WBEZ | housing crisis http://www.wbez.org/tags/housing-crisis Latest from WBEZ Chicago Public Radio en Illinois to get about $1 billion in national mortgage settlement http://www.wbez.org/story/illinois-get-about-1b-national-mortgage-settlement-96262 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2012-February/2012-02-10/foreclosed house_Ashley Gross.jpg" alt="" /><p><p style="text-align: center;"><img alt="" class="caption" src="http://llnw.wbez.org/story/insert-image/2012-February/2012-02-10/foreclosed house_Ashley Gross.jpg" style="width: 630px; height: 354px;" title="(WBEZ/Ashley Gross)"></p><p>The $25 billion mortgage settlement with big banks means about 1$ billion in relief to Illinois homeowners.</p><p>People who owe more than their homes are worth and have fallen behind on payments may qualify for loan reductions, while other people who are underwater but current on their loans may be able to refinance. And people who lost their homes to foreclosure may be able to get cash payments.</p><p>Illinois attorney general Lisa Madigan helped negotiate the deal and spoke at a Washington, D.C., press conference announcing it.</p><p><img alt="" class="caption" src="http://llnw.wbez.org/story/insert-image/2012-February/2012-02-10/foreclosures_ashley gross.jpg" style="width: 281px; height: 500px; float: left; margin: 5px;" title="The view inside a vacant, ransacked building in the West Humboldt Park neighborhood. (WBEZ/Ashley Gross)">"Today’s settlement should serve as a warning to financial institutions - there are consequences for engaging in practices that jeopardize the stability of our communities and our economy," Madigan said.</p><p>But whether this deal means a major boost for the housing market is still a question.</p><p>Amir Sufi is a finance professor at the University of Chicago Booth School of Business.</p><p>"It’s marginally going to have a positive impact," Sufi said. "I just don’t think it’s going to attack the really huge problem in a really major way."</p><p>That really huge problem, Sufi says, is the large number of homeowners who owe more than their homes are worth. The housing data firm CoreLogic says the total amount of negative equity in the U.S. as of last fall was $700 billion.</p><p>Illinois homeowners who are underwater on their loans say they’re hopeful the new mortgage settlement will help them. But many also say they’re beaten down after years of battling with banks.</p><p>Aimee Gendusa-English owns a home near Midway airport that’s now worth at least $50,000 less than she owes on the mortgage. She says she’s been trying to refinance her loan under a federal program for underwater borrowers. But she says her servicer keeps misunderstanding and bungling her request.</p><p>"I’m really glad to hear that anyone is going after the banks for any aspect of the wrongdoing that they engaged in," Gendusa-English said. "But as a consumer, it fills me with frustration because I feel like all these agencies are doing stuff but none of it helps me. I’m always the one who slips through the cracks."</p><p>Gendusa-English may not even qualify to refinance under the new agreement because she says her loan is held by Freddie Mac. Freddie Mac and Fannie Mae refinancings are covered under a separate federal program.</p></p> Fri, 10 Feb 2012 04:51:00 -0600 http://www.wbez.org/story/illinois-get-about-1b-national-mortgage-settlement-96262 Venture: Flipping houses in a post-bubble world http://www.wbez.org/story/venture-flipping-houses-post-bubble-world-94309 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-November/2011-11-29/susie&#039;s house_demien.jpg" alt="" /><p><p>The real estate market is moribund. Prices have plummeted. So who knew that people were still making big bucks from flipping properties?</p><p>Turns out, speculators have found new ways to profit amid the wreckage of the housing boom. And some real estate agents are navigating this post-bubble world for large profits - in some cases, at the expense of taxpayers and end buyers.</p><p>We stumbled into this world of post-bubble flipping by accident. <a href="http://www.wbez.org/story/venture-buyers-market-buyer-friendly-89183">WBEZ’s Susie An reported in July</a> on her own experience as a first-time homebuyer purchasing a house. She found herself as the buyer on the tail end of one of these flips.</p><p>In March, An and her husband saw a 100-year-old, Victorian-style house in Chicago’s Avondale neighborhood and right away realized it was a lot better than anything else they’d seen.</p><p>“When we walked in, I think both my husband and I just had that feeling, that tingle inside that yes, we could live here,” An said.