TALLAHASSEE, Fla. (AP) – April 15, 2009 – Gov. Charlie Crist and the Florida Cabinet received a bit of encouraging news Tuesday about the state’s tenuous hurricane catastrophe fund.The head of the agency responsible for Florida’s investments told them a loosening credit market provides the ability to bond an additional $5 billion, if needed.“That’s good news, very good news,” said Chief Financial Officer Alex Sink. “Three or four months ago they thought we’d maybe be able to get $3 billion worth of bonds.”Ash Williams, executive director of the State Board of Administration, said Florida could financially withstand a severe storm like Hurricane Andrew in 1992, which would cost about $22 billion today.Crist heard the news by phone after his plane was delayed in Tampa by a tornado warning.The Florida Hurricane Catastrophe Fund was established after Andrew to back up insurers in the event of a particularly devastating hurricane, or a quick succession of smaller ones.It now has an exposure of more than $28 billion with less than $8 billion on hand to pay claims. The six-month 2009 hurricane season starts in less than seven weeks.“We’re almost running out of time,” Sink said.Sam Miller of the Florida Insurance Council cautioned state officials to continue looking for other options to ensure the “cat” fund can meet its financial obligations.“These include the Legislature’s initiative to reduce cat fund coverage and allow insurers to buy private reinsurance,” said Miller. “They also include Insurance Commissioner Kevin McCarty’s continued efforts to negotiate a backup with the U.S. Treasury Department.”But Williams, who has traveled to Washington with McCarty, said Tuesday that avenue looks closed without legislative intervention. Both men plan to return to the nation’s capital, where they will visit with Federal Reserve officials about the possibility of some type of guarantee to ease credit pressures.U.S. Sen. Bill Nelson said last week he is considering legislation to provide some type of federal backup for the state.Copyright © 2009 The Associated Press, Brent Kallestad, Associated Press Writer.
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TALLAHASSEE, Fla. – April 15, 2009 – Ten Realtors from across Florida met with Gov. Charlie Crist this morning to discuss increased home sales and other positive trends in their markets, as well as offer insight into some current issues facing the real estate industry. It’s part of this year’s Great American Realtor Days, April 14-15, when about 1,000 Realtors from throughout the state join forces at the state capital to meet with their legislators and discuss concerns affecting all Florida residents.Representing markets from Miami to Jacksonville and all points in between, Realtors reported an upswing in existing home sales in the past three to six months, when comparing year-to-year activity and also month-to-month sales figures. John Sebree, vice president of public policy for the Florida Association of Realtors® (FAR), kicked off the Real Estate Roundtable meeting with Gov. Crist by noting that February’s statewide existing home sales rose 20 percent over the same period last year, according to FAR data. He also reported that February’s home sales were about 17 percent higher than January’s statewide sales activity.Realtors also told the governor about other positive indicators such as: mortgage interest rates under 5 percent; reduced housing inventory levels as buyers take advantage of current, more affordable housing opportunities; and encouraging market reaction to the federal economic stimulus package, especially the new $8,000 first-time homebuyer tax credit.Upon hearing these reports from around the state, Gov. Crist said, “It doesn’t get much better than this. [Housing] supply and demand is going to come into balance here. Two to three years from now, people will be saying, ‘Back in April 2009 I could have gotten that home for so many dollars’ – so you don’t want to wait.“Prices have gotten as low as they can. Now is the time to buy, while the deals still exist,” the governor said.Discussing some of the challenges in today’s market, many Realtors pointed to difficulties with so-called “short sales,” where the bank or lender agrees to accept less money on a home sale than the seller owes on the mortgage. They said that short sales are problematic not only because of how long it actually takes to finalize the sale, but also because of the inconsistencies in information and documents required by lenders. Streamlining the short-sale process and providing consistency in required documentation among the lenders would boost the recovery of Florida’s real estate market.Solutions to ease lenders’ restrictions on the state’s condo market are also needed, said Edgewater Realtor Robert Clinton. “Not only is the prospective condo buyer having to be approved for a mortgage, but the condo owners association itself has to be approved and qualified, which is causing problems,” he said.Largo Realtor Alan Riley told Gov. Crist that 50 percent of buyers involved in recent home sales in the Tampa Bay area paid cash for their purchases, a strong indicator that investors have returned to the housing market.“Savvy investors have returned to our market as well,” added Eric Sain, a West Palm Beach Realtor. “But we’re also seeing a lot of young families buying a home to settle down and establish roots in the community. That’s a sign that people aren’t leaving the area, aren’t leaving Florida.”Gov. Crist agreed, saying, “Of course they are [establishing roots] – it’s Florida. Why would they go anywhere else?”Not only is it a great time to buy a home in Florida, it’s also a great time for businesses to move to the Sunshine State, noted Suzanne Sherer, a Fort Myers Realtor. Commercial and business properties are readily available in a range of price options, she said, providing prime opportunities for entrepreneurs. She asked the governor and state leaders to take steps to encourage the relocation of businesses and industries to Florida.At noon today on the steps of the old Capitol, Gov. Crist addressed the crowd of nearly 1,000 Realtors participating in Great American Realtor Days, applauding their perseverance and dedication to their profession despite challenges posed by the economy and the marketplace. Amid reports of increased home sales and other positive signs, the governor said that the “changing landscape” for Florida’s real estate markets is “nothing short of remarkable.”Other participants in Gov. Crist’s Real Estate Roundtable included: Jacksonville Realtor Millie Kanyar; Fort Lauderdale Realtor Jesse Acevedo; Miami Realtor Carlos Cruz; Port St. Lucie Realtor Scott Wingfield; Panama City Realtor Katie Patronis; and Orlando Realtor Les Simmonds.© 2009 FLORIDA ASSOCIATION OF REALTORS
The $8,000 first-time home buyer mortgage tax credit – part of the Recovery and Reinvestment Act of 2009 – doesn’t help people who don’t have money for a downpayment and closing costs. But some states, including Florida, want to offer the $8,000 loan to home buyers before they close on the condition that they repay the loan once they receive their federal tax credit. The idea has been adopted in Missouri, which advances the money to those who take out first mortgages offered through the state’s housing finance authority. The New York State Builders Association is lobbying for a similar strategy. “A lot of states are trying to get through the technical aspects of this,” says Gregory Brown, an assistant vice president for government affairs at the National Association of Home Builders. “I feel very confident they’ll find a way to make it work.”Source: The New York Times, Bob Tedeschi; HousingWire.com, Paul Jackson © Copyright 2009 INFORMATION, INC. Bethesda, MD
