting the value.
We have had tons of mortgage fraud going on because appraisers are working with people to appraise a property way to high.
I am not an attorney or lawmaker. I am just a fellow investor. My interpretation of this law is.
It talks about Distressed property consultant. Basically it says, the seller can not pay you a fee to help them, try to help them, etc… People had claimed they could stop the process and fix their credit, if they were paid 2K or such up front. They would take the money and never be heard from again.
Here is the key area of this law:
“Distressed property
purchaser” does not mean any person who acquires distressed
property at a short sale or any person acting in participation
with any person who acquires distressed property at a short
sale, if that person does not promise to convey an interest in
fee back to the owner or does not give the owner an option to
purchase the property at a later date.
This means, you can purchase the property as long as you do NOT let the person live in the property as a renter, let them have any interest in the property. It basically says that it has to be perfectly clear the person is selling their house and has to move out.
Here is the part that I think says that:
“Distressed property conveyance” means a transaction in
which an owner of a distressed property transfers an interest
in fee in the distressed property; the acquirer of the property
allows the owner of the distressed property to occupy the
property; and the acquirer of the property or a person acting
in participation with the acquirer of the property conveys or
promises to convey an interest in fee back to the owner or
gives the owner an option to purchase the property at a later
date.
So from my gatherings, I think it says, no leasebacks. Which I never recommend anyway. As much as we are helping people, hey THEY COULDN’T AFFORD the house as it was. What says they can afford the rent on the house?
The worse of the Two new laws in IL is HB4050. This is being dubbed the Redline law. Luckily you are in St Louis and not in Chicago. This really doesn’t hurt investors, it kills people’s own ability to sell their own home.
Good luck with investing. It is great you joined a local club!
Thank you Ryan for your response. From what I’ve been reading what I can find online at different blogs on this subject (theres not that many of them) this law should not effect what we are doing, because we are “buying” their house from them with the plans of rehabbing or wholesaling the property after they move out. That should be the key. they are selling and moving out. But with this so called " 82% rule" We could still be breaking the law, because they could be 2 to 3 months behind or more in payments to the bank or lender. Which could be considered “pre-foreclosure”.
So lets say they just wanted out of their house or they just need 5000 to move, and they owe 62000 and the house has a FMV of 100000. We all know this is a good deal for everyone in the deal. A win win situation. Did we just break the law because we didn’t pay $82000?
I wish some attorney that happens to work in real estate investing would post the do’s and don’ts that we need to know. Maybe a form that we need the homeowner to sign stating the fact that they are selling to move out and at the price they believe to be fair. Because of repairs etc, etc.
Our state Illinois, I do live in Illinois. Collinsville to be exact. Which is 15 miles east of St Louis. Is not the only state that has passed or considering to pass simular laws. I believe Colorado has to. From what I’ve been reading. If you go to this website http://www.narhri.org/ You can read more on this.
The homeowner and us as consumers are going to suffer the worst from this when the goverment starts telling us what we have to sell our “house” for. Whats next? What happen to our “free market society”?
So I guess I’m stuck buying REO’s and doing a short sale to wholesale it. Instead of helping a homeowner with no equity and doing a short sale with the bank. If you know of anymore websites that have discussions on this law please pass them on.
Thank you again