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Articles Tagged with real property

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Henderson Square Condo. Assoc’n v. LAB Townhomes, LLC¬†et al.
Citation: 2015 IL 118139 Opinion Date: November 4, 2015

After LAB Townhomes, the developer of Henderson Square,¬†made false sales claims, built shoddy units, and engaged in fraud and negligent conduct in order to sell units, the Condominium Association sued it under the Chicago Municipal Code’s prohibition on the use of material misrepresentations, as well as Illinois case and statutory law relating to breach of the implied warranty of habitability, fraud, and negligence.

Following an initial defeat in the Trial Court based on allegedly filing late, the Appellate Court and eventually the Illinois Supreme Court determined that the bad actions of the developer permitted a longer time-horizon for the Plaintiff condo owners to pursue their rights.

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As a Bankruptcy lawyer I can’t count how many times people have asked why Courts won’t reduce their mortgage debt to match the deflated value of their home, or why they should pay anything on that second mortgage, line of credit, or HELOC, when they’re underwater. I even discussed these questions and the state of the law concerning lien strips in this post. Now, the very cases referred to in that post have made it to the U.S. Supreme Court and the stage is set for the battle of the lien strip cases.

Of course this all started with the Supreme Court’s 1992 Opinion in Dewsnup v. Timm that the Bankruptcy Code does not permit the cramdown of a partially secured mortgage. Some Courts took this to mean that lien-strips are a no-no. Others interpreted it to mean that lien-strips were permissible under the right circumstances. So in some parts of the country a completely unsecured second mortgage can be stripped, but only in a Chapter 13 reorganization; while in other parts it can be stripped in a Chapter 7 liquidation, too.

So, with Courts in disagreement, what’s a home-owner to do? Remember, in Dewsnup the Court ruled the Bankruptcy Code doesn’t permit mortgages to be written down to the value of the home – even though that practice, known as the cram down,  is acceptable as to vehicles. Ironically, one of the Court’s primary concerns in Dewsnup was to prevent windfall gains to home-owners who strip away their loans, then enjoy the profits as their homes rise in value.

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Recently I got an e-mail from the newly-formed Consumer Financial Protection Bureau (CFPB). You remember the CFPB, right? No? That’s alright. But you probably remember the agency’s public face, now-Senator Elizabeth Warren of Massachusetts.

So, after coming out of the shoot a few years with the President’s blessing and much fanfare, the CFPB has released the first of several consumer-friendly web-based guides. This one is its Guide to Owning and Buying a Home.

The 3 primary resources offered on the CFPB site are:

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These are dark times in the galaxy….

Unemployment is stubbornly high. The recovery has nearly stalled. People’s savings are low. The housing market’s so-called rebound has been uneven. Since June 2011 almost a million and a half people have sought bankruptcy protection. The number of filers keeps growing (so much for the salutary effect of BAPCPA).  Is there hope? 

A New Hope

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