OCALA, Fla. – April 15, 2009 – John Hunt is seeing a “trickle” of an increase in the number of people coming to his Ocala bank and asking for home mortgages.And while a trickle doesn’t sound like much, during a time of the worst economic drought in more than half a century, a trickle could be a lifeline this spring to the county’s floundering real estate market.“I think this increase is first-time home buyers seeing bargains and low mortgage rates and not much fear of being laid off and they’re pulling the trigger... and buying,” said Hunt, president of First Avenue National Bank.What they’re mostly buying are homes in the $90,000 to $125,000 range, he said.That trickle locally also was being reflected in a similar nationwide increase in mortgage requests last week, as demand for home loans jumped, according to data from the Mortgage Bankers Association (MBA) released Wednesday.MBA is a trade organization that tracks and analyzes the mortgage industry.MBA reported that its seasonally adjusted index of mortgage applications increased 4.7 percent. The applications include both home purchase loans and refinance loans for the week ending April 3, despite a slight increase in mortgage rates.Bert Meadows, president of the Marion County Association of Realtors, said he’s also seen a modest increase in sales in the Ocala area.“We’re beginning to see more people. The phone is ringing more,” he said.“It’s not been back to normal, but at least I’ve been busy … and all the [Realtors] in South Florida I’ve talked to were getting busy again.”The most recent home sales information for Ocala and Florida from the Florida Association of Realtors bears Meadows out.February home sales in Ocala through registered Realtors was 166 units, up nearly 30 percent from the month before, when sales were stalled at 128 units.The sales data also showed that home prices were dropping, which encouraged buyers to enter the market.Median home prices in Ocala dropped from $120,400 in Dec. 2008 to $109,600 in February of this year.Florida saw similar home sales data in February.Florida’s existing home sales in February increased 20 percent, with a total of 9,858 homes sold compared to 8,181 sold the same month a year before, making it the sixth consecutive month that sales increased, according to the Florida Association of Realtors.The increase in home sales locally and the uptick in mortgage applications follows the Federal Reserve announcement last month that it would buy up to $1.2 trillion in mortgage-backed securities, hoping to push down mortgage rates.Overall mortgage applications last week were up 72.4 percent from a year ago.Florida Association of Realtors spokeswoman Marla Martin said potential buyers should decide for themselves whether they should enter the market now, “but it can be a great time to buy in Florida. It can be a perfect opportunity for some buyers.”Copyright © 2009 Ocala Star-Banner, Fla., Fred Hiers. Distributed by McClatchy-Tribune Information Services.
WASHINGTON – April 14, 2009 – Anxious to meet the bank’s demands for quick action, Andrew Garcia and his fiancée, BethAnne Hoffmann, rushed to find financing to buy a foreclosed-on house in a lovely tree-lined Baltimore neighborhood.That was in January.A month later, the bank that’s selling the house broke its own closing deadline. The couple has been in limbo since. In frustration, they turned to their congressman’s office for help. Only then did they receive an apologetic call and a new proposed closing date of April 24 – but still no signed paperwork.“It’s unbelievable. With all we hear about all the homes out there that need to be sold, I have to call my congressman in order to purchase a house,” Garcia said. “If that’s the process, there’s no way we’re going to clear all these foreclosures.”As bargain hunters turn their attention to foreclosures, many are discovering the toughest challenge is dealing with the banks that repossessed the homes. These banks are usually quick to accept a bid and write a contract. But the closer buyers get to the settlement table, the greater the potential for bureaucratic bungling and the chance the buyers will give up.The housing market stands little chance of recovering until the foreclosures are sold. Distressed properties make up roughly a quarter of U.S. homes for sale. Moving them would go a long way toward stabilizing home prices. But working with the banks, which are typically based far from the homes they’re selling, is not as simple as buying from a regular homeowner.“Things go wrong, and it takes the bank a lot longer to deal with them,” said Vivianne Couts, a Virginia real estate agent. “There are a lot more people involved, many more layers. The Realtor can’t always call the bank and say, ‘What’s going on here?’”Garcia and Hoffman, both first-time home buyers, realize that now.When their closing date passed and no one could explain the delay, they started digging into court records. They learned that days after the bank had repossessed the home, the previous owner had filed for bankruptcy protection. Garcia said all the bank needed to do was submit paperwork to the court confirming that it had foreclosed on the house prior to the bankruptcy filing. But that letter didn’t materialize until their congressman, Rep. John Sarbanes (D-Md.), intervened.The bank, CitiFinancial Mortgage, declined to comment on the case. But Mark Rodgers, a spokesman for Citi, said the company tries to handle closings expeditiously. “If and when there is a delay, we regret any inconvenience to the customer,” he said.Garcia and Hoffman feel stressed. The lease on their apartment runs out this month. They do not understand why the bank didn’t jump to unload the property, especially because they offered nearly $5,000 more than the $170,000 asking price.“I can’t believe we had to bring this [bankruptcy] to everyone’s attention,” Garcia said. “It’s as if no one did their homework on this property and when they found out there was a problem, they were like, ‘We’ll get to it. We’ll get to it.’”By all accounts, banks are overwhelmed by the record foreclosure volume. In the Washington region, there were 217 foreclosures as of April 1 for every 10,000 properties, up from 16 about two years ago, according to George Mason University’s Center for Regional Analysis.Dennis King, a lawyer who handles foreclosures for banks, said that when home prices were climbing, the banks never had to keep houses long. Investors would snap them up in auctions on the courthouse steps.But in the past two years, with prices plummeting, investors are no longer interested. So banks must try to sell to the general public, which takes longer.“The more time that lapses between a home getting foreclosed on and the sale of the property to the next buyer, the more problems that can crop up,” King said. “Maybe the property taxes were up to date when the house was on the market, but they’re not up to date anymore.”When a bank repossesses a home, it typically hires a lawyer to check whether there are other claims on the property, such as a mechanic’s lien. But the lawyer is paid to look only at the time from when the owners took out the mortgage to the time they lost the house. Any pre-existing problems – or new ones – usually surface at closing time, when a more thorough search is done.If the bank goes under, that creates more hassles. Also, in states that require court approval of the foreclosure, including Maryland, there can be a disconnect between the legal procedure and the sale. A house can be on the market before the foreclosure is approved. The buyers may be left waiting for the court.“So in other words, I’m the happy home buyer and I’ve got my furniture in the truck, and I find out that the foreclosure is not ratified and nobody knows for sure when it’s going to get ratified,” said Jeffrey Fisher, a foreclosure lawyer in Upper Marlboro who works for banks. “That’s a cold slap in the face and a financial hardship.”Michele and Timothy Bowden not only had their furniture packed, but also had their friends and family in tow when they drove this summer from their old home in Florida to their new one in Burke.On closing day, the bank discovered it did not legally own the house because the necessary paperwork had not been done. The Bowdens were told they had to wait as the bank in California sorted through the mess with its foreclosure lawyer in Texas.“So there we were, my husband and I, our two kids, grandma, grandpa, the dog, our friends. We had to live in hotel rooms for 10 days,” said Michele Bowden, who moved into the house in August. “Everyone had come down to help us move. …We calculated that between all of us, we incurred over $7,000 in costs for the hotel rooms, eating out for days on end, all the driving around and the moving company’s furniture storage fees. Then we had the waiting game.”Buyers can cause delays, too, some real estate agents said. Banks generally sell homes as-is and on their own complicated terms. Buyers know that going in, but some are unwilling to accept it when it’s time to finalize the deal, especially when it’s time to sign a six-page addendum to the contract detailing the bank’s conditions.“Some people see this, and they freak out,” said Barbara Newcomb, a Maryland real estate agent who sells homes for the banks. “I’ll get addendums back that are scratched through and changed and the banks won’t accept them – then the buyers get mad at me.”On rare occasions, the mix-ups don’t end after the purchase, said Joy Siegel, a Bethesda lawyer who handles home-sale closings. Siegel recalled how one of her clients was shocked when she showed up at her house, a foreclosure she had purchased weeks earlier, and found the locks had been changed and a “no trespassing” sign was posted because of a miscommunication relating to the timing of the home’s sale.“I called the bank immediately and the lady on the other end of the line responds like this, very calmly: ‘This happens in approximately 5 percent of our cases. We’ll send someone over to let her in,’” Siegel said.Copyright © 2009 washingtonpost.com.
