The think-tank Center for American Progress is questioning the premise that a 30-year, fixed-rate mortgage is the best option for homebuyers.
The reason mortgage-backed securities looked so attractive to banks is that they solved the problem of a mismatch between low rates on mortgages and higher rates for deposits. Banks worried about getting stuck earning low rates on a mortgage for 30 years while having to pay higher rates on bank accounts to attract depositors. Their answer: unload their mortgages to investors and let them worry about the profitability of the loans. Those investors hedged their bets by purchasing interest-rate swaps and other derivatives. Now, even Fannie Mae and Freddie Mac are having a hard time getting a handle on what those hedges are worth.
In other parts of the world, variable rates are the norm. While borrowers face the risk of rates going up, lenders at least can ensure the rates they pay to depositors don’t outstrip what they receive in mortgage products. Homeownership rates in Canada and the European Union, where variable rate mortgages are the norm, are about what they are in the U.S.
And in any case, there are ways for borrowers to mitigate their interest-rate risk. They can take out loans with fixed initial periods, for example. For homeowners who typically hold their homes for seven years, a five-year fixed rate provides considerable security.
If the country persists in choosing fixed-rate mortgages, some observers say, lenders might consider the Danish model where mortgages are financed through the bond market rather than a separate securities market. That’s a system that has worked well for two centuries.
Source: The Wall Street Journal, James R. Hagerty (12/14/2009)
Friday, December 18, 2009
Monday, September 21, 2009
Homebuyer Tax Credit Deadline Nears
Time is fast running out for first-time buyers hoping to get a tax credit of up to $8,000, and Realtors say they’re seeing a marked upswing in interest as the deadline looms.
Real estate groups also are urging Congress to extend the credit beyond its current deadline and expand the tax credit to up to $15,000. Now, buyers must close on their purchase by Nov. 30 to be eligible for the credit.
Home builders and real estate organizations are concerned that letting the tax credit expire could knock the wind out of the current housing recovery. And failing to expand the credit could imperil efforts to get more move-up buyers into the market.
“Right now, the recovery is in the first stage and getting entry-level buyers in, but it’s having no impact on the move-up buyer,” says Richard Smith, CEO of Realogy, the parent company of Century 21, Coldwell Banker and others. “If we can expand the credit to go after that move-up buyer, we’ll be home free.”
The tax credit available to first-time homebuyers is already linked with an uptick in sales. For the first time in five years, existing home sales have increased for four months in a row, according to an August report by the National Association of Realtors (NAR).
Sales rose 7.2 percent in July from June, and pending sales are 5 percent above the pace seen in July of 2008
Many of those using the tax credit, however, are buying up foreclosed homes that are vacant. That does little to stimulate sales by homeowners looking to move up to more expensive properties. Getting more move-up buyers into the market is considered the second stage of the housing recovery.
And even though the tax credit doesn’t expire until Nov. 30, today’s home purchases take 45-60 days to close as the underwriting and appraisal process is taking longer because lenders are being more cautious. That means offers that will benefit from the tax credit really need to be in this month or early next month.
“Buyers have more of a sense of urgency,” says Tony Middleton, a Realtor in Los Angeles with ZipRealty, of the expiring tax credit. “They’re serious about shopping for a home.”
There is legislation in both the Senate and the House that would expand the tax credit. A proposal by Sen. Johnny Isakson, R-Ga., would raise the credit amount to a maximum of $15,000 for any buyer of any home over the next year. It would remove the income caps that currently apply (those limits are now $75,000 for an individual and $150,000 on couples).
“I think we’ve got a realistic chance of doing this,” Isakson says. “Our problem is not with the first-time home buyer, it’s the move-up buyer.”
Lawrence Yun, chief economist at NAR, says extending or raising the tax credit would spur the housing recovery, which in turn would help bolster the economy.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
Real estate groups also are urging Congress to extend the credit beyond its current deadline and expand the tax credit to up to $15,000. Now, buyers must close on their purchase by Nov. 30 to be eligible for the credit.
Home builders and real estate organizations are concerned that letting the tax credit expire could knock the wind out of the current housing recovery. And failing to expand the credit could imperil efforts to get more move-up buyers into the market.
“Right now, the recovery is in the first stage and getting entry-level buyers in, but it’s having no impact on the move-up buyer,” says Richard Smith, CEO of Realogy, the parent company of Century 21, Coldwell Banker and others. “If we can expand the credit to go after that move-up buyer, we’ll be home free.”
The tax credit available to first-time homebuyers is already linked with an uptick in sales. For the first time in five years, existing home sales have increased for four months in a row, according to an August report by the National Association of Realtors (NAR).
Sales rose 7.2 percent in July from June, and pending sales are 5 percent above the pace seen in July of 2008
Many of those using the tax credit, however, are buying up foreclosed homes that are vacant. That does little to stimulate sales by homeowners looking to move up to more expensive properties. Getting more move-up buyers into the market is considered the second stage of the housing recovery.
And even though the tax credit doesn’t expire until Nov. 30, today’s home purchases take 45-60 days to close as the underwriting and appraisal process is taking longer because lenders are being more cautious. That means offers that will benefit from the tax credit really need to be in this month or early next month.
“Buyers have more of a sense of urgency,” says Tony Middleton, a Realtor in Los Angeles with ZipRealty, of the expiring tax credit. “They’re serious about shopping for a home.”
There is legislation in both the Senate and the House that would expand the tax credit. A proposal by Sen. Johnny Isakson, R-Ga., would raise the credit amount to a maximum of $15,000 for any buyer of any home over the next year. It would remove the income caps that currently apply (those limits are now $75,000 for an individual and $150,000 on couples).
“I think we’ve got a realistic chance of doing this,” Isakson says. “Our problem is not with the first-time home buyer, it’s the move-up buyer.”
Lawrence Yun, chief economist at NAR, says extending or raising the tax credit would spur the housing recovery, which in turn would help bolster the economy.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
Tuesday, September 8, 2009
Foreclosures in neighborhood hurt your home's value
A Bradenton couple recently found a buyer willing to pay $137,000 for their home. But the deal fell apart when the appraised value came in 12 percent lower - at $120,000.
It's a painful scene playing out all over the Tampa Bay area.
In Riverview, a homebuyer agreed to pay $162,000, but the appraisal came back at $150,000. A Trinity homeowner had a contract to sell for $207,000 - 6 percent more than the appraisal of $195,000.
All of these homes appraised for less than the amount a buyer was willing to pay because of one thing: too many foreclosures and distressed sales in the neighborhood, said David Teacher, who was hired to appraise the homes by the buyers' lenders.
"When there are bank-owned homes in basically the same condition that have sold or are listed for sale for cheaper, an appraiser has to consider them," Teacher said.
In this fragile real estate market, what your neighbor does has never mattered more. Sellers have to compete with distressed sellers, even if they're not distressed themselves.
Every time a home in your neighborhood, or especially on your street, sells at a fire-sale price, your home's value is likely to drop, too.
The issue has, at times, pitted real estate professionals, such as appraisers, builders and real estate agents, against one another.
Appraisers determine value, in part, by looking at comparable sales in the area. Teacher said he tries to find "regular" sales to use as comparables, but that's not possible in some neighborhoods with a large supply of distressed sales.
That said, he says some appraisers use the closest distressed sales and ignore comparable sales that would have rendered a higher value.
For example, he recently appraised a Palm Harbor home for 6 percent more than the bank ended up accepting. That sale will now affect other appraisals in the neighborhood, even though the appraisal was low.
Appraisals aren't just affecting regular Joes trying to sell their homes. Builders are increasingly being told by lenders that new homes drop in value so much during the construction process that they can't fund loans.
Jennifer Doerfel, executive vice president of the Tampa Bay Builders Association, said one of the reasons the values are dropping is because distressed sales nearby drag down the values.
The problem is, she said, foreclosed homes aren't worth as much as new homes.
"In most cases, these foreclosures and short sales aren't comparable at all," Doerfel said. "There's likely mold or other damage in the distressed home. The home that's in better condition should be worth more."
This year's showcase home for the builders association was expected to have a value of $1.3 million, she said. But now that it's completed, the appraised value is less than it cost the builder to construct it.
