Tuesday, February 15, 2011

Caught in a Catch-22 in Maywood

I have a buyer client that has a HUD home under contract. It is a cash deal. You'd think it would be painless but when dealing with HUD and a Village that doesn’t seem to have its priorities straight, nothing seems to go smooth.

I am not going to re-hash all the details but here's the jist. The home is in Maywood, IL and the village requires a final water reading before tax stamps can be issued. Obviously, without tax stamps, the closing cannot take place.

We scheduled the water reading and met the inspector (this is the buyer's responsibility because it's a HUD house) and discovered that the home had no water meter. We rescheduled the reading and closing and the inspector came back again, only to discover that the pipe that he was going to install the meter to is missing. Now here's the problem. Maywood will not fix the pipe. HUD's position is that the house is as-is. My client, who does not own the house, was advised by his lawyer not to have it fixed because of liability issues. Despite this, he hired a plumber but the plumber refused when he saw police driving around the area --he said he did not want to do unauthorized work and risk his license.

So, what we are left with is this: HUD won't fix this pipe issue and my buyer can't because he doesn't own the house yet and Maywood is saying they won't issue transfer stamps until it is in compliance, and obviously we can't close without the stamps.

If you’ve ever been to Maywood you’ve seen the plethora of boarded-up bank-owned homes. This sort of thing is not good for property values. It also is dangerous to have buildings that can possibly provide a safe haven for drug users and the homeless. I don’t have to remind you that two Chicago firefighters were killed in December in a blaze in an abandoned building started by homeless people looking to keep warm. Though not a HUD house, it was a building that would have been a lot better off for the community if it had a good owner.

My client just wants to buy the house, fix it up, and possibly rent or sell it. Maywood should welcome him with open arms and make an exception in cases like his. I have been told that closing cash deals on REO’s in Maywood always takes twice as long compared to other villages. You’d think with the amount of bank-owned homes in Maywood that they would have a better system. Well, I guess village incompetence is adding to, instead of reducing the problem.

As of today, I remain in contact with Maywood and have our attorney assisting as well. We'll see what happens and I'll keep you posted!

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