</p><p>The house was listed for $240,000, but they put in an offer of $250,000. An says it was listed as a pre-foreclosure. Their real estate agent told them that meant it was a short sale.</p><p>A short sale occurs when the value of a home has dropped below the value of the mortgage, and the bank that holds the mortgage agrees to take a loss and let the property be sold.</p><p>Almost a quarter of U.S. homeowners are underwater, and that has led to a wave of short sales – the housing data firm CoreLogic says the number of short sales has tripled in the last two years.</p><p>After they put in their offer, An says she and her husband didn’t hear anything for a month. They started looking at other places, but then they heard back from their real estate agent saying that now an investor was buying the property, and the investor wanted to quickly resell it.</p><p>An says they were told if they were still interested, that they should put in their best and highest offer and to do so quickly, because there was competition for the property and the investor wanted to get it done fast.</p><p>“A lot of rushing, a lot of rushing, and so we went with $285,000,” An said.</p><p>Their offer was accepted. But An still didn’t know what the investor had paid for the property – it hadn’t yet been posted on the Cook County Recorder of Deeds web site.</p><p>When she and her husband got to the closing table in late June, they found out in passing from their attorney that the investor had purchased the house for $160,000 in cash. She says at first she didn’t trust her ears – she had the lawyer repeat it and she wrote the amount down.</p><p>“We were shocked,” An said.</p><p><strong>Housing flips redux</strong></p><p>Why would the bank have accepted an offer that was $90,000 less than her and her husband’s offer of $250,000, even if the lower offer was in cash? Granted, real estate agents say that cash deals are often preferred these days because they can be closed quickly. But still, An says that didn’t seem to justify accepting $90,000 less.</p><p>And here’s another puzzle – An discovered that the investor she bought the house from, Marcie Schmidt, is a Realtor who works for Exit Strategy Realty, the company that had listed the house.</p><p>That raised all sorts of questions.</p><p>Because the Realtor and investor work in the same office, it seems like they can get first crack at these properties. And then the other question is: Who is the Realtor really working for if the investor is a coworker? Is the Realtor trying to get the best deal for the homeowner or the investor?&nbsp;</p><p>Their interests may not be aligned. But state regulators say there’s nothing that bars Realtors from acting as investors.</p><p>After An’s story ran, we got comments from listeners saying the circumstances sounded fishy. We decided it merited a follow-up story. But we emphasize that we didn’t choose to continue the story out of any desire to settle a personal gripe of An’s on the air. We felt that it was newsworthy and wanted to understand how these transactions work.&nbsp;</p><p><strong>The mystery deepens</strong></p><p>And we soon learned that this wasn’t an isolated transaction. CoreLogic tracks ‘suspicious’ short sales, which it defines as short sales that may have caused unnecessary losses to the lender, because the properties were resold quickly for profit, without allowing enough time to do much rehab to justify a higher price. CoreLogic forecasts that ‘suspicious’ short sales may cost banks as much as $375 million this year.</p><p>“There have been a couple of industry surveys of fraud, trying to identify fraud in short sales, and this practice of flipping houses is the practice identified as being most harmful to banks and to the ultimate investors in mortgage loans,” said Diane Thompson, an attorney with the National Consumer Law Center.</p><p>I contacted Schmidt as well as the Realtor who listed the property. Neither of them responded to my emails or phone calls. I also contacted the original homeowner, who declined to comment.</p><p>I called Citibank, which held the original $370,000 mortgage on the property, to ask why the bank would accept a much lower cash offer than a financed offer.</p><p>The spokesman, Mark Rodgers, told me that the bank wasn’t aware of a higher offer and their policy is not to accept a cash offer instead of a higher financed offer. So that deepened the mystery – why was the bank not told of An’s offer?</p><p>While trying to understand these transactions, I discovered someone else with Exit Strategy Realty who has done quite a few more of these deals.</p><p>His name is Mike Cuevas, and he calls himself the <a href="http://www.superagentsummit.com/">“top short sale agent in the U.S.”