So what can you do if you disagree with a low-ball appraisal on your home?
Some homeowners have had success by asking their real estate agents to fight it, Teacher said. If the appraiser overlooked higher comparable sales, you can point those out to the lender and buyer.
Sometimes, he said, it makes a difference.
But if you live in a neighborhood hit hard by foreclosures, you're likely going to have to live with it.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
It's a painful scene playing out all over the Tampa Bay area.
In Riverview, a homebuyer agreed to pay $162,000, but the appraisal came back at $150,000. A Trinity homeowner had a contract to sell for $207,000 - 6 percent more than the appraisal of $195,000.
All of these homes appraised for less than the amount a buyer was willing to pay because of one thing: too many foreclosures and distressed sales in the neighborhood, said David Teacher, who was hired to appraise the homes by the buyers' lenders.
"When there are bank-owned homes in basically the same condition that have sold or are listed for sale for cheaper, an appraiser has to consider them," Teacher said.
In this fragile real estate market, what your neighbor does has never mattered more. Sellers have to compete with distressed sellers, even if they're not distressed themselves.
Every time a home in your neighborhood, or especially on your street, sells at a fire-sale price, your home's value is likely to drop, too.
The issue has, at times, pitted real estate professionals, such as appraisers, builders and real estate agents, against one another.
Appraisers determine value, in part, by looking at comparable sales in the area. Teacher said he tries to find "regular" sales to use as comparables, but that's not possible in some neighborhoods with a large supply of distressed sales.
That said, he says some appraisers use the closest distressed sales and ignore comparable sales that would have rendered a higher value.
For example, he recently appraised a Palm Harbor home for 6 percent more than the bank ended up accepting. That sale will now affect other appraisals in the neighborhood, even though the appraisal was low.
Appraisals aren't just affecting regular Joes trying to sell their homes. Builders are increasingly being told by lenders that new homes drop in value so much during the construction process that they can't fund loans.
Jennifer Doerfel, executive vice president of the Tampa Bay Builders Association, said one of the reasons the values are dropping is because distressed sales nearby drag down the values.
The problem is, she said, foreclosed homes aren't worth as much as new homes.
"In most cases, these foreclosures and short sales aren't comparable at all," Doerfel said. "There's likely mold or other damage in the distressed home. The home that's in better condition should be worth more."
This year's showcase home for the builders association was expected to have a value of $1.3 million, she said. But now that it's completed, the appraised value is less than it cost the builder to construct it.
So what can you do if you disagree with a low-ball appraisal on your home?
Some homeowners have had success by asking their real estate agents to fight it, Teacher said. If the appraiser overlooked higher comparable sales, you can point those out to the lender and buyer.
Sometimes, he said, it makes a difference.
But if you live in a neighborhood hit hard by foreclosures, you're likely going to have to live with it.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
Monday, September 7, 2009
Florida Expected to Face More Financial Woes
Florida can expect more potential deficits during the next three budget years, the Legislature’s top economist told a panel of lawmakers from both chambers Thursday.
Amy Baker, coordinator of economic and demographic research, laid out that scenario for the Legislative Budget Commission. It’ll be part of a three-year financial outlook the panel will finalize when it meets again Sept. 15.
Baker said the state has sufficient reserves to cover $285.9 million in unbudgeted needs that now are expected during the current budget year, which runs through June 30.
But lawmakers are facing a potential deficit of $923 million to pay for critical needs, such as expenditures required by the Florida Constitution, court orders and federal law in the next budget year. The gap jumps to $2.6 billion if other high priority needs – those the Legislature has historically funded – are added.
For 2011-12, the budget gap could range from $2.3 billion for critical needs to $5 billion including priority needs. In 2012-13 it could be at least $1.1 billion and as much as $5.2 billion.
“This tells you that it would be a significant stretch to try to get to a budget level that we’re probably more used to seeing,” Baker said.
Florida’s current budget of $66.5 billion is about $5 billion less than the one Gov. Charlie Crist signed into law two years ago. That’s even though it’s fortified with $5.3 billion in federal stimulus money.
The state expects to have a similar amount of stimulus in next year’s budget, but it won’t be there the following year. That’s one reason why Baker is projecting budget gaps even though state revenues are expected to begin growing again next year. That’s after they have fallen for three straight years.
Most of the current-year, over-budget spending is in the state-federal Medicaid program — $225 million. The Voluntary Pre-kindergarten program needs $17.5 million more because enrollment has topped expectations while the Principal State School Trust Fund is facing a $38 million shortfall.
The state’s Risk Management Trust Fund also is short by $5.3 million due mainly to an unusually large settlement last month. The state agreed to pay nearly $4 million to two children for keeping them in a Hernando County home where they had been abused and starved by their foster parents.
The state can dip into reserves to cover those current-year needs and still have a $381.4 million cushion, Baker said.
Next year, though, the state is facing a $2.8 billion increase in critical needs that revenue growth will only partly offset, Baker said.
They include $515 million in additional general revenue for public schools to make up for a drop in property tax receipts and $1.6 billion for Medicaid to cover additional patients and make up for a falloff in federal stimulus money.
Baker’s forecast for other high priority needs next year totals $1.7 billion. It includes $498.5 million to increase public school spending by 2.87 percent per student and $250 million for aged, disabled and medically needy patients not covered by the basic Medicaid program.
“We always expected it was going to be a difficult and challenging budget year,” said Rep. David Rivera, a Miami Republican who chairs the commission. “You can expect the Florida Legislature to live within its means.”
In 2011-12, the state’s critical needs will include $1.2 billion for public schools to replace stimulus money they’ll be losing and another $1.1 billion for Medicaid.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
Amy Baker, coordinator of economic and demographic research, laid out that scenario for the Legislative Budget Commission. It’ll be part of a three-year financial outlook the panel will finalize when it meets again Sept. 15.
Baker said the state has sufficient reserves to cover $285.9 million in unbudgeted needs that now are expected during the current budget year, which runs through June 30.
But lawmakers are facing a potential deficit of $923 million to pay for critical needs, such as expenditures required by the Florida Constitution, court orders and federal law in the next budget year. The gap jumps to $2.6 billion if other high priority needs – those the Legislature has historically funded – are added.
For 2011-12, the budget gap could range from $2.3 billion for critical needs to $5 billion including priority needs. In 2012-13 it could be at least $1.1 billion and as much as $5.2 billion.
“This tells you that it would be a significant stretch to try to get to a budget level that we’re probably more used to seeing,” Baker said.
Florida’s current budget of $66.5 billion is about $5 billion less than the one Gov. Charlie Crist signed into law two years ago. That’s even though it’s fortified with $5.3 billion in federal stimulus money.
The state expects to have a similar amount of stimulus in next year’s budget, but it won’t be there the following year. That’s one reason why Baker is projecting budget gaps even though state revenues are expected to begin growing again next year. That’s after they have fallen for three straight years.
Most of the current-year, over-budget spending is in the state-federal Medicaid program — $225 million. The Voluntary Pre-kindergarten program needs $17.5 million more because enrollment has topped expectations while the Principal State School Trust Fund is facing a $38 million shortfall.
The state’s Risk Management Trust Fund also is short by $5.3 million due mainly to an unusually large settlement last month. The state agreed to pay nearly $4 million to two children for keeping them in a Hernando County home where they had been abused and starved by their foster parents.
The state can dip into reserves to cover those current-year needs and still have a $381.4 million cushion, Baker said.
Next year, though, the state is facing a $2.8 billion increase in critical needs that revenue growth will only partly offset, Baker said.
They include $515 million in additional general revenue for public schools to make up for a drop in property tax receipts and $1.6 billion for Medicaid to cover additional patients and make up for a falloff in federal stimulus money.
Baker’s forecast for other high priority needs next year totals $1.7 billion. It includes $498.5 million to increase public school spending by 2.87 percent per student and $250 million for aged, disabled and medically needy patients not covered by the basic Medicaid program.
“We always expected it was going to be a difficult and challenging budget year,” said Rep. David Rivera, a Miami Republican who chairs the commission. “You can expect the Florida Legislature to live within its means.”