ORLANDO, Fla. – April 14, 2009 – The Orlando area’s huge backlog of existing homes for sale shrank to a 26-month low last month as local Realtors sold 48 percent more houses and condominiums than they did a year ago.The year-over-year improvement in resales, which extends back seven consecutive months to last September, was given a boost again in March by foreclosure-driven bargain prices. March sales of homes and condominiums in the core Orlando market rose to 1,653 this year from 1,120 a year ago, even as the median price fell nearly 38 percent to $137,000 from $220,000 in March 2008.For the first time, the Orlando Regional Realtor Association examined “distress sales” in detail and found that 49 percent of the homes sold by its members last month were either owned by banks already or had been sold under financial pressure of some kind.The report released Monday also revealed a wide disparity in market prices because of the large number of foreclosed properties:• Bank-owned homes – those already through foreclosure – sold for a median price of $95,000.• Homes for which lenders had agreed to take less than the amount owed on the mortgage – known as pre-foreclosure or “short” sales – sold for a median of $143,500.• Homes marketed by owners not under financial duress sold for a median of $174,995.Jeffri Moore and her husband, Alex, are among a growing number of local house hunters trying to snap up properties for deep discounts of 50 percent or more – sometimes, substantially more. For example, the east Orange County couple just submitted an offer for a condo unit in a former apartment complex near their home that was listed through a discount brokerage for $21,500. It had once been appraised for $131,000.“We saw it, and it does need some work,” Jeffri Moore said. But the couple is planning to pay cash to avoid financing costs and to speed the process, she said, and they’re willing do most of the repair work on their own to save more money.“We’re doing this for a family member who’s about to be homeless because they’re out of work. We don’t want to see that happen,” she said.Mortgages prove elusiveGetting standard bank financing to buy a condo unit – particularly in a project with multiple foreclosures – is difficult if not impossible these days, even for buyers with excellent credit, incomes and steady jobs, the Moores and other prospective buyers are discovering.The rising unemployment rate nationally and locally has added to the pressure on real-estate prices, driven downward for more than a year now by soaring foreclosure rates, which began with the meltdown of the subprime-mortgage market but spread to other financial sectors and the economy overall. Conventional mortgage lenders have tightened their lending standards as a result, particularly for condominiums and for second homes or “investment” properties.The number of residential properties listed for purchase through the Orlando Realtors’ Multiple Listing Service, which covers mainly Orange and Seminole counties, peaked in late 2007 at more than 26,000. Last month, the local inventory stood at 21,448 homes, down by 720 from February and 15.8 percent lower than in March 2008. The last time the inventory was lower: January 2007.Combined with the improvement in monthly sales, that means the inventory, as measured by “months of supply,” is shrinking even faster: It fell from 16.77 months in February to 12.98 months in March – far below its peak of 31.64 in January 2008 and the lowest it has been since December 2006.Prices at 2003 levelsThe March median sale price of $137,000 in the Orlando Realtors’ core market is the lowest for that measure since January 2003. The 1,653 sales in March are the most since May 2007. Pending sales, meanwhile, were up more than 100 percent last month, with 4,906 homes under contract compared with 2,398 a year ago.“Orlando home buyers are getting back into the market and taking advantage of improved affordability,” Les Simmonds, president of the Orlando Realtors group, said in Monday’s report.Simmonds, president of L.G. Simmonds Real Estate Corp. in Longwood, said record-low mortgage rates are helping fuel the improved sales. The 4.67 percent average in March for 30-year fixed-rate loans was the lowest on record, Simmonds noted, though rates inched up slightly last week. © 2009 The Orlando Sentinel, Fla., Jerry W. Jackson. Distributed by McClatchy-Tribune Information Services.