</a> He’s a young guy – around 30 – who says he decided early on in the housing crisis to concentrate on short sales. Now he offers training workshops to Realtors all over the country on how to do short sales.</p><p>Cuevas presents himself as a white knight, helping people avoid foreclosure by doing short sales. Short sales are less damaging to people’s credit than foreclosures. He says in his online bio that he’s closed almost 1,000 short sales.</p><p><img alt="" class="caption" src="http://llnw.wbez.org/story/insert-image/2011-November/2011-11-22/10 E Ontario pic 1 smaller.jpg" style="width: 335px; height: 445px; margin: 8px; float: right;" title="Mike Cuevas bought and quickly resold two condos in this building at 10 E. Ontario for a total gross profit of $92,500 (WBEZ/Ashley Gross)">“You know how many people send us cookies, hugs, cupcakes? People call us crying,” Cuevas said in an interview. “People say you saved my financial future and my kids are now going to be able to go to college because I can now get the credit to give them a student loan.”</p><p>What Cuevas doesn’t talk much about in any of his webinars I watched is his own role as an investor buying and quickly reselling short sales.</p><p>According to records on the Cook County Recorder of Deeds web site, Cuevas has bought and quickly resold at least 13 short sales, for combined gross profits of more than $800,000. He didn’t hold them very long. In many cases, the short sale and the subsequent sale were recorded on the same day on the Recorder of Deeds web site.</p><p>For example, he purchased a condo at 10 E. Ontario St. in downtown Chicago for $118,500 and then resold it for $185,000. Both transactions were recorded on the same day – Nov. 8, 2010.</p><p>He bought a home in north suburban Park Ridge, Ill., for $466,000 and then resold it for $543,000. Both transactions were recorded on Aug. 17, 2010.</p><p>Maybe about now you’re saying, so what? So he profited from real estate – isn’t that what investors try to do? That’s what Cuevas says.</p><p>“That’s what capitalism is,” Cuevas said. “That’s what America is.”</p><p>But this is a story of winners and losers. In a short sale, someone has to eat the loss. At first glance, it looks like banks are losing out. Naturally, in these days of joblessness, foreclosure and Occupy Wall Street protests, there’s not a whole lot of sympathy for banks.</p><p>But really, the losers are the investors who hold the mortgages – and here’s where this pertains to all of us. In many cases, taxpayers are the ones losing out when a short sale sells for less than it could fetch on the open market.</p><p>Fannie Mae and Freddie Mac, which are financed by taxpayers, own or guarantee about half of all home mortgages in the U.S. So when they take an unnecessary loss on a short sale, taxpayers are the ones getting hurt.</p><p>Cuevas says he’s helping the market by getting these properties sold as short sales, preventing them from going all the way into foreclosure, which he says would further drag down home prices. He says that as an investor, he’s also lost money on short sale transactions.</p><p><img alt="" class="caption" src="http://llnw.wbez.org/story/insert-image/2011-November/2011-11-22/3221 N Racine pic 2 smaller.jpg" style="width: 333px; height: 249px; margin: 8px; float: left;" title="Cuevas bought and quickly resold this building at 3221 N. Racine for a gross profit of $125,000 last year (WBEZ/Ashley Gross)">And he vehemently defends the role of investors in buying and reselling short sales. He says cash investors provide a service to the end buyer that justifies a premium.</p><p>Short sales are notorious for taking a long time to close, because banks are loath to take a loss on a property and also because there are often second mortgages or homeowner lines of credit that need to be settled, and that requires negotiating with multiple banks.</p><p>Cuevas says cash investors can better handle these negotiations, in some cases by paying additional cash to a second lienholder as a way to get them to agree to the short sale. Investors also settle other liens, such as overdue water bills or homeowner association dues. Because of all these extra expenses, Cuevas says his net profit is often a lot less than his gross profit, but he declined to give any specifics.</p><p>He says settling all those liens simplifies the process for the end buyer, who can then quickly buy a home with a clear title, instead of having to deal with the short sale rigmarole.</p><p>But in An’s case, Schmidt’s gross profit totaled $125,000, and she specifically sold the property “as-is,” with no rehab or renovation. She only held the property for a few weeks. So are deals with such a huge spread legitimate?