In 2011-12, the state’s critical needs will include $1.2 billion for public schools to replace stimulus money they’ll be losing and another $1.1 billion for Medicaid.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
Sunday, September 6, 2009
83 Year Old First Time Home Buyer
At 83 years old, Alget Campbell isn’t as nimble as he used to be. His joints are a little rusty and he has some trouble getting around. On Monday, though, after he closed on his very first home, Campbell was doing cartwheels inside, his daughter said.
“Your own is your own,” said a satisfied Campbell, a native of Jamaica, who with his wife, Hermine, will move into their Miramar townhome in about a month. “I want something for myself. I don’t like to pay other people’s mortgages.”
After more than a year of looking with help from his daughter, Joan Grant, Campbell found the perfect home – a three-bedroom foreclosure about five minutes from family who will be able to keep closer watch on the elderly couple.
The closing price: $71,425 – minus the $8,000 first-time home buyer federal tax credit, of course.
Campbell’s monthly payments, including taxes and insurance, are about $550, an amount he can comfortably cover with Social Security, retirement savings and income from a rental property owned by his wife.
The couple will have to invest in a new air conditioner and replace the windows, but otherwise the property is in decent condition, said Campbell, who retired two years ago as a Publix clerk in Southwest Miami-Dade.
This is Campbell’s first home purchase, but his wife owned the home where the couple used to live.
As South Florida home prices continue sinking, buyers like Campbell are wading into a market offering the most affordable home prices in at least a decade.
Not since 1998 have houses been this cheap relative to family income in Miami-Dade County. In Broward, homes haven’t been as affordable since 1994, according to Moody’s Economy.com.
The new low-priced reality means many buyers can own for much less than it costs to rent, even before taking into account income tax deductions for mortgage interest, mortgage insurance and property taxes. As recent sales figures reflect, many are jumping at the opportunity.
Campbell, for one, said he didn’t think he could rent a three-bedroom, two-bathroom home in a similar subdivision for $550 a month. The home is about 1,300 square feet and has a one-car garage and a small yard.
“Housing affordability has increased so that the family earning the median family income can afford more than the median priced home in Miami-Dade, Broward and Palm Beach,” said Chris Lafakis, an economist with Moody’s who tracks Florida and South Florida.
Moody’s uses a proprietary index that factors in home prices, income and other financial variables like regional mortgage rates to gauge affordability.
An index value of 100 means a family of four earning the median income can afford to buy the median priced home. During the heyday of the housing boom as prices soared, the index plunged to an all-time low of 49 in Miami-Dade at the end of 2005, indicating the average family could scarcely afford half the price of a middling home.
In Broward, the record low of 63 occurred about the same time.
Since then, tumbling values have brought home ownership comfortably within reach of individuals such as Campbell.
At the end of the second quarter, the index, which excludes condominiums, hit 126 in Miami-Dade and 159 in Broward. This means a family earning the median income can afford to buy a home for 26 percent above the median price in Miami-Dade and a full 59 percent above the median price in Broward, giving them ample options.
At the end of the second quarter, the median home price was $195,000 in Miami-Dade and $195,500 in Broward, down 35 percent from the same quarter the year before, according to the Florida Association of Realtors.
There is currently a vast supply of homes listed below those prices.
Second-quarter median income statistics aren’t available yet, but at the end of March, the median income for a family of four in Miami-Dade was $50,150, and in Broward, $63,100.
While the low prices have spurred a flurry of new buying, the dramatic increase in affordability has not boosted sales to a corresponding level.
The reasons for that are tighter mortgage underwriting standards that are making it difficult for borrowers to qualify for financing. Despite his ability to put down 20 percent, Campbell said he had to jump through numerous hoops before lenders would qualify him.
Concerns that prices still have further to fall are also dampening demand.
“It’s a deflationary psychology that is self-reinforcing,” Lafakis said. “Home buyers expect house prices to fall, so they don’t buy. Then, because nobody is buying houses, prices do fall.”
Nonetheless, Marcia Pennant, Campbell’s real estate agent and a broker with Coldwell Banker’s Cooper City office, said new home buyers are motivated by the low prices, the tax credit and low interest rates.
“There are definitely more buyers at this time – the bank-owned properties are cheaper, the short-sales make them cheaper. That creates multiple offers in some situations on these homes,” Pennant said. “Some homes have more than one offer and sometimes as many as 20.”
As for Campbell, who is leaving his neighborhood of the past 17 years, he will miss visiting friends at the nearby Publix, where he worked for 17 years.
And then, there is his gardening.
“I am going to miss the ackee plants and banana trees and all those trees I planted from scratch,” Campbell said.
But he’s looking forward to his new backyard.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
“Your own is your own,” said a satisfied Campbell, a native of Jamaica, who with his wife, Hermine, will move into their Miramar townhome in about a month. “I want something for myself. I don’t like to pay other people’s mortgages.”
After more than a year of looking with help from his daughter, Joan Grant, Campbell found the perfect home – a three-bedroom foreclosure about five minutes from family who will be able to keep closer watch on the elderly couple.
The closing price: $71,425 – minus the $8,000 first-time home buyer federal tax credit, of course.
Campbell’s monthly payments, including taxes and insurance, are about $550, an amount he can comfortably cover with Social Security, retirement savings and income from a rental property owned by his wife.
The couple will have to invest in a new air conditioner and replace the windows, but otherwise the property is in decent condition, said Campbell, who retired two years ago as a Publix clerk in Southwest Miami-Dade.
This is Campbell’s first home purchase, but his wife owned the home where the couple used to live.
As South Florida home prices continue sinking, buyers like Campbell are wading into a market offering the most affordable home prices in at least a decade.
Not since 1998 have houses been this cheap relative to family income in Miami-Dade County. In Broward, homes haven’t been as affordable since 1994, according to Moody’s Economy.com.
The new low-priced reality means many buyers can own for much less than it costs to rent, even before taking into account income tax deductions for mortgage interest, mortgage insurance and property taxes. As recent sales figures reflect, many are jumping at the opportunity.
Campbell, for one, said he didn’t think he could rent a three-bedroom, two-bathroom home in a similar subdivision for $550 a month. The home is about 1,300 square feet and has a one-car garage and a small yard.
“Housing affordability has increased so that the family earning the median family income can afford more than the median priced home in Miami-Dade, Broward and Palm Beach,” said Chris Lafakis, an economist with Moody’s who tracks Florida and South Florida.
Moody’s uses a proprietary index that factors in home prices, income and other financial variables like regional mortgage rates to gauge affordability.
An index value of 100 means a family of four earning the median income can afford to buy the median priced home. During the heyday of the housing boom as prices soared, the index plunged to an all-time low of 49 in Miami-Dade at the end of 2005, indicating the average family could scarcely afford half the price of a middling home.
In Broward, the record low of 63 occurred about the same time.
Since then, tumbling values have brought home ownership comfortably within reach of individuals such as Campbell.
At the end of the second quarter, the index, which excludes condominiums, hit 126 in Miami-Dade and 159 in Broward. This means a family earning the median income can afford to buy a home for 26 percent above the median price in Miami-Dade and a full 59 percent above the median price in Broward, giving them ample options.
At the end of the second quarter, the median home price was $195,000 in Miami-Dade and $195,500 in Broward, down 35 percent from the same quarter the year before, according to the Florida Association of Realtors.
There is currently a vast supply of homes listed below those prices.
Second-quarter median income statistics aren’t available yet, but at the end of March, the median income for a family of four in Miami-Dade was $50,150, and in Broward, $63,100.
While the low prices have spurred a flurry of new buying, the dramatic increase in affordability has not boosted sales to a corresponding level.
The reasons for that are tighter mortgage underwriting standards that are making it difficult for borrowers to qualify for financing. Despite his ability to put down 20 percent, Campbell said he had to jump through numerous hoops before lenders would qualify him.
Concerns that prices still have further to fall are also dampening demand.
“It’s a deflationary psychology that is self-reinforcing,” Lafakis said. “Home buyers expect house prices to fall, so they don’t buy. Then, because nobody is buying houses, prices do fall.”