CHALMETTE, La. – April 13, 2009 – Thomas Stone and his wife rebuilt after their home was flooded by 6 feet (2 meters) of water during Hurricane Katrina, never dreaming they would face the agony of tearing it apart all over again.They tapped Lauren Stone’s retirement savings and saved $1,000 by installing Chinese-made drywall throughout their two-story home after the 2005 storm. Now the Stones are among hundreds of Katrina victims facing another, this time unnatural, disaster.Sulfur-emitting wallboard from China is wreaking havoc in homes, charring electrical wires, eating away at jewelry, silverware and other valuables, and possibly even sickening families.“The bathroom upstairs has a corroded shower-head, the door hinges are rusting out,” said 50-year-old Thomas Stone, the longtime fire chief of St. Bernard Parish, outside New Orleans. And then there’s the stench, like rotten eggs, that seems to get worse with the heat and humidity.“It makes me wish there would be another flood to wash it out,” said his wife Lauren, 49.Chinese manufacturers flooded the U.S. market with more than 500 million pounds of drywall around the same time Katrina was flooding New Orleans, an Associated Press review of shipping records has found.The boom in imported China-made building materials peaked in 2006, driven by domestic shortages created by the nationwide construction boom, as well as a series of Gulf Coast hurricanes.That year, enough wallboard was imported from China to build some 34,000 homes of roughly 2,000 square feet (186 square meters) each, according to the AP’s analysis and estimates supplied by the nationwide drywall supplier United States Gypsum. But experts and advocates say many homes may have been built with a mixture of Chinese and domestic drywall – which could push the number of affected homes to 100,000 or more, by some estimates.The drywall apparently causes a chemical reaction that gives off the rotten-egg stench and corrodes metal. Researchers do not know yet what causes it, but possible culprits include fumigants sprayed on the drywall and material inside it. The Chinese drywall is also made with a coal byproduct called fly ash that is less refined than the form used by U.S. drywall makers.The U.S. Product Consumer Safety Commission and a number of states are investigating the extent of the problem, what’s causing it, and whether it poses serious health risks. But it could be years before the full extent of the problem is known.Meanwhile, the humid and warm climate of the U.S. South has meant the impact is being felt here first – at least 350 people in Louisiana have already complained to the state health department in yet another unexpected twist for hurricane victims who have lived through more than three years of hardship.“We’ve been through the storms, we heard about the formaldehyde,” Louisiana Department of Health and Hospitals spokesman Renne Milligan said, referring to a previous housing nightmare in which tests showed elevated levels of formaldehyde in hundreds of trailers issued by the federal government.“Some of our residents are still living through that, and now we’re talking about this drywall,” Milligan said.Governors in Louisiana and Florida are asking for federal assistance, and members of Congress are calling for a recall and a ban on future imports.Like hundreds of other homeowners from Florida to Texas, the Stones have signed on to a class-action lawsuit directed against the manufacturers, suppliers and builders of the drywall. The defendants in the Louisiana cases include Knauf Gips KG, Knauf Plasterboard Tianjin Co., Taishan Gypsum Co., L&W Supply Corp. and USG Corp., a major U.S. drywall supplier.“What we’re trying to do is get to the bottom of what is precisely going on,” said Ken Haldin, a spokesman for Knauf Plasterboard Tianjin.The lawsuits contend the Chinese drywall is emitting sulfur, methane and other volatile organic chemical compounds that are ruining plaintiffs’ homes and harming their health.Some of the companies told AP they are looking into the complaints, but downplayed the possibility of health risks.The Chinese ministries of commerce, construction and industry and the Administration of Quality Supervision Inspection and Quarantine did not respond to repeated requests for comment from the AP, although Chinese media have reported that AQSIQ, which enforces product quality standards, was investigating.No U.S. agency regulates the chemical compounds used in imported drywall.Attorney Daniel Becnel has filed about 15 lawsuits in federal court in New Orleans on behalf of hundreds of homeowners.“And we’re getting more in every single day,” he said. “People are just distraught.”Mississippi attorney Steve Mullins has also joined the cadre of court actions.“Bloody noses, headaches, respiratory infections,” Mullins said, ticking off the list of health problems reported by his clients. “Over and over like a broken record.”He said his research indicates the problem could exist in hundreds of thousands of homes nationwide, a conclusion echoed by other experts.Mary Haindel’s home near Lake Pontchartrain in Louisiana was destroyed by Katrina’s floodwaters, so she bought a new, $320,000 town-home in an area known as the North Shore, where many hurricane victims relocated. Soon, the coils on her air conditioning system went out, and copper slowly turned black – telltale signs that the tainted wallboard was used.Haindel, a 45-year-old real estate agent and jewelry appraiser, moved out. She is now renting a condominium and says it will be difficult to sell the home.“It’s Katrina all over again,” Haindel said. “It was an immediate: You got to go, you pick up, and you leave.”Copyright © 2009 The Associated Press, Cain Burdeau (Associated Press Writer). Associated Press Writers Brian Skoloff in West Palm Beach, Florida, and Joe McDonald in Beijing contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
GAINESVILLE, Fla. – April 13, 2009 – Keeping in step with the U.S. economy, Florida land values took a tumble in 2008, with some areas losing more than half of their 2007 worth.According to the annual Florida Land Value Survey, conducted by the University of Florida’s (UF) Institute of Food and Agricultural Sciences, rural land and land outside of metropolitan areas – eagerly sought by developers in recent years – is now commonly being offered for sale at a fraction of its cost.“In some cases, it’s almost like a fire sale,” says Rodney Clouser, the UF professor of food and resource economics who led the survey. Some respondents reported large blocks of land being offered at 20 to 30 percent of their purchase price.A population boom between 2002 and 2006 contributed to a dramatic rise in land prices throughout Florida. But now, the state’s annual population increase is expected to be only 10 percent of the boom years’ growth, according to UF population projections.The survey, which does not cover urban land values, showed that land outside cities primed for development, dubbed transition land, decreased by as much as 55 percent in the northern half of the state.Transition land within five miles of urban centers in the southern half of the state lost nearly 40 percent of its value.However, in the one exception to the otherwise gloomy economic picture, transition land more than five miles away from urban centers in the southern half of the state increased by 5 percent. Most likely, this is because its low price and relative location to large cities was seen as the best deal by those still looking to buy real estate, Clouser says.Nevertheless, the 5 percent increase is significantly smaller than the nearly 17 percent increase for the same area last year.Lagging development hasn’t just affected areas destined for shopping malls and homes. It has also contributed to drops as large as 26 percent in farmland values.Although such land is typically evaluated primarily by the profitability of the crop produced, urban expansion was so rapid in recent boom years that many began to evaluate the land based on what it would bring if used for housing or other development purposes, Clouser says.Land prices are expected to continue their drop through 2009 – although not as dramatically as in 2008. Survey responses from individuals involved in the Florida real estate market predict an overall drop between 5 and 17 percent.Even after the national economic picture brightens, Clouser says, a surplus of homes and other existing development would need to be sold before demand would once again drive land prices up.The report can be viewed at http://edis.ifas.ufl.edu/FE798.© 2009 FLORIDA ASSOCIATION OF REALTORS®
NEW YORK (AP) – April 9, 2009 – Rates on 30-year mortgages inched higher this week after two straight weeks of record lows, but still remained at attractive levels for borrowers looking to refinance their home loans.Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages rose to 4.87 percent this week from an average of 4.78 percent last week. That was the lowest in the history of Freddie Mac’s survey, which dates back to 1971.Rates have been below 5 percent for four consecutive weeks and are still down by a full percentage point from a year ago.Low rates have sparked a surge in refinancing activity, with nearly 80 percent of new home loan applications coming from borrowers seeking to refinance. Freddie Mac’s sibling company, Fannie Mae, refinanced $77 billion in loans last month, nearly double February’s level and the best month for such activity since 2003, while the housing market was still surging.Speaking at the White House Thursday, President Barack Obama said millions of Americans can save money by refinancing their home loans. “We are at a time where people can really take advantage of this,” Obama said.Obama touted the increase in refinancing nationwide as a sign that federal programs to help homeowners are working, but warned that loan modification operations that ask for money upfront are “probably a scam.”Mortgage rates fell dramatically over the winter. They fell further after the Federal Reserve said last month it would buy $1.2 trillion in mortgage-backed securities and $300 billion in long-term government debt, which traditionally influences rates on 30-year home loans.Frank Nothaft, Freddie Mac’s chief economist, said in a statement that low rates “should keep homeowner affordability at record levels.”Lenders, however, have tightened their standards dramatically over the past year, so the best rates are available to those with solid credit. Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.The average rate on a 15-year fixed-rate mortgage inched up to 4.54 percent this week from 4.52 percent last week, according to Freddie Mac.Rates on five-year, adjustable-rate mortgages rose to 4.93 percent from 4.92 percent last week. Rates on one-year, adjustable-rate mortgages rose to 4.83 percent from 4.75 percent.The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for all mortgages in Freddie Mac’s survey except for one-year adjustable mortgages, which had an average fee of 0.5 point.Copyright 2009 The Associated Press, Alan Zibel, AP Real Estate Writer. Associated Press Writer Ben Feller contributed to this report from Washington.