</p><p>If short sale flips are done the wrong way, they can get a real estate agent and an investor in legal hot water. In Connecticut, a real estate agent and an investor, who was also a real estate agent, were convicted of bank fraud last year for a short sale flip. They put in a low offer to the bank that held the mortgage, while at the same time concealing that there was a higher offer for the property.</p><p>The bank approved the short sale at the low amount, and then the investor turned around and resold it for the higher amount. He shared the profits with the real estate agent. Both pleaded guilty to one count of bank fraud.</p><p>Cuevas says what he does is completely different from what happened in Connecticut. &nbsp;The way he does these deals legally, he says, is that he uses an option contract that he signs with the homeowner.&nbsp; Then, he says he submits his offer to the bank to get the short sale process rolling.</p><p>He says the option contract gives him the right to list the property as if he already owns it, so he can line up a buyer for the subsequent sale. He says he has no obligation to give those subsequent offers to the bank as long as his offer was the first one in. Cuevas says what’s most important is that he tells everyone – the homeowner, the bank, the end buyer – that he’s an investor seeking to profit.</p><p><img alt="" class="caption" src="http://llnw.wbez.org/story/insert-image/2011-November/2011-11-22/1410 W Ohio pic 3 smaller.jpg" style="width: 350px; height: 262px; margin: 8px; float: right;" title="Cuevas bought this property for $345,000 and resold it for $390,000. Both transactions were recorded within a week of each other. (WBEZ/Ashley Gross)">“One, it’s plain out in English disclosed on the contract. You must disclose, disclose, disclose to stay within legalities,” Cuevas said. “Two, you record your notice of option, so it’s public record. Okay, there’s nothing hiding here, no one’s trying to deceive anybody. It’s right there. Third, it should also be disclosed on the listing agreements.”</p><p>He declined to show me one of the option contracts.</p><p>Lawyers I spoke with said without seeing the documents, they couldn’t say for sure whether the way he’s done these short sales is legal. But they said as long as he discloses to everyone that he is an investor, and as long as he puts his offer in first, before any other offers are on the table, then he’s probably done it correctly.</p><p>Cuevas says he’s done everything by the book.</p><p>“Not only by the book, but beyond and above the book,” he said. “I’m not hiding anything. There’s nothing funny going on.”</p><p>But even if option contracts are a legal maneuver to flip short sales, that doesn’t mean banks and mortgage holders like the use of such contracts. Freddie Mac, for example, warns banks that an option contract in a short sale is a red flag.</p><p>Kathleen Cooke, one of Freddie Mac’s fraud investigators, says the problem with many investors who use option contracts is that they don’t disclose what the resale price is. She says it’s not enough disclosure to just say you’re an investor seeking to profit.</p><p>Cooke stresses that she isn't making a legal pronouncement, but she says the use of option contracts is something the company doesn’t like because it costs them money.</p><p>“Freddie Mac considers it to be a deceptive business practice that deliberately omits crucial data to the short sale lender,” Cooke said. “Omission of higher offers causes short sale lenders to approve transactions without all the facts and we take a higher loss than we should.”</p><p>So last year, Freddie Mac started requiring banks servicing its loans to include forms that everyone involved with short sales, including Realtors, has to sign. They must attest that there are no hidden deals and that the sale is an arm’s length transaction. Many banks have now followed suit. Some require that the buyer hold the property for 30 days or even 90 days before reselling it.</p><p>“The banks got wise, got more restrictive with their language and cut this off,” said Greg Braun, a real estate attorney in Chicago.</p><p>Because of that, Cuevas says he hasn’t done any deals lately. The last one I could find on the Cook County Recorder of Deeds site was from March.</p><p>“The spread deals are dead,” Cuevas said. “You can’t buy and sell property for short-term investors. Any Realtors today who want to work and stay out of trouble, if they’re going to work with an investor, they have to sell to an investor who’s going to buy it, close on it and be ready to hold it for 90 days.”</p><p>There's another potential loser when a short sale yields less than it could on the open market – and that's the original homeowner.