Nonetheless, Marcia Pennant, Campbell’s real estate agent and a broker with Coldwell Banker’s Cooper City office, said new home buyers are motivated by the low prices, the tax credit and low interest rates.
“There are definitely more buyers at this time – the bank-owned properties are cheaper, the short-sales make them cheaper. That creates multiple offers in some situations on these homes,” Pennant said. “Some homes have more than one offer and sometimes as many as 20.”
As for Campbell, who is leaving his neighborhood of the past 17 years, he will miss visiting friends at the nearby Publix, where he worked for 17 years.
And then, there is his gardening.
“I am going to miss the ackee plants and banana trees and all those trees I planted from scratch,” Campbell said.
But he’s looking forward to his new backyard.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
Friday, September 4, 2009
Mortgage rates edge down, still above record lows
Rates for 30-year home loans edged down this week, remaining close to record lows reached over the spring.
The average rate for a 30-year fixed mortgage was 5.08 percent, down from 5.14 percent a week earlier, mortgage company Freddie Mac said Thursday. Rates, while above the record low of 4.78 percent hit in the spring, are still at attractive levels for people looking to buy a home or refinance.
“Low mortgage rates are helping to keep housing very affordable,” Frank Nothaft, Freddie Mac’s chief economist, said in a statement.
To revive the economy, the Federal Reserve is spending $1.25 trillion on mortgage-backed securities, which has driven down rates on home loans. That money is set to run out by winter, though some analysts expect the central bank to gradually scale back its purchases, allowing the program to last longer.
Despite government efforts to prop up the mortgage market, qualifying for a loan is still tough. Lenders have tightened their standards dramatically, so the best rates are available to those with solid credit and a 20 percent down payment.
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 fell to 4.54 percent, from 4.58 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.59 percent, down from 4.67 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.62 percent from 4.69 percent.
The rates do not include add-on fees known as points. The nationwide fee for all loans in Freddie Mac’s survey averaged 0.7 point for 30-year loans and 0.6 point for 15-year, five-year and one-year loans.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
The average rate for a 30-year fixed mortgage was 5.08 percent, down from 5.14 percent a week earlier, mortgage company Freddie Mac said Thursday. Rates, while above the record low of 4.78 percent hit in the spring, are still at attractive levels for people looking to buy a home or refinance.
“Low mortgage rates are helping to keep housing very affordable,” Frank Nothaft, Freddie Mac’s chief economist, said in a statement.
To revive the economy, the Federal Reserve is spending $1.25 trillion on mortgage-backed securities, which has driven down rates on home loans. That money is set to run out by winter, though some analysts expect the central bank to gradually scale back its purchases, allowing the program to last longer.
Despite government efforts to prop up the mortgage market, qualifying for a loan is still tough. Lenders have tightened their standards dramatically, so the best rates are available to those with solid credit and a 20 percent down payment.
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 fell to 4.54 percent, from 4.58 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.59 percent, down from 4.67 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.62 percent from 4.69 percent.
The rates do not include add-on fees known as points. The nationwide fee for all loans in Freddie Mac’s survey averaged 0.7 point for 30-year loans and 0.6 point for 15-year, five-year and one-year loans.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
Wednesday, May 13, 2009
Federal Program To Help First Time Buyers Use Tax Credit As Downpayment.
First-time homebuyers will soon have another option if they want to use their $8,000 tax credit toward a downpayment. On the tails of a Florida-created program that Gov. Charlie Crist is expected to sign into law, the federal government announced its own downpayment assistance program at the National Association of Realtors® Midyear Legislative Meetings & Trade Expo taking place this week in Washington, D.C.
While the tax credit applies to “first-time homebuyers,” the term is misleading. In general, anyone who hasn’t owned a home for the past three years is considered a first-timer under the program. Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development (HUD), hopes to have additional details available within a few days, though it’s still unclear how soon homebuyers can apply for the credit.
Donovan said that the Federal Housing Administration (FHA) would allow its lenders to credit homeowners up to $8,000. He made the announcement to several thousand Realtors yesterday at a special daylong session called, The Real Estate Summit: Advancing the U.S. Economy.
“We all want to enable FHA consumers to access the homebuyer tax credit funds when they close on their home loans, so that the cash can be used as a downpayment,” Donovan said. According to Donovan, FHA approved lenders will be permitted to “monetize” the tax credit by using short-term bridge loans. Donovan also said that more will be done, and the Obama administration plans to further stabilize the housing market.
“I do think we have some early signs that the market overall is stabilizing,” said Donovan. “Since January, we’ve seen both home sales moving up and down around a relatively stable number, and we are seeing the first signs that the rapid decline in home prices is starting to abate.”
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
© 2009 FLORIDA ASSOCIATION OF REALTORS®
While the tax credit applies to “first-time homebuyers,” the term is misleading. In general, anyone who hasn’t owned a home for the past three years is considered a first-timer under the program. Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development (HUD), hopes to have additional details available within a few days, though it’s still unclear how soon homebuyers can apply for the credit.
Donovan said that the Federal Housing Administration (FHA) would allow its lenders to credit homeowners up to $8,000. He made the announcement to several thousand Realtors yesterday at a special daylong session called, The Real Estate Summit: Advancing the U.S. Economy.
“We all want to enable FHA consumers to access the homebuyer tax credit funds when they close on their home loans, so that the cash can be used as a downpayment,” Donovan said. According to Donovan, FHA approved lenders will be permitted to “monetize” the tax credit by using short-term bridge loans. Donovan also said that more will be done, and the Obama administration plans to further stabilize the housing market.
“I do think we have some early signs that the market overall is stabilizing,” said Donovan. “Since January, we’ve seen both home sales moving up and down around a relatively stable number, and we are seeing the first signs that the rapid decline in home prices is starting to abate.”
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Monday, May 11, 2009
Florida Homeowners Insurance Rate Increase
With the official start of the 2009 hurricane season only three weeks away, Florida property owners can anticipate higher homeowners insurance rates.
New legislation approved by the Florida Legislature more than a week ago would raise rates 10 percent for homeowners covered by Citizens, the state-run insurer. Gov. Charlie Crist is expected to sign it into law.
Privately held insurance companies can also pass on the cost of back-up reinsurance to their policyholders, up to 10 percent a year, under the legislation.
Sen. Mike Fasano, R-New Port Richey, said Friday he can’t speak for the governor but said the governor’s office has indicated to him that it feels better about the bill after changes were made in the Senate and in conference with House members.
Fasano helped amend the bill, reducing the 20 percent increase that was initially proposed for Citizens policyholders and making sure the bill didn’t contain “only provisions that were overwhelmingly in favor of the insurance industry.”
For Citizens policyholders, the increase would be a flat 10 percent of their current premium, regardless of where their homes are located and whether they have only windstorm coverage from the company or a policy that includes fire and theft protection. The increase would hit when their policies renew next year.
The 10 percent annual increases would continue until Citizens rates are actuarially sound. That means the company is accumulating enough from premiums to pay for possible future claims.
“It’s not a matter of greed. It’s necessary,” says Dulce Suarez-Resnick, a personal lines agent at Brown & Brown’s HBA Division in Miami.
“I’m encouraged the Legislature took some responsible steps to lower Florida’s hurricane insurance risk this session,” Alex Sink, Florida’s chief financial officer, said in a statement referring to provisions in the proposed insurance law.
The legislation allows Citizens to raise its rates gradually and reduces the size of the Florida Hurricane Catastrophe Fund, which sells back-up insurance to the carriers operating in Florida.
Bill aids insurers
Regulators expect private carriers to take advantage of the legislation’s provisions as soon as they put in place their reinsurance coverage for this hurricane season. So some Florida policyholders could see these increases if they renew their policies later this year.
Some lawmakers, regulators, insurers, agents and business groups argued that higher rates are needed because Citizens doesn’t have enough money to pay all the claims it might see if a massive storm were to hit the state.
Why would Citizens see a shortfall? Its rates have been frozen since the start of 2007, yet it has continued to provide insurance coverage for risky properties in coastal areas, such as older homes and condominium buildings that many private insurers prefer not to insure.