TALLAHASSEE, Fla. – April 9, 2009 – State officials have sustained a setback in efforts to shore up the state’s Hurricane Catastrophe Fund, which is intended to back homeowners insurance companies in case of a major storm.An aide to Sen. Bill Nelson confirmed Wednesday that U.S. Treasury officials have said they won’t issue a line of credit backing up the Cat fund.Dan McLaughlin, Nelson’s deputy chief of staff, said that’s not the end of the line for possible federal help with the Cat fund.“It was one avenue being explored – it’s not good news, but it’s not the end of the effort either,” McLaughlin said.McLaughlin said other options include asking the Treasury for a federal guarantee of private loans, or asking the Federal Reserve for a line of credit or loan guarantee.And, he noted, Nelson and other Florida Congress members still hope to establish a national catastrophe fund, which would back state funds including Florida’s.McLaughlin said Assistant Treasury Secretary Alan Krueger told state officials in a phone call two weeks ago the department doesn’t have the authority to issue a line of credit.By state law, the Cat fund must be able to cover up to $29 billion in potential damages, in the case of a storm so bad it exceeds private insurance companies’ ability to pay claims.Right now, state officials say, the fund could only cover about $11 billion.The Cat fund backs private companies by selling them “reinsurance” – in essence, insurance policies for insurance companies.If the Cat fund can’t be shored up, it could leave some companies unable to back policies without big rate increases.Next week, state officials are expected to report to the governor and Cabinet on alternatives for the fund. Last year, the state paid $224 million to the firm of billionaire investor Warren Buffett in return for a promise that Buffett would lend the state $4 billion if needed.Copyright © 2009 Tampa Tribune, Fla., William March. Distributed by McClatchy-Tribune Information Services.
NEW YORK – April 8, 2009 – Economic recovery is about making people feel more confident, says Mark Zandi, chief economist of Moody’s Economy.com, and Zandi pointed to increasing home sales and gains in the stock market as promising signs that the worst is over and that people will start spending again.“We’re starting to see some pent-up demand for goods,” he says.But Zandi warns that the situation is still fragile. “Confidence is a very fickle thing. It can go from abject pessimism that pervades now to a more balanced view of the world rather quickly.”Robert Brusca of FAO Economics is predicting strong growth in the last half of the year and a quick recovery for the labor market. “You’ve lost 5 million jobs. It shouldn’t be hard to put 2.5 million jobs back on rather quickly after you hit bottom,” he said.Joseph Carson, chief economist at AllianceBernstein, calls improving home sales, a rising stock market, and better-than-expected retail sales in February and March good signs of a turnaround. By the time President Obama’s stimulus package takes effect, the economy will be ready, he says.“The stimulus has a much better chance of working if trends are already turning up than if it needs to halt a decline,” he said.Source: CNNMoney, Chris Isidore (04/06/2009)© Copyright 2009 INFORMATION, INC. Bethesda, MD
WASHINGTON – April 8, 2009 – Thanks to record low mortgage rates and declining home prices, 55 million families – half of all U.S. households – can afford today’s $200,000 median-priced new home, according to figures released by the National Association of Home Builders (NAHB).“That’s an increase of 17 million households from conditions just two years ago, and the best housing affordability number we have seen in years,” says NAHB Chairman Joe Robson. “We are now seeing the first signs that buyers are returning to the marketplace.”Based on data from the U.S. Census Bureau comparing home prices, mortgage rates and minimum income needed to purchase a median-priced home in February 2007 and February 2009, a typical family today can purchase a house with $20,000 less in household income as they save nearly $500 per month on principal, interest, taxes and insurance. The number of households that can afford to purchase a home today is 55.4 million, compared with 38.4 million two years ago, according to figures compiled by NAHB.Single-family permits rose 11 percent in February; new and existing home sales also posted gains; and the huge inventory backlog is being slowly whittled down. In a survey for Century 21 Real Estate last month, a majority of prospective first-time home buyers – 78 percent – said that now is a good time to buy a home. Of those responding to the online poll, 68 percent said that now is a better time to buy than six months ago.Another sign that consumers are considering jumping back into the housing market is the growing interest in the $8,000 first-time home buyer tax credit included in the recently enacted economic stimulus package. During February and March, 1.5 million visitors logged on to NAHB’s consumer Web site, www.federalhousingtaxcredit.com, to learn more about the tax credit. Further, a new survey commissioned by Move Inc. found that nearly 20 percent of those who plan to purchase a home this year are doing so to take advantage of the tax credit, which expires at the end of November.© 2009 FLORIDA ASSOCIATION OF REALTORS®
WASHINGTON (AP) – April 7, 2009 – Federal and state officials are cracking down on mortgage modification scams, accusing “criminal actors” of preying on desperate borrowers caught up in the nation’s housing crisis.Government officials said Monday that scammers are seeking to take advantage of borrowers in danger of default by charging them upfront fees of $1,000 to $3,000 for help with loan modifications that rarely, if ever, pay off.The frauds often involve companies with official-sounding names designed to make borrowers think they are using the Obama administration’s efforts to help modify or refinance 7 million to 9 million mortgages.“If you are struggling to make your mortgage payment, or if you are facing foreclosure, stay away from anyone who says that they will save your home for money upfront,” Illinois Attorney General Lisa Madigan told reporters in Washington.Officials say such operations almost always are fraudulent, and that help is available for free from government-approved housing counselors.“These are predatory schemes designed to rob Americans of their savings and potentially their homes,” Treasury Secretary Timothy Geithner said. “We will shut down fraudulent companies more quickly than before. We will target companies that otherwise would have gone unnoticed under the radar.”The Federal Trade Commission has sent warning letters to 71 companies it says were running suspicious advertisements. The agency also said it filed three new complaints against Irvine, Calif.-based Federal Loan Modification Law Center, Newport Beach, Calif.-based Bailout.hud-gov.us, and Clearwater, Fla.-based Home Assure LLC, and the operators of those companies.Bill Anz, founding partner of Federal Loan Modification Law Center, defended his operation, saying he will offer a refund to anyone who doesn’t get a modification. About 20 percent of the 5,000 customers have received a modification so far, he said, with more in the works.