</p><p>A homeowner doing a short sale doesn’t make any money off the deal because he or she owes more than the house is worth, so all the money goes to the bank. So the homeowner may think that it doesn’t matter what the home sells for.</p><p>But, in Illinois, banks have the right to go after the homeowner for the difference between what the house sells for and the mortgage amount. That’s called the deficiency.</p><p>And Thompson of the National Consumer Law Center says banks are increasingly pursuing homeowners for deficiencies after a short sale.</p><p>“It’s become a big problem for homeowners because they agree to enter into a short sale because they think it means they’ll be able to get out from under the debt and then they can get a debt collector banging on their door six months later,” Thompson said.</p><p>Cuevas says he never steps in as an investor unless the lenders waive all of the homeowner’s deficiencies.</p><p>“Any investor that we’ve ever worked with, our rules are you can buy the property as long as you don’t profit at the expense of the homeowner,” Cuevas said. “It’s that plain and simple.”</p><p>The homeowners I reached who sold their homes to Cuevas backed that up. They said their deficiencies were forgiven by the banks.</p><p>But Ralph Schumann, an attorney who heads the Illinois Real Estate Lawyers Association, says people have to be very careful about promises from Realtors and investors that their deficiencies will be waived.</p><p>“I have seen so much fraud in this area, and I guess this is the bottom line, show me the documentation that says the deficiency is waived,” Schumann said. “Let me vet it. Let me make sure it’s really enforceable and valid and won’t be an issue down the line, and then I might be willing to tell my client, ‘Oh yeah, go ahead and do it under the circumstances.’”</p><p>As for Susie An, she and her husband are settling into their house. They’ve repainted the walls and ripped out the old carpeting. They’re excited to see the magnolia tree in their backyard bloom next spring.</p><p>An says no one twisted her arm to make her put in the higher offer, but she says it still rankles her knowing they probably could have bought the place for less. Still, she says it’s not her own situation that bugs her the most.</p><p>“I think what frustrates me the most is the fact that we have this type of market now, where before the bubble burst, people were taking advantage of how the market was set up, and after the market crashed, people are still finding new ways to take advantage,” An said.</p><p>But at least for now, this particular profitable niche in real estate has been closed off.</p><p>Banks – and the investors who hold the mortgages – are no longer willing to leave money on the table.</p></p> Tue, 29 Nov 2011 06:01:00 -0600 http://www.wbez.org/story/venture-flipping-houses-post-bubble-world-94309 Recession worsens shortage of affordable rental housing http://www.wbez.org/story/recession-worsens-shortage-affordable-rental-housing-94045 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-November/2011-11-14/3168468197_0c7c1d1344_z.jpg" alt="" /><p><p><em>Updated on 11/15/11 at 11:20 a.m.</em></p><p><a href="https://ihs.depaul.edu/reports/CookCountyHousing2011.pdf">A new study</a> shows that Cook County’s persistent shortage of affordable rental housing has gotten even worse in recent years.</p><p>For years, the constraint on affordable housing came from the overheated real estate market. Developers converted apartments to condos, pushing out tenants. But then the recession hit, and people needed to downsize.</p><p>Geoff Smith is executive director of<a href="https://ihs.depaul.edu/ihs/?q=node/3"> DePaul University’s Institute for Housing Studies,</a> which published the report.</p><p>"More people essentially were making less money and needed to access affordable housing," Smith said.</p><p>He says the shortage of affordable rental housing now stands at 180,000 units in Cook County.</p><p>One problem, Smith says, is that banks are more cautious about making loans to people buying smaller apartment buildings – anything with fewer than 100 units.</p><p>"Those make up much of the affordable housing stock in Chicago and Cook County, but they tend to be the types of buildings that are more challenging to finance," Smith said.</p><p>According to the report, more than 97,000 units in multifamily buildings in Cook County have been part of a foreclosure auction.</p><p>The shortage of affordable rental properties is having the greatest impact on less affluent renters, many of whom are forced to pay more than recommended 30 percent of their monthly income for rent.&nbsp;</p><p>According to the study, households needed to make approximately $40,000 per year to afford the county’s median priced two-bedroom apartment, which was $1000 per month in 2010.