Of course, these likely insurance rate increases come as the recession has hit Florida hard. Consumers, many unemployed or taking pay cuts to keep their jobs, are hard-pressed to cover household costs, including insurance, at current levels.
Owner’s costs triple
William Ycikson, a Miami Beach homeowner, has seen his windstorm premiums nearly triple after the eight hurricanes that hit Florida in 2004 and 2005. “I can’t see paying more.”
Ycikson, who is self-employed, is toying with the possibility of dropping his windstorm coverage since he has paid off his mortgage and the coverage isn’t required. He also faces a tough decision: Help his retired father cover a higher insurance bill or advise him to forego hurricane coverage as well.
It’s a risky move, but one that many Floridians are weighing to keep their insurance costs down. Without windstorm insurance, repairing any damage to their homes caused by a hurricane would have to be covered by Ycikson or his father, who also lives in Miami Beach.
If a major hurricane hits a densely populated section of the state such as South Florida or Tampa Bay, both Citizens and the Florida Hurricane Catastrophe Fund could face substantial shortfalls.
The big concern among insurance regulators in Tallahassee and business people around the state is that such a deficit would have to be covered by all Florida policyholders through one or more surcharges.
‘Tax’ is assessed
“What this means for Floridians – those who own a home, business or auto policy – is that we will be stuck with assessed ‘hurricane taxes’ that can be tacked onto our policies for years to come,” says Barney Bishop, executive director of Associated Industries of Florida, a business lobbying group.
Several surcharges to cover deficits from the 2004 and 2005 storms are now added to almost all insurance policies in Florida, except worker compensation and medical malpractice policies, and will remain for at least another five years.
Groups backed bill
Associated Industries, the Florida Chamber of Commerce, other business groups and some nonprofit organizations lobbied hard to be sure the new insurance legislation reduced risk for the CAT Fund and allowed Citizens to raise its rates.
“It’s a vicious circle. We have more people coming for help and we have fewer donations to help them,” Sheila Hopkins, associate director for social concerns/respect life for the Florida Catholic Conference. She says surcharges on insurance that her organization must pay out of its operating budget take away funds that could be used to provide social services.
The new legislation reverses changes made in early 2007 after a special legislative session expanded the CAT Fund. Urged on by newly elected Gov. Crist, lawmakers hoped the savings from additional, less-expensive reinsurance companies could buy from the CAT Fund would be passed on to policyholders as lower rates.
Many homeowners did see at least a small drop in rates. Also, a requirement that insurers double the mitigation credits given to homeowners who add hurricane shutters or reinforce garage doors also provided savings on insurance premiums.
Meltdown has impact
But the meltdown of the financial markets has reduced the ability of the CAT Fund and Citizens to sell bonds to provide the cash needed to pay claims after a massive storm.
The new Florida legislation reduces the amount of reinsurance the CAT Fund can sell by $2 billion a year through 2013, thus reducing the risk the fund faces. The legislation would require insurers to pay additional premiums over the next five years to build reserves in the fund more rapidly. Citizens would be allowed to increase its rates 1 percent annually during this time to recover the cost of extra payments it will be making to the CAT Fund.
Even insurance agents aren’t immune to pain of rising costs and shrinking incomes. Suarez-Resnick says she is in the process of refinancing her mortgage because she knows that her homeowners policy premiums will be going up next year. Staffing at her agency has been cut nearly 10 percent and salaries reduced in the past year.
Nestor Rivero, who owns Tropical Insurance in West Miami-Dade, says he had to cut support staff to eight employees from 11, including laying off the receptionist who had worked for him for 21 years.
“This is absolutely the worst time to have to absorb an increase,” says Suarez-Resnick.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
Copyright © 2009 The Miami Herald
New legislation approved by the Florida Legislature more than a week ago would raise rates 10 percent for homeowners covered by Citizens, the state-run insurer. Gov. Charlie Crist is expected to sign it into law.
Privately held insurance companies can also pass on the cost of back-up reinsurance to their policyholders, up to 10 percent a year, under the legislation.
Sen. Mike Fasano, R-New Port Richey, said Friday he can’t speak for the governor but said the governor’s office has indicated to him that it feels better about the bill after changes were made in the Senate and in conference with House members.
Fasano helped amend the bill, reducing the 20 percent increase that was initially proposed for Citizens policyholders and making sure the bill didn’t contain “only provisions that were overwhelmingly in favor of the insurance industry.”
For Citizens policyholders, the increase would be a flat 10 percent of their current premium, regardless of where their homes are located and whether they have only windstorm coverage from the company or a policy that includes fire and theft protection. The increase would hit when their policies renew next year.
The 10 percent annual increases would continue until Citizens rates are actuarially sound. That means the company is accumulating enough from premiums to pay for possible future claims.
“It’s not a matter of greed. It’s necessary,” says Dulce Suarez-Resnick, a personal lines agent at Brown & Brown’s HBA Division in Miami.
“I’m encouraged the Legislature took some responsible steps to lower Florida’s hurricane insurance risk this session,” Alex Sink, Florida’s chief financial officer, said in a statement referring to provisions in the proposed insurance law.
The legislation allows Citizens to raise its rates gradually and reduces the size of the Florida Hurricane Catastrophe Fund, which sells back-up insurance to the carriers operating in Florida.
Bill aids insurers
Regulators expect private carriers to take advantage of the legislation’s provisions as soon as they put in place their reinsurance coverage for this hurricane season. So some Florida policyholders could see these increases if they renew their policies later this year.
Some lawmakers, regulators, insurers, agents and business groups argued that higher rates are needed because Citizens doesn’t have enough money to pay all the claims it might see if a massive storm were to hit the state.
Why would Citizens see a shortfall? Its rates have been frozen since the start of 2007, yet it has continued to provide insurance coverage for risky properties in coastal areas, such as older homes and condominium buildings that many private insurers prefer not to insure.
Of course, these likely insurance rate increases come as the recession has hit Florida hard. Consumers, many unemployed or taking pay cuts to keep their jobs, are hard-pressed to cover household costs, including insurance, at current levels.
Owner’s costs triple
William Ycikson, a Miami Beach homeowner, has seen his windstorm premiums nearly triple after the eight hurricanes that hit Florida in 2004 and 2005. “I can’t see paying more.”
Ycikson, who is self-employed, is toying with the possibility of dropping his windstorm coverage since he has paid off his mortgage and the coverage isn’t required. He also faces a tough decision: Help his retired father cover a higher insurance bill or advise him to forego hurricane coverage as well.
It’s a risky move, but one that many Floridians are weighing to keep their insurance costs down. Without windstorm insurance, repairing any damage to their homes caused by a hurricane would have to be covered by Ycikson or his father, who also lives in Miami Beach.
If a major hurricane hits a densely populated section of the state such as South Florida or Tampa Bay, both Citizens and the Florida Hurricane Catastrophe Fund could face substantial shortfalls.
The big concern among insurance regulators in Tallahassee and business people around the state is that such a deficit would have to be covered by all Florida policyholders through one or more surcharges.
‘Tax’ is assessed
“What this means for Floridians – those who own a home, business or auto policy – is that we will be stuck with assessed ‘hurricane taxes’ that can be tacked onto our policies for years to come,” says Barney Bishop, executive director of Associated Industries of Florida, a business lobbying group.
Several surcharges to cover deficits from the 2004 and 2005 storms are now added to almost all insurance policies in Florida, except worker compensation and medical malpractice policies, and will remain for at least another five years.
Groups backed bill
Associated Industries, the Florida Chamber of Commerce, other business groups and some nonprofit organizations lobbied hard to be sure the new insurance legislation reduced risk for the CAT Fund and allowed Citizens to raise its rates.
“It’s a vicious circle. We have more people coming for help and we have fewer donations to help them,” Sheila Hopkins, associate director for social concerns/respect life for the Florida Catholic Conference. She says surcharges on insurance that her organization must pay out of its operating budget take away funds that could be used to provide social services.
The new legislation reverses changes made in early 2007 after a special legislative session expanded the CAT Fund. Urged on by newly elected Gov. Crist, lawmakers hoped the savings from additional, less-expensive reinsurance companies could buy from the CAT Fund would be passed on to policyholders as lower rates.