“People might not like it,” Anz said, but “realistically, the problem is so large that the private sector must step in.”Still, Anz, who advertises on television and radio stations nationwide, said he would be willing to changing his company’s name. He conceded the name “might be aggressive.”Thomas Ryan, the operator of Bailout.hud-gov.us, has agreed to take the Web site down. Ryan said he still operates another site — which he would not name — that generates leads for foreclosure rescue operations. “They’re providing a legitimate service,” he said.A federal judge last month granted the FTC’s request for a temporary restraining order against two New Jersey-based companies: Hope Now Modifications LLC and New Hope Modifications LLC. The government said the companies mimicked the Hope Now alliance, which runs the mortgage industry’s foreclosure prevention effort.The FBI is investigating about 2,100 mortgage fraud cases, a 400 percent increase from five years ago, Attorney General Eric Holder said Monday.“If you prey on vulnerable homeowners with fraudulent mortgage schemes or discriminate against borrowers, we will find you and we will punish you,” Holder said.Homeowners do not have to pay to participate in the administration’s Making Home Affordable program, which seeks to prevent foreclosures by making mortgages affordable through refinancing or modified terms.The FTC said other signs of a mortgage scam are: promises to stop foreclosure or modify a loan; guarantees that your home will be saved and claims of a “97 percent success rate;” and use of official-sounding names.One Internet ad uses an image of President Barack Obama with the text “Avoid Foreclosure. Qualify For Obama’s New Housing Rescue Plan.” Only by reading a fine print disclaimer can the consumer learn that the site is not sponsored by the government.Over the past year homeowners have been flooding state attorneys general with complaints about for-profit loan modification consultants. Roadside billboards in places like Las Vegas scream, “Save my property!” and radio ads promise “expert help.” Some companies comb property records and send mail designed to look like it is from the homeowner’s lender.Some of those offering help are former brokers, agents and appraisers who’ve seen their previous business evaporate. But consumer advocates say the legitimate consultants are no more effective than nonprofit credit counselors who also work with lenders at no charge.The shadiest operators, consumer advocates say, can actually force borrowers out of their homes by persuading them to sign over the title or grant power of attorney.While not every loan modification business is fraudulent, “swimming around in those waters are a lot of sharks,” said Jim Carr, chief operating officer at the National Community Reinvestment Coalition in Washington.Some states recently have toughened penalties for perpetrating foreclosure scams, and some prosecutors have used existing fraud statutes to bring criminal charges. But many state prosecutors have not filed criminal cases, instead proceeding with civil lawsuits.Homeowners can locate free housing counselors at www.makinghomeaffordable.gov or by calling (888) 995-HOPE.Copyright © 2009 The Associated Press, Alan Zibel (AP Business Writers).
TALLAHASSEE, Fla. (AP) – April 7, 2009 – The Florida Senate is giving up on trying to repeal sales tax exemptions due to resistance from the House and a desire to focus on other revenue-raising proposals including a cigarette tax increase, the chamber’s finance and tax chairman said Monday.Exemptions on such necessities as food and medicine are considered untouchable, but lawmakers long have talked about lifting those on a variety of other purchases such as bottled water, charter fishing, Super Bowl tickets and college stadium skyboxes.Finance and Tax Chairman Thad Altman, R-Viera, told his committee he’s dropping the issue this year. Later, Altman said he wasn’t sure if it would come up next year either because lawmakers might be better off considering less divisive revenue sources.Every time the matter comes up, business lobbyists line up to defend exemptions on items their clients either sell or purchase.“We felt that it would be best that we focus on what we may be able to achieve for meeting the state’s needs – financial needs – and not wasting time on something we knew wouldn’t happen,” Altman said, citing the cool reception exemption repeals have gotten in the House.Both chambers are controlled by tax-averse Republicans, but Senate GOP leaders including Altman have loosened their stance because the state is facing a potential $6 billion revenue shortfall in the next budget year that begins July 1.Lawmakers are counting on federal stimulus money to fill about half of that gap. Both chambers have included spending cuts and fee increases on everything from driver licenses to court filings in their budget plans, but the Senate also is considering three major revenue enhancements.The first would increase taxes on cigarettes and small cigars by $1 a pack and $1 per ounce for other tobacco products. The other legislation is designed to close loopholes in corporate and real estate transaction taxes.That doesn’t leave sufficient time, with the 60-day legislative session half over, to deal with such a complex issue as sales tax exemptions, Altman said.“They affect a lot of different groups. They potentially could be controversial,” Altman said. “I hope we continue to look, but the vast majority of those are legitimate exemptions.”The state gives up billions of dollars in potential revenue through the exemptions, but Altman said he’s been able to identify no more than $250 million worth that might be ripe for repeal.Democrats who generally support repealing some exemptions said Altman’s decision was more a matter of will than time.“Some people just feel like they might be defeated in the next election if they have any kind of tax proposals on the agenda,” said Senate Democratic Leader Al Lawson of Tallahassee.“We have been talking about this for years,” said Sen. Nan Rich, D-Weston. “How complicated can it be?”Former Senate President John McKay, a Republican, has been trying since 2002 to force the Legislature to repeal exemptions that aren’t in the public interest. Lawmakers that year put a proposed state constitutional amendment on the ballot that would have let a committee of 12 lawmakers review exemptions. The Florida Supreme Court removed it, ruling the proposal was an excessive delegation of the Legislature’s power.In private life, McKay has tried without success to get various amendments on the ballot through the petition process. Last year, the Taxation and Budget Reform Commission, with McKay as a member, put another amendment on the ballot to swap a property tax cut for other new revenues potentially including exemption repeals. The Supreme Court also removed that proposal, citing a misleading ballot summary.Copyright © 2009 The Associated Press, Bill Kaczor (Associated Press Writer). All rights reserved.