&nbsp;</p><p>While rents have decreased slightly in Chicago and Cook County since 2008, they are still up overall during the last half of the previous decade.</p><p>The institute predicts the shortage will increase to 233,000 affordable rental units by the end of this decade.</p></p> Tue, 15 Nov 2011 06:01:00 -0600 http://www.wbez.org/story/recession-worsens-shortage-affordable-rental-housing-94045 Mortgage fraud looms large at AGs meeting http://www.wbez.org/story/mortgage-fraud-looms-large-ags-meeting-88167 <img typeof="foaf:Image" src="http://llnw.wbez.org/story/photo/2011-June/2011-06-21/Joshua Lott Getty Images.JPG" alt="" /><p><p>The role of fraud in the housing crisis is getting attention this week at a Chicago gathering of attorneys general from states across the country.</p><p>Since last year, the AGs have been looking into procedures of the nation’s largest mortgage servicers, led by Bank of America, Wells Fargo and JPMorgan Chase. Now the AGs and federal officials are negotiating with the banks to set lending and foreclosure standards.</p><p>A settlement the officials proposed in March would have the banks fund loan modifications.</p><p>“Without that kind of mandatory principal writedown, neither the housing market nor the economy as a whole can recover from what the big banks have put us into in the first place,” says Rev. Robert Bushey, pastor of Central Christian Church in the Kankakee County town of Bourbonnais.</p><p>Bushey helps lead Illinois People’s Action, a faith-based group that demonstrated Tuesday afternoon outside a downtown hotel where the AGs are meeting.</p><p>The activists seem to have an ally in the meeting’s host, Illinois Attorney General Lisa Madigan, a Democrat. “A settlement should require banks to write down the principal on mortgages so that families can afford their payments and have a fighting chance to save their homes,” Madigan's office said in a statement to WBEZ.</p><p>But some Republican AGs say mortgage writedowns could encourage too many borrowers to halt their payments — a threat to the industry. Bloomberg reported Tuesday that at least eight attorneys general have publicly opposed the writedowns as part of any deal.</p><p>A new report, meanwhile, suggests that the housing crisis is reaching far into the middle class. Chicago-based National People’s Action reported that prime-interest-rate mortgages have accounted for 48 percent of Cook County foreclosures since January of last year.</p><p>The AGs will wrap up their three-day meeting Wednesday.</p></p> Wed, 22 Jun 2011 13:37:00 -0500 http://www.wbez.org/story/mortgage-fraud-looms-large-ags-meeting-88167 Banks walk away from some foreclosures in Chicago http://www.wbez.org/story/abandoned/banks-walk-away-some-foreclosures-chicago <p><p>A new study says banks are choosing to walk away instead of completing some foreclosures, leaving buildings abandoned. <br /><br />The housing research group Woodstock Institute says it identified about 2,000 of these vacant homes in Chicago. Here&rsquo;s what happens &ndash; a homeowner stops paying, the bank servicing the loan files a foreclosure, the homeowner moves out, but then the bank decides it doesn&rsquo;t make financial sense to actually take ownership. Then the house sits empty. Geoff Smith of Woodstock Institute co-wrote the report. <br /><br />&quot;While that&rsquo;s all happening, the property takes away from the quality of life in the surrounding community, costs the city substantially and the servicer essentially walks away without any type of accountability,&quot; Smith said.<br /><br />Smith says it costs the city money to take legal possession, secure the house and then in many cases, demolish it. He says that could total about $36 million just for the vacant properties his institute identified. Smith says most of them are located in African-American communities already hard hit by the housing crisis. <br />&nbsp;</p></p> Thu, 13 Jan 2011 19:40:00 -0600 http://www.wbez.org/story/abandoned/banks-walk-away-some-foreclosures-chicago Owners fight the condo blues with go-go dance and grit http://www.wbez.org/story/code-violations/owners-fight-condo-blues-go-go-dance-and-laughs <img typeof="foaf:Image" src="http://llnw.wbez.org/IMG_3274.JPG" alt="" /><p><p>There&rsquo;s not a whole lot to laugh about when it comes to the housing crisis.</p><p>But tonight, neighbors in one condo association aim to find humor in their misery &ndash; and raise some cash to help them out of their financial hole at the same time.</p><p>Say you live in a condo building with a third of the units unfinished.</p><p>The developer&rsquo;s bankrupt.</p><p>And the city has found code violations the developer left behind&hellip;.that may wind up costing you and your neighbors tens of thousands of dollars.