Many homeowners did see at least a small drop in rates. Also, a requirement that insurers double the mitigation credits given to homeowners who add hurricane shutters or reinforce garage doors also provided savings on insurance premiums.
Meltdown has impact
But the meltdown of the financial markets has reduced the ability of the CAT Fund and Citizens to sell bonds to provide the cash needed to pay claims after a massive storm.
The new Florida legislation reduces the amount of reinsurance the CAT Fund can sell by $2 billion a year through 2013, thus reducing the risk the fund faces. The legislation would require insurers to pay additional premiums over the next five years to build reserves in the fund more rapidly. Citizens would be allowed to increase its rates 1 percent annually during this time to recover the cost of extra payments it will be making to the CAT Fund.
Even insurance agents aren’t immune to pain of rising costs and shrinking incomes. Suarez-Resnick says she is in the process of refinancing her mortgage because she knows that her homeowners policy premiums will be going up next year. Staffing at her agency has been cut nearly 10 percent and salaries reduced in the past year.
Nestor Rivero, who owns Tropical Insurance in West Miami-Dade, says he had to cut support staff to eight employees from 11, including laying off the receptionist who had worked for him for 21 years.
“This is absolutely the worst time to have to absorb an increase,” says Suarez-Resnick.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
Copyright © 2009 The Miami Herald
Tuesday, May 5, 2009
Florida's Recovery Is Heating Up
After two long years of recession, economists are beginning to see signs that the economy’s recovery is finally in sight. South Florida home sales are picking up, Wall Street has staged some solid rallies and even consumer confidence is rising.
But the road to recovery will be uneven. Economists say that an uptick in business spending will lead the way, followed by federal government stimulus projects that will create some jobs. Consumers, unfortunately, are likely to be the last to see good times return, because widespread unemployment – which is now just a notch below 10 percent – won’t start to go down until after the recovery is well under way.
It has been rough, but economists say it’s always that way for Florida.
“It performs better in good times, but during bad times, in recessions, it is one of the worst performing states in the nation,” said Moody’s Economy.com economist Chris Lafakis. “And during times of expansion it is one of the best.”
Some experts say they already see the early signs of such progress.
“The negative numbers just start getting smaller or they stop falling or they fall at a slower rate,” said SunTrust Chief Economist Gregory Miller. It’s like you tumbled out of a boat a while ago and “now we’re at the stage of swimming back to the surface.”
Other economists agree that the worst may be over as soon as this summer. Consumers surely have had enough, judging by the strong jump in Floridians’ consumer confidence this month.
Here’s how economists say the state will find its way out of the slump:
Business-led recovery
Economists say the recovery will begin with an increase in business capital spending, as companies rebuild inventories or upgrade technology or send business travelers back out on the road.
At some South Florida companies, capital spending already has increased and begun to pay off. Last year, Stress Free Corporate Housing, which provides temporary living arrangements for executives, says the audio-visual equipment it installed in its new Weston office is helping to bring in new business.
The firm wanted to hold employee conferences and save on travel expenses. But it also began using the equipment for Webinars – seminars via the Internet – for its clients.
President and Chief Executive Officer Darin Karp said his firm is about to sign a deal with a Fortune 500 company to provide temporary housing for executives from Asia and the Middle East who need to come to Florida for training.
“We’re definitely seeing glimmers of hope off the first quarter and the beginning of this quarter,” Karp said. “We have some big stuff on our plate, and it’s attributed to doing the Webinars.”
Stimulus spending
An increase in government spending is expected in the fourth quarter, as states and cities pump out the $787 billion in federal stimulus money to build roads and other projects. That influx of cash will lead to more jobs, at least in construction.
Even though the stimulus law was enacted in February, government is still crafting detailed plans and regulations for the federal package, so it’s unclear precisely how many millions will be earmarked for Florida.
“We will begin to see some impact of the stimulus legislation in the last quarter of this year,” said economist Antonio Villamil, dean of the School of Business at St. Thomas University.
Confidence rises
Consumer confidence – a measure of how willing people are to spend on big-ticket items – is already rising. The University of Florida consumer confidence survey issued earlier this week showed the index jumped to 71 in April, up from 65 in March, which is close to the low reached during the last recession in 1991.
The importance of the jump is that consumer confidence is a forward-looking economic indicator, one that is often a sign that consumer spending will rise, too.
Employment to lag
Employment rates aren’t expected to rise until recovery of other sectors is under way. Only after growth returns in the overall economy will businesses be comfortable enough to begin to create jobs again. Employment is key to consumers’ recovery. Don’t look for consumer spending to increase until after employment stabilizes, economists say.
“Every business cycle is unique, but they get going in fits and starts,” said economist Manuel Lasaga, president of Strategic Information Analysis in Miami. “This [recovery] will be weaker than normal.” Strong growth, he said, won’t appear until 2010.
And some sectors seem to be hurt so badly, their recovery is not at hand. Surely, housing remains deeply troubled. Manufacturing, too, is waiting for signs of recovery.
“We’re not seeing that [any increase in demand] yet frankly,” said Tom Kennedy, a CPA who is chairman of the South Florida Manufacturers Association. Kennedy is controller of R.L. Schreiber in Pompano Beach, which produces food products for the food service industry. The credit crunch, he said, is making the business environment even more difficult.
When will it end? The economy should begin to pull out of recession around the end of summer, according to several economists. At the latest, look for it early next year, others say.
“We are in the fourth phase of the recession,” said SunTrust’s Miller. That’s the pre-recovery phase, he said. Next is the turnaround.
It’s a little early yet, and the signs are still faint.
“You really have to look long and hard to find any signs of strength in the economy,” said Mark Vitner, Wachovia’s senior economist. “But it’s not so hard to find areas where the economy had been in a free fall and now is just merely declining.”
For those businesses looking forward to the turnaround, they’ve set their sights on year’s end.
“People are getting new budgets for purchasing at the end of the third quarter, the fourth quarter. A lot of lights are coming on,” said Joel Ledlow, chief executive officer of ScheduAll, a Hollywood firm that produces management software systems for broadcasters and media. “People are saying they have cut about as much as they can cut. Now they’re ready for some very strategic investments.”
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 Sun Sentinel
But the road to recovery will be uneven. Economists say that an uptick in business spending will lead the way, followed by federal government stimulus projects that will create some jobs. Consumers, unfortunately, are likely to be the last to see good times return, because widespread unemployment – which is now just a notch below 10 percent – won’t start to go down until after the recovery is well under way.
It has been rough, but economists say it’s always that way for Florida.
“It performs better in good times, but during bad times, in recessions, it is one of the worst performing states in the nation,” said Moody’s Economy.com economist Chris Lafakis. “And during times of expansion it is one of the best.”
Some experts say they already see the early signs of such progress.
“The negative numbers just start getting smaller or they stop falling or they fall at a slower rate,” said SunTrust Chief Economist Gregory Miller. It’s like you tumbled out of a boat a while ago and “now we’re at the stage of swimming back to the surface.”
Other economists agree that the worst may be over as soon as this summer. Consumers surely have had enough, judging by the strong jump in Floridians’ consumer confidence this month.
Here’s how economists say the state will find its way out of the slump:
Business-led recovery
Economists say the recovery will begin with an increase in business capital spending, as companies rebuild inventories or upgrade technology or send business travelers back out on the road.
At some South Florida companies, capital spending already has increased and begun to pay off. Last year, Stress Free Corporate Housing, which provides temporary living arrangements for executives, says the audio-visual equipment it installed in its new Weston office is helping to bring in new business.
The firm wanted to hold employee conferences and save on travel expenses. But it also began using the equipment for Webinars – seminars via the Internet – for its clients.
President and Chief Executive Officer Darin Karp said his firm is about to sign a deal with a Fortune 500 company to provide temporary housing for executives from Asia and the Middle East who need to come to Florida for training.
“We’re definitely seeing glimmers of hope off the first quarter and the beginning of this quarter,” Karp said. “We have some big stuff on our plate, and it’s attributed to doing the Webinars.”