CHICAGO – April 7, 2009 – The chief economist of Mesirow Financial, a $31.4 billion asset financial services firm in Chicago founded in 1937, announced that the housing market probably bottomed out in February and is now on the road to recovery. “An unexpected jump in new and existing home sales, a fairly sharp increase in mortgage applications, and a surprise increase in pending home sales prompted many to declare the bottom in housing in the month of February,” says Swonk. “Even home prices, which had been falling like a rock, showed some signs of stabilizing during the month. Moreover, speculators appear to be re-entering the market, picking up properties on the cheap.”“The housing market is still a long way from healthy: home sales are still down substantially from the lows they hit during the turbulence of the fourth quarter; pending sales were at such low levels, there was really nowhere to go but up; and more than 70 percent of the mortgage applications we saw in March were refinances instead of purchases,” notes Swonk.Swonk says a number of housing market shifts suggest a turnaround has started, including: • Starts of single-family home sales, in particular, are already close to zero and cannot fall much further. Multi-family starts are also exceedingly low and off more than 50 percent from their 2005 high. On net, overall starts are expected to decline again in the second quarter and then begin a gradual rebound in the second half of the year.Regional differences: The West and the South are expected to remain the weakest markets when it comes to construction activity, since they still suffer from the greatest overhang of vacant new properties.• Home sales are expected to bottom sooner than starts, which may have also hit their turning point in February, although a safer bet is probably May. Swonk says that’s not surprising given the fact that it’s easier to get a mortgage to buy a home than to get funding to build a housing development.Regional differences: The hardest hit areas in the West, which includes California and Nevada, are expected to post the strongest gains, as they currently offer buyers the best deals from short sales and foreclosures. The Midwest is expected to perform close to the national average, while the South and the Northeast remain laggards.• Prices. Home values plummeted as the economy slipped deeper into recession and credit markets seized last fall. By January, most indices were showing double-digit declines from a year ago. The best bet is that prices will end the year lower than during the bulk of 2008, but will come up slightly from the lows of the first quarter.Regional differences: The Northeast is expected to experience the greatest downward pressure on prices, as it was late into the correction. Declines in New York could be particularly large as the number of foreclosures balloons. The downward pressure on prices in the South, particularly in Florida, is also expected to remain fairly intense, given the overhang of vacant homes.“Housing is expected to swing from a drag to a push on overall GDP growth in 2009, for the first time in four years,” says Swonk. “That shift, coupled with tax incentives to lower the carbon footprint of individual homes, is expected to provide a boost to spending on everything from furniture and appliances to building materials. Any gains that we do see in housing and housing-related activity, however, will pale when compared against previous recoveries.”© 2009 FLORIDA ASSOCIATION OF REALTORS®
TALLAHASSEE, Fla. – April 7, 2009 – A coalition of powerful groups, including the Orlando-based Florida Association of Realtors, is lobbying the state to find a way to advance first-time homebuyers a new, $8,000 federal tax credit designed to spur home sales.Many first-time buyers have the income and credit to qualify for a home loan but need help with the downpayment, said Cynthia Shelton, an Orlando Realtor and current president of the statewide trade group. Fronting the money for the new tax credit could draw more qualified buyers into the slumping home market sooner, she said.A study by Miami-based economist Antonio Villamil concluded last week that “front loading” the tax credit, part of the federal government’s stimulus package, would give Florida’s economy a significant boost – equivalent to creating 33,206 jobs and generating $514 million in federal, state and local tax revenue.“I was in Tallahassee last week and I met with some senators. We’re pressing like mad to get this through,” Shelton said.But with state lawmakers rushing to complete their annual session by May 1, the chances of passing any such bill are remote, so other avenues are being explored, said Walt Dartland, executive director of the Consumer Federation of the Southeast.“The Legislature may or may not play a part,” Dartland said Monday from Tallahassee. “It’s true, we are out of time” for passing a new law from scratch. Other options being researched that might not require legislation, he said, include leveraging some of the resources of the Florida Housing Finance Corp., which already has a down-payment assistance program. Qualifying homebuyers would sign over their tax credits to repay the fund.In addition to the Realtors and the consumer federation, the alliance now urging the Legislature to consider the home-financing proposal includes the Florida Home Builders Association, Florida Bankers Association, Florida Credit Union League, Florida Manufactured Housing Association and Florida Association of Mortgage Brokers.Supporters of what the consumer federation is calling the “Florida formula” said the state has a short time in which to act because the tax credit is for homes purchased by the end of November. A tax credit is a dollar-for-dollar reduction in federal taxes owed.Steve Auger, executive director of the Florida Housing Finance Corp., said the agency has provided $66 million in downpayment assistance since 2007, but its ability to continue doing that is jeopardized by the possibility that lawmakers may commit all of the housing agency’s trust fund to the general fund this year because of a record budget shortfall.“I would hope the legislators would think long and hard about that,” Auger said.Dartland said that another idea being discussed would involve the state issuing short-term notes that could be sold to participating banks. Those notes could then be repaid with the homebuyers’ tax credits.Copyright © 2009 The Orlando Sentinel, Fla., Jerry W. Jackson. Distributed by McClatchy-Tribune Information Services.
NEW YORK – April 6, 2009 – U.S. office rents declined at the steepest rate in seven years during the first quarter of 2009, according to research firm Reis Inc.“It’s really sobering to see that even though we’re technically at the beginning of this downturn, the magnitudes of the declines, the fact that they’re registering historic levels, is really sobering,” says Victor Calanog, Reis director of research.So far, commercial property values have decreased 22 percent from their peak in 2007, according to J.P. Morgan. Nationwide, rents, minus discounts to tenants, have fallen 3.2 percent, compared to the first quarter of 2008. The vacancy rate rose 15.2 percent in the first quarter.Reis predicts that surplus space will reach 47.7 million square feet by the end of 2009, but some commercial property experts are saying that number is too low. Many economists expect a recovery in this sector by early 2010.Source: Reuters News, Ilaina Jonas (04/02/2009)© Copyright 2009 INFORMATION, INC. Bethesda, MD
TAMPA – April 6, 2009 – Hundreds of thousands of renters nationwide are at risk of being evicted, even though they’ve never missed a rent payment.Most don’t find out until the police arrive to evict them after the home is lost in foreclosure.So RealtyTrac, the California-based company that sells foreclosure information to investors, is launching a new system, RealtyTrac Renter Alerts. For $25 a year, a renter can have their address monitored.Some landlords collect rent even though they’re not paying the mortgage. Under RealtyTrac’s system, as soon as the mortgage enters into default in the court system, the renter would be notified by e-mail.The site also lets renters research properties to make sure they aren’t already in foreclosure.Company executives say states such as Florida could benefit the most from such a system because the foreclosure rate is so high.The Sunshine State had the fourth-highest foreclosure rate among all states in February, and the Tampa Bay area ranked 28th among the country’s metro areas for its filings, RealtyTrac said.Florida’s foreclosure activity – default notices, auction sale notices and bank repossessions – increased 43 percent from February 2008.The company’s renter Web site is at www.renter.realtytrac.com.Copyright © 2009 Tampa Tribune, Fla., Shannon Behnken. Distributed by McClatchy-Tribune Information Services
TALLAHASSEE, Fla. (AP) – April 6, 2009 – Gov. Charlie Crist has sent requests to the Environmental Protection Agency and Centers for Disease Control and Prevention asking for help with problems attributed to tainted Chinese drywall.Crist requested Friday that the federal agencies help Florida develop chemical testing strategies for homes that are experiencing severe copper corrosion. The request comes a day after Rep. Robert Wexler, D-Fla., asked the governor to declare a state of emergency over the problem. Crist has not declared a state of emergency, and a spokeswoman says it’s not clear what practical effect a declaration would have.An estimated 30,000 Florida homes could contain sulfur-emitting Chinese drywall that reeks of rotten eggs, destroys residential wiring and appliances and could cause health problems.Copyright © 2009 The Associated Press.