&nbsp;</p><p>This might not be the obvious solution.&nbsp;</p><p>GO-GO DANCE REHEARSAL: Twist, twist, 1, 2, 3, twist, twist, 1, 2, 3 and shimmy&nbsp;</p><p>A go-go dance performance.&nbsp;</p><p>That&rsquo;s right &ndash; girls in retro bathing suits and sunglasses &ndash; coming to the rescue of a condo building on the brink of failure.</p><p>REHEARSAL: Prance, prance, prance, prance.</p><p>The nexus between the go-go group and the condo building is Kaara Kallen.</p><p>She&rsquo;s president of her 12-unit condo building in Chicago&rsquo;s Irving Park neighborhood.</p><p>She also shakes and shimmies on stage as Keeks La Reine in the go-go group the Revelettes.</p><p>She came up with the idea for the fundraiser with a friend from the comedy group the Neo Futurists.</p><p>The Neo Futurists will perform by staging a version of the movie My Little Pony as part of their Bad Movie Film Fest.</p><p>Kallen says this festival of goofiness is a way to for her and her neighbors to take their minds off their worries and &ndash; maybe raise a little dough.&nbsp;</p><p>KALLEN: It&rsquo;s something to do besides freak out.</p><p>Really, there is quite a bit to freak out about.</p><p>Their developer stopped working on four garden units as the housing market tanked and then turned them over to a bank.</p><p>Then the city issued stop work orders and found numerous code violations.</p><p>A judge has now ruled that Kallen&rsquo;s condo association is on the hook to fix the violations in the common areas.</p><p>She says that plus legal fees will total at least 75 grand.</p><p>They can&rsquo;t get a loan or sell their units.</p><p>So now the fear in her building is that people will start walking away.</p><p>KALLEN: We understood we were all in the same boat, we&rsquo;re all in a leaky boat, we&rsquo;re all sitting on a leak, and if one person jumps out, that leaks goes up, maybe we can cover it, but if two people jump out, the boat&rsquo;s going to sink.</p><p>And they&rsquo;re not the only ones.</p><p>Distressed condo buildings in Chicago and the suburbs number in the hundreds &ndash; and that&rsquo;s a lowball estimate.</p><p>Evan McKenzie of the University of Illinois Chicago researches homeowner associations.</p><p>He says condos are an experiment in communal living that have only been around for about 50 years.</p><p>He says that experiment is now failing as condo owners grapple with foreclosures and money shortfalls.</p><p>MCKENZIE: They're in a desperate situation and are really suffering because there's no mechanism in place for solving their problems and they're thrown onto their own resources.</p><p>He says anything that can raise morale, like a silly fundraiser, is a good idea as a way to keep struggling condos together.</p><p>Right now, Kallen and her neighbors have tasks that are a bit more fun than getting estimates from contractors.</p><p>Like planning what to auction off at their benefit.</p><p>Everything from salsa and yoga class certificates to stuff donated by the adult store Early to Bed.</p><p>KALLEN: So we have a box of sexy toys, also we can put another burlesque certificate, so we can make a &ldquo;naughty basket.&rdquo;</p><p>Kallen says she knows this fundraiser likely won&rsquo;t put much of a dent in their bills.</p><p>But she&rsquo;s hopeful it will help people in similar situations feel more connected.</p><p>KALLEN: I think this is happening to tons of people throughout Chicago and throughout the country but it&rsquo;s terribly isolating, it doesn&rsquo;t feel like it&rsquo;s happening to tons of people, it feels like it&rsquo;s happening to you, and you&rsquo;re alone.</p><p>But she&rsquo;s one of those people who turns to gallows humor at a time like this.</p><p>Even last year, before she knew how badly off her building was, she wrote a little parody of American Pie.</p><p>KALLEN: Oh I wanted to be real grownup, so I put my money where I couldn&rsquo;t mess up. But it wasn&rsquo;t to be, oh where&rsquo;s my equity? The developer&rsquo;s fled in his pickup truck&hellip;</p><p>She's a reluctant singer, so she got her neighbor to record a studio version with someone else.</p><p>And tonight, Kallen&rsquo;s hoping to give people another thing to laugh about &ndash; and put her own troubles aside, at least for a while.</p><p><em><strong>The <a href="http://www.facebook.com/event.php?eid=139976682717377&amp;index=1">fundraiser to benefit the West Byron Association</a> takes place Thursday, Nov. 11, at 7 p.m. at the Neo Futurists theater in Chicago's Andersonville neighborhood.</strong></em></p></p> Thu, 11 Nov 2010 02:47:00 -0600 http://www.wbez.org/story/code-violations/owners-fight-condo-blues-go-go-dance-and-laughs