Stimulus spending
An increase in government spending is expected in the fourth quarter, as states and cities pump out the $787 billion in federal stimulus money to build roads and other projects. That influx of cash will lead to more jobs, at least in construction.
Even though the stimulus law was enacted in February, government is still crafting detailed plans and regulations for the federal package, so it’s unclear precisely how many millions will be earmarked for Florida.
“We will begin to see some impact of the stimulus legislation in the last quarter of this year,” said economist Antonio Villamil, dean of the School of Business at St. Thomas University.
Confidence rises
Consumer confidence – a measure of how willing people are to spend on big-ticket items – is already rising. The University of Florida consumer confidence survey issued earlier this week showed the index jumped to 71 in April, up from 65 in March, which is close to the low reached during the last recession in 1991.
The importance of the jump is that consumer confidence is a forward-looking economic indicator, one that is often a sign that consumer spending will rise, too.
Employment to lag
Employment rates aren’t expected to rise until recovery of other sectors is under way. Only after growth returns in the overall economy will businesses be comfortable enough to begin to create jobs again. Employment is key to consumers’ recovery. Don’t look for consumer spending to increase until after employment stabilizes, economists say.
“Every business cycle is unique, but they get going in fits and starts,” said economist Manuel Lasaga, president of Strategic Information Analysis in Miami. “This [recovery] will be weaker than normal.” Strong growth, he said, won’t appear until 2010.
And some sectors seem to be hurt so badly, their recovery is not at hand. Surely, housing remains deeply troubled. Manufacturing, too, is waiting for signs of recovery.
“We’re not seeing that [any increase in demand] yet frankly,” said Tom Kennedy, a CPA who is chairman of the South Florida Manufacturers Association. Kennedy is controller of R.L. Schreiber in Pompano Beach, which produces food products for the food service industry. The credit crunch, he said, is making the business environment even more difficult.
When will it end? The economy should begin to pull out of recession around the end of summer, according to several economists. At the latest, look for it early next year, others say.
“We are in the fourth phase of the recession,” said SunTrust’s Miller. That’s the pre-recovery phase, he said. Next is the turnaround.
It’s a little early yet, and the signs are still faint.
“You really have to look long and hard to find any signs of strength in the economy,” said Mark Vitner, Wachovia’s senior economist. “But it’s not so hard to find areas where the economy had been in a free fall and now is just merely declining.”
For those businesses looking forward to the turnaround, they’ve set their sights on year’s end.
“People are getting new budgets for purchasing at the end of the third quarter, the fourth quarter. A lot of lights are coming on,” said Joel Ledlow, chief executive officer of ScheduAll, a Hollywood firm that produces management software systems for broadcasters and media. “People are saying they have cut about as much as they can cut. Now they’re ready for some very strategic investments.”
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 Sun Sentinel
Monday, May 4, 2009
Pending Home Sales Are Up
Pending home sales rose in March with many first-time buyers taking advantage of historically good housing affordability conditions, according to the National Association of Realtors® (NAR).
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82.0 in February, and it’s 1.1 percent higher than March 2008’s 83.7.
“This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment,” says Lawrence Yun, NAR chief economist. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”
NAR’s Housing Affordability Index remained near record highs. The affordability index was 166.7 in March – down from an upwardly revised record of 174.4 in February due to higher home prices in March. The index remains 30.8 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income. Tracking began in 1970.
The Pending Home Sales Index in the South rose 8.5 percent to 93.2 in March and is 7.7 percent above a year ago. In the West the index increased 3.9 percent to 93.1 and is 1.7 percent higher than March 2008. The index in the Northeast fell 5.7 percent to 59.5 in March and is 24.1 percent below a year ago. In the Midwest the index slipped 1.0 percent to 82.3 but is 8.2 percent higher than March 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the increase in buying power is quite remarkable. “Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment,” he said. “For buyers who’ve been on the sidelines and have good jobs, the market has never looked more favorable. Homeownership has always offered immediate benefits and long-term value, but the advantages in today’s market are unique.”
A median-income family, earning $61,100, could afford a home costing $291,600 in March with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of that amount. The affordable price was notably higher than the median existing single-family home price in March, which was $174,900.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
© 2009 FLORIDA ASSOCIATION OF REALTORS®
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82.0 in February, and it’s 1.1 percent higher than March 2008’s 83.7.
“This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment,” says Lawrence Yun, NAR chief economist. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”
NAR’s Housing Affordability Index remained near record highs. The affordability index was 166.7 in March – down from an upwardly revised record of 174.4 in February due to higher home prices in March. The index remains 30.8 percentage points higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income. Tracking began in 1970.
The Pending Home Sales Index in the South rose 8.5 percent to 93.2 in March and is 7.7 percent above a year ago. In the West the index increased 3.9 percent to 93.1 and is 1.7 percent higher than March 2008. The index in the Northeast fell 5.7 percent to 59.5 in March and is 24.1 percent below a year ago. In the Midwest the index slipped 1.0 percent to 82.3 but is 8.2 percent higher than March 2008.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the increase in buying power is quite remarkable. “Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment,” he said. “For buyers who’ve been on the sidelines and have good jobs, the market has never looked more favorable. Homeownership has always offered immediate benefits and long-term value, but the advantages in today’s market are unique.”
A median-income family, earning $61,100, could afford a home costing $291,600 in March with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of that amount. The affordable price was notably higher than the median existing single-family home price in March, which was $174,900.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Friday, May 1, 2009
State Farm Requests Exit Meeting From Florida
State regulators have granted State Farm’s request to appeal the state-approved plan for the company’s withdrawal from Florida’s property insurance market.
The dispute between State Farm, Florida’s largest private property insurer, and the Office of Insurance Regulation has been referred to a judge at the state Division of Administrative Hearings.
In January, State Farm announced plans to drop all 1.2 million property insurance policies, including 700,000 homeowners, over two years. The announcement came after state regulators rejected the company’s request to raise rates 47 percent on average statewide.
The dispute centers on the way State Farm will shed those policies.
The state-approved plan requires State Farm to sell the policies to other private insurers and bars the company from dumping any policies into state-run Citizens Property Insurance Corp., Florida’s insurer of last resort.
But company policy prohibits State Farm agents from offering services to other private insurers. Agents can offer services only for State Farm and Citizens. State Farm said the practice is a major element of the company’s business model and isn’t willing to abandon it.
Allowing State Farm agents to offer services to other private insurers would impair the success of State Farm’s marketing program, the company says in its appeal of the state-approved plan.
Insurance regulation officials say the state’s plan would keep Citizens, already bloated with 1.1 million policies, from getting bigger. If Citizens gets bigger, the risk of taxpayers bearing the cost of a major hurricane would grow because all Florida policyholders can be assessed a surcharge to pay Citizens’ claims if it runs out of money.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 Tampa Tribune, Fla.
The dispute between State Farm, Florida’s largest private property insurer, and the Office of Insurance Regulation has been referred to a judge at the state Division of Administrative Hearings.
In January, State Farm announced plans to drop all 1.2 million property insurance policies, including 700,000 homeowners, over two years. The announcement came after state regulators rejected the company’s request to raise rates 47 percent on average statewide.
The dispute centers on the way State Farm will shed those policies.
The state-approved plan requires State Farm to sell the policies to other private insurers and bars the company from dumping any policies into state-run Citizens Property Insurance Corp., Florida’s insurer of last resort.
But company policy prohibits State Farm agents from offering services to other private insurers. Agents can offer services only for State Farm and Citizens. State Farm said the practice is a major element of the company’s business model and isn’t willing to abandon it.
Allowing State Farm agents to offer services to other private insurers would impair the success of State Farm’s marketing program, the company says in its appeal of the state-approved plan.
Insurance regulation officials say the state’s plan would keep Citizens, already bloated with 1.1 million policies, from getting bigger. If Citizens gets bigger, the risk of taxpayers bearing the cost of a major hurricane would grow because all Florida policyholders can be assessed a surcharge to pay Citizens’ claims if it runs out of money.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 Tampa Tribune, Fla.
Thursday, April 30, 2009
30 Days Until Hurricane Season
The Atlantic hurricane season starts June 1 – 30 days from now. Since flood insurance takes 30 days to become effective after a homeowner applies, today marks Floridians last chance to get flood insurance by the June 1 debut.