MIAMI – April 6, 2009 – Four months ago, one of loan originator Gisela Sauzo’s clients settled on the perfect home for herself and her two children.The single-family house in Miramar would have been a welcome change from apartment life. Although her credit wasn’t perfect – last December her credit score registered at 600 – it was high enough to secure a mortgage.So she thought.Four months later, Sauzo said the deal fell through because, in that time, her client’s credit score dropped to a 580. Her client – expecting to move into the home – didn’t renew the lease on her apartment and moved in with family. Her children are temporarily staying with her ex-husband.Sauzo’s client isn’t alone. Across the country, mortgages are slipping through the fingers of potential borrowers because lending rules are getting stricter.People with even above-average credit may have trouble getting loans.For Sauzo’s client, the reason the score dropped is a mystery.“It’s been an unpleasant ride,” Sauzo said. “I’m so upset about all of this – she’s a sweet lady.”But as more people face unemployment or decreased wages, foreclosure or even bankruptcy, creditors are demanding the one thing people may struggle to hold onto in this economy: really good credit.In the Miami-Fort Lauderdale metropolitan area, credit scores dropped about 13 points from the middle of 2005 to the end of 2008, according to the credit bureau Experian.It’s a region of the country with some of the highest growth in credit card balances during the same time period, Experian spokeswoman Susan Thomas said.Credit scores and credit reports, however, still rely on a formula that gives the most weight to punctual bill-paying and the amount of an individual’s debt. So some credit experts say that whatever your financial situation may be now, it’s important to keep your credit intact.“Eventually, this storm will pass,” said Howard Dvorkin, founder of the nonprofit Consolidated Credit Counseling Services, which is based in Fort Lauderdale. “When it does, people are going to need their credit. At least for the next five years, there’s going to be very, very strict lending requirements.”The most common type of credit score – called FICO – is based on a scale from 300 to 850.But even people who had what was once considered a fairly solid credit score – more than 700 – will face extra fees if they are attempting to get a mortgage backed by Fannie Mae or Freddie Mac, said Kenneth Harney, executive director of the National Real Estate Development Center. For example, Harney said, a buyer with a 699 FICO score who has a downpayment of about 25 percent at closing will pay a 1.5 percent delivery fee under new guidelines that became effective Wednesday.The lower the score, the greater the fees and the larger downpayment lenders are requiring.“It stands to reason that during recessions, people have more problems meeting their credit responsibilities and that pushes down credit scores,” Harney said. “Then you have creditors and lenders of all types making it tougher to get credit.“It’s a real squeeze there,” he said.The alternative, of course, is for hopeful homebuyers to get loans backed by the Federal Housing Administration, but those typically require paying for mortgage insurance and come with higher interest rates.Poor credit could also hurt those trying to find jobs and loans now and in the future. For example, the last time the Society for Human Resource Management surveyed employers in 2006, 42 percent of them said they check prospective employees’ credit reports before giving them a job.And many auto insurance companies consider credit scores when setting rates. Bills moving through the Florida Legislature aim to curb this practice.With good credit becoming more critical than ever, the definition of what defines a good credit score is changing.‘The lenders are saying ‘We’re interpreting the scores differently,’ “ said Jeff Isaac, a San Diego attorney and money management expert with radio and television shows.“Now a 680 is a higher risk than we used to think it was,” he said.Fundamentally, credit scores are still the same, said Angela Granger, vice president of analytics at Experian, one of the three major credit bureaus. The others are Equifax and TransUnion.“A 700 is still better than 500,” she said. “But it may be a little worse than a 700 was two years ago.”Copyright © 2009 The Miami Herald, Nirvi Shah. Distributed by McClatchy-Tribune Information Services.
TALLAHASSE, Fla. – April 6, 2009 – Lawmakers have begun work on two major property insurance bills that aim to fix current problems in Florida’s insurance market.One certain result: higher rates for homeowners, especially those covered by Citizens Property Insurance, the state-run insurer.A bill in the state House of Representatives would allow rates to rise no more than an average 20 percent a year. A similar bill in the Senate, where debate will continue Monday, allows for increases of no more than 10 percent a year for any homeowner.Gov. Charlie Crist, who championed insurance rate declines in the past two years, has acknowledged that rates need to rise. Some lawmakers are grudgingly moving in that direction as well.After two hours of discussion on more than a dozen changes and revisions, the House bill moved forward Friday with approval from the Insurance, Business and Financial Affairs committee. Among the amendments shot down quickly was one from Rep. Richard Steinberg, D-Miami Beach, which would have Citizens freeze rates for one more year. Citizens’ rates have been frozen since the start of 2007.Outside of South Florida, where Citizens has about half of its 1,066,304 policies, there is little sympathy for the insurer’s policyholders.David Daniel, director of government relations for the Florida Chamber of Commerce, in urging the committee to pass the insurance bill, reminded the House committee that Citizens does not cover the majority of Florida homeowners.Higher surchargesBesides higher rates, Citizens policyholders could face higher surcharges if the insurer runs a deficit. The House bill would allow Citizens to surcharge its customers up to 25 percent first. If the insurer still has a gap, it can tax all policies in the state – including its own policyholders again. The Senate bill doesn’t contain this provision.Right now, Citizens customers face a 15 percent surcharge first.Both the House and Senate bills offer changes to reduce the state’s exposure to hurricane risk by shrinking the size of the Florida Hurricane Catastrophe Fund. The CAT fund provides lower-cost backup insurance to insurers working in Florida.The House bill is more aggressive, reducing the fund’s capacity to cover losses and reducing the amount of reinsurance it can sell, noted Sam Miller of the Florida Insurance Council.Some ambiguitySome provisions of the bills remain a bit ambiguous, even to regulators. One amendment tacked onto the House bill baffled Deputy Insurance Commissioner Belinda Miller, who said she wasn’t sure whether the provision was meant to prevent the Office of Insurance Regulation from having input in the setting of agent commissions.Ed Domansky, an OIR spokesman, says the amendment could be a way to undermine the agency’s conditional approval of State Farm’s plan to stop writing homeowners coverage in Florida in three years.OIR is requiring that State Farm agents be allowed to write policies for other insurers.Right now, they can only write State Farm policies.Copyright © 2009 The Miami Herald, Beatrice E. Garcia. Distributed by McClatchy-Tribune Information Services.
