With the real-estate market in a "deathly" state, it may take years for some city neighborhoods and suburbs to recover. What protection do borrowers have against a future wave of mortgage fraud?

In the August issue of New Homes, columnist Don DeBat explains the steps that state and county governments have taken to protect home buyers from predatory home-loan schemes.

Under the Anti-Predatory Lending Database pilot program, borrowers applying for a mortgage on one- to four-unit, owner-occupied, residential property in Cook County will be assisted in understanding the terms and conditions of their loan.

“Every mortgage recorded on or after July 1, 2008, in Cook County must have either a Certificate of Mortgage Compliance or a Certificate of Mortgage Exemption attached to it,” said attorney Arden K. Miner, senior manager of underwriting and escrow for Attorney’s Title Guaranty Fund. “The mortgage will not be recordable without the certificate.”

The purpose of the program is to reduce predatory lending practices by assisting the borrower in understanding the terms and conditions of the loan for which he or she has applied. The law, which does not apply to loans on property outside of Cook County, does not prohibit any type of loan, such as adjustable-rate mortgages, or ARMs.

Read all of Don's column here, or pick up the August issue of New Homes at one of these locations next month.

In the July issue of New Homes (available now at these locations!), columnist Don DeBat surveys the summer house-hunting market.

The selection of new homes is great, DeBat writes, but the summer will also bring higher mortgage rates for luxury home buyers and those who continue to wait on the sidelines.

Experts say Freddie Mac and Fannie Mae’s reluctance to boost the jumbo-loan limit on mortgages they buy in Chicago to the $729,750 now allowed in other high-cost areas such as sections of California, Arizona, Colorado, Florida and the East Coast likely will have a slowing effect on the market for luxury homes.

Some luxury home buyers are side-stepping the low jumbo mortgage limit here by opting for a higher down payment and taking out two loans, one for $417,000 and a second for a line of floating credit for the balance.

“Mortgage rates jumped after a number of Federal Reserve Board officials expressed concern over a threat of inflation,” said Frank Nothaft, Freddie Mac vice president and chief economist. Some analysts believe the Fed will raise rates more aggressively over the year than previously thought, he said.

Read all of Don's column here.

As you read the sordid details of the mortgage fraud indictments announced today by the United States Attorney's office (PDF), you might wonder whether we have any law enforcement at the state or local level, and if not, why?

The Federal Bureau of Investigation (FBI) just released its 2007 Mortgage Fraud Report. Illinois maintained its ranking in the top 10 states for mortgage fraud, but Chicago failed to crack the top 10 3-digit ZIP markets.

Wait till next year?

Every so often I get a protective urge toward prospective home buyers. I almost always feel that urge when I see a rent-to-own offering.

Rent-to-own programs are usually pitched as a boon to the cash-starved home buyer.

My take: you'll generally find this kind of offering on overpriced properties in second- and third-tier neighborhoods. If you're a cash-starved would-be buyer, avoid rent-to-own programs unless you're savvy enough to understand all the details - all the details. Only a fool would enter into one without a good home inspector, a good appraiser, and a very experienced lawyer. And how can you afford that team if you're cash-starved?

The purported key to a rent-to-own program is that a portion of the rent you pay is credited toward your down payment. Why not simply rent or share a lower-priced apartment for a while and save the difference toward your down payment?

Over the past few months, tidibits have been accumulating about the fate of Rokas International and the developer's South Loop projects. Lawsuits, foreclosures and a potential immigration hangup have resulted to several moribund projects and a local development firm in disarray, according to David Roeder in today's Sun-Times.

"He's a very nice guy and doesn't come off as a crook, but his situation got much worse," said Patrick Fitzgerald, an architect who designed Augunas' Motor Row Condominium project that was started at 2300 S. Michigan. "Desperate people do desperate things."

Records show several mortgages and lines of credit are attached to Augunas' home in Winnetka. Calls to his home weren't answered, and Augunas has set his cell phone to block incoming calls.

His immigration status is unknown. In 2006, Augunas sued the Department of Homeland Security on behalf of himself and his family, saying it hadn't acted on their applications for permanent residency. The case was later settled.

YoChicago has kept tabs on Rokas International's South Loop projects, including Motor Row Condominiums at 2300 S Michigan Ave and 2100 (still a bare patch of ground) at 2100 S Indiana Ave.

Willard Court may be "architecturally bankrupt," in the words of one Yo reader, but it still offers a few interesting features here and there - like this wall safe built into each home (not the studios, though).

The development (949 N Willard Ct in River West) is sandwiched between the Kennedy Expressway and some railroad tracks, so it's not scoring points for the big 'L'. And the building's exterior is a tad, well, drab. In fact, the one thing Willard Court does have is photos. Of everything. Including the wall safe - and the basement storage (cage?) locker.

The project's been built for a couple years now, but at least four units are still available ($150s to $270s). Prices include deeded surface parking, and the location might qualify some buyers for the city's TaxSmart Mortgage Credit Certificate.

Why aren't more people taking the plunge on a new condominium or townhouse at the moment?

“They think that things may be worse than they are. They look at headlines instead of reading the details,” says Chad Baugh of Winthrop Properties.

Baugh and YoChicago.com’s Joe Zekas discussed the market for new homes during a recent tour of the Printers Corner sales center at 170 W Polk St. Watch the video above to hear more of their conversation, or click back to this recent Yo post to learn more about Printers Corner.

Like our recent Lennar post, this applies mainly to those of you looking for homes in the 'burbs. But hey, Oswego's not a bad little town, especially if you dig drag racing.

Pulte Homes is using the upcoming Leap Day as an excuse to offer deals and discounts on its inventory. Buyers who sign contracts between Feb. 28 and March 2 will have up to $6,500 of their closing costs waived and will not have to make payments for four months. Pulte is also offering a coupon for an additional $500 off through its Web site.

Of course, the only way buyers can take advantage of this deal is to participate in Pulte's rewards program and financing through the developer's mortgage company.

Pulte currently has homes for sale in Carpentersville, Elgin, Lake Zurich, Lindenhurst, Lockport, Oswego, Yorkville and Zion. Layouts range from two to four bedrooms and one to three baths, with prices from the $150s to the $420s.

A pair of articles in Crain's today paints a rather dreary - but not entirely unexpected - picture of the Chicago home market.

Home sales fell 28 percent in the fourth quarter of 2007; at the same time, foreclosures were up 50 percent in the Windy City from 2006.

The foreclosures piece points out another interesting number: 1.64 percent of all homes in Chicago were in some stage of foreclosure, according to the data from RealtyTrac, which put Chicago at number 30 out of 100 large metros surveyed.