“Past hurricane seasons have shown that storms can form as early as the beginning of June, so property owners can’t afford to wait to buy flood insurance,” says Ed Connor, acting federal insurance administrator and acting assistant administrator, FEMA Mitigation Directorate.
Many homeowners still wrongly believe that their property insurance policy will cover all damage from a hurricane.
“Homeowners insurance doesn’t cover flood damage and, without flood insurance, property owners may have to absorb the financial losses on their own,” says Connor. “Just a few inches of water can cost thousands of dollars in repairs and, in this economy, few can afford that potential drain on their savings.”
Flood insurance is available through about 85 insurance companies in approximately 20,600 participating communities nationwide. National flood insurance is available to renters, business owners and homeowners, even if it is not required by the terms of a mortgage. While the average flood insurance policy costs about $540 a year, homeowners can protect their properties in moderate-to low-risk areas with lower cost Preferred Risk Policies (PRPs) that start at just $119 a year.
Individuals can learn how to prepare for floods, how to purchase a flood insurance policy and the benefits of protecting their properties against flooding by visiting Floodsmart.gov (http://www.floodsmart.gov) or calling (800) 427-2419.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
© 2009 FLORIDA ASSOCIATION OF REALTORS®
“Past hurricane seasons have shown that storms can form as early as the beginning of June, so property owners can’t afford to wait to buy flood insurance,” says Ed Connor, acting federal insurance administrator and acting assistant administrator, FEMA Mitigation Directorate.
Many homeowners still wrongly believe that their property insurance policy will cover all damage from a hurricane.
“Homeowners insurance doesn’t cover flood damage and, without flood insurance, property owners may have to absorb the financial losses on their own,” says Connor. “Just a few inches of water can cost thousands of dollars in repairs and, in this economy, few can afford that potential drain on their savings.”
Flood insurance is available through about 85 insurance companies in approximately 20,600 participating communities nationwide. National flood insurance is available to renters, business owners and homeowners, even if it is not required by the terms of a mortgage. While the average flood insurance policy costs about $540 a year, homeowners can protect their properties in moderate-to low-risk areas with lower cost Preferred Risk Policies (PRPs) that start at just $119 a year.
Individuals can learn how to prepare for floods, how to purchase a flood insurance policy and the benefits of protecting their properties against flooding by visiting Floodsmart.gov (http://www.floodsmart.gov) or calling (800) 427-2419.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Tuesday, April 28, 2009
U.S. Consumer Confidence Is Up In April
Hopeful signs that the worst may be over for the economy boosted Americans’ moods in April, sending a closely watched barometer of sentiment to the highest level since November.
The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest level since November’s 44.7 and well surpasses economists’ expectations for 29.5.
The consumer confidence survey showed a substantial improvement in consumers’ short-term outlook, including even their assessment of the job picture.
Some encouraging news in areas like retail sales and housing have helped fuel a recent stock rally. Earlier Tuesday, a housing index showed that home prices dropped sharply in February, but for the first time in 25 months the decline was not a record – another sign the housing crisis could be bottoming.
Economists closely monitor consumer sentiment because consumer spending accounts for more than two-thirds of economic activity.
The huge jump in confidence follows a small increase in March, following a freefall in February. Still, the index remains well below year-ago levels of 62.8.
The April gains were fueled by “a significant improvement in the short-term outlook,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.
She added that the index measuring how shoppers feel now, which posted a moderate gain, offered “a sign that conditions have not deteriorated further and may even moderately improve in the second quarter.”
The Present Situation rose slightly to 23.7 from 21.9 last month. The Expectations Index, which measures how shoppers feel about the economy over the next six months, skyrocketed to 49.5 from 30.2 in March.
That sharp increase – which marked the largest jump since a 13-point gain in November 2005 when the economy was recovering from Hurricanes Katrina and Rita – suggests that people believe the economy is nearing a bottom, Franco said. Still, she noted that the index remains well below the level associated with strong economic growth.
“It looks like the worst is behind us, but clearly we are not out of the woods,” said Franco.
With companies continuing to lay off workers, a major fear is that people will cut back their spending even more, and that could plunge the economy further into a downward spiral. Economists expect the unemployment rate – now at 8.5 percent and the highest since late 1983 – will hit 10 percent by the end of the year and keep climbing next year before it starts coming down.
Meanwhile, investors are becoming more unsettled by the possibility of a major swine flu outbreak, which could stall economic recovery — particularly in regions that depend on travel and tourism. Adam York, an economist at Wachovia Securities, said such a development could dampen confidence levels for May, but it’s still early to tell.
The consumer confidence survey showed that those anticipating business conditions will worsen over the next six months declined to 25.3 percent from 37.8 percent, while those expecting conditions to improve increased to 15.6 percent from 9.6 percent in March.
The employment outlook was also considerably less pessimistic. The percentage of consumers anticipating fewer jobs in the months ahead declined to 33.6 percent from 41.6 percent, while those expecting more jobs increased to 13.9 percent from 7.3 percent.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 The Associated Press
The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest level since November’s 44.7 and well surpasses economists’ expectations for 29.5.
The consumer confidence survey showed a substantial improvement in consumers’ short-term outlook, including even their assessment of the job picture.
Some encouraging news in areas like retail sales and housing have helped fuel a recent stock rally. Earlier Tuesday, a housing index showed that home prices dropped sharply in February, but for the first time in 25 months the decline was not a record – another sign the housing crisis could be bottoming.
Economists closely monitor consumer sentiment because consumer spending accounts for more than two-thirds of economic activity.
The huge jump in confidence follows a small increase in March, following a freefall in February. Still, the index remains well below year-ago levels of 62.8.
The April gains were fueled by “a significant improvement in the short-term outlook,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.
She added that the index measuring how shoppers feel now, which posted a moderate gain, offered “a sign that conditions have not deteriorated further and may even moderately improve in the second quarter.”
The Present Situation rose slightly to 23.7 from 21.9 last month. The Expectations Index, which measures how shoppers feel about the economy over the next six months, skyrocketed to 49.5 from 30.2 in March.
That sharp increase – which marked the largest jump since a 13-point gain in November 2005 when the economy was recovering from Hurricanes Katrina and Rita – suggests that people believe the economy is nearing a bottom, Franco said. Still, she noted that the index remains well below the level associated with strong economic growth.
“It looks like the worst is behind us, but clearly we are not out of the woods,” said Franco.
With companies continuing to lay off workers, a major fear is that people will cut back their spending even more, and that could plunge the economy further into a downward spiral. Economists expect the unemployment rate – now at 8.5 percent and the highest since late 1983 – will hit 10 percent by the end of the year and keep climbing next year before it starts coming down.
Meanwhile, investors are becoming more unsettled by the possibility of a major swine flu outbreak, which could stall economic recovery — particularly in regions that depend on travel and tourism. Adam York, an economist at Wachovia Securities, said such a development could dampen confidence levels for May, but it’s still early to tell.
The consumer confidence survey showed that those anticipating business conditions will worsen over the next six months declined to 25.3 percent from 37.8 percent, while those expecting conditions to improve increased to 15.6 percent from 9.6 percent in March.
The employment outlook was also considerably less pessimistic. The percentage of consumers anticipating fewer jobs in the months ahead declined to 33.6 percent from 41.6 percent, while those expecting more jobs increased to 13.9 percent from 7.3 percent.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 The Associated Press
Monday, April 27, 2009
Home Value Insurance Coverage
With the fear of declining residential values keeping many would-be homeowners from entering the market, Move Inc. Chairman Joe Hanauer believes he has come up with a solution to get buyers off the fence: insurance policies that offer some protection in the event of home depreciation.
“If you want to restart home sales, you have to deal with the biggest factor impacting sales today, which is the erosion of home values,” explains Hanauer, who is circulating the concept to different administration officials on Capitol Hill. “The avalanche of falling home prices continues to bury consumers in fear, uncertainty and doubt.”
Home-value coverage might be structured to charge buyers a premium of 1 percent to 3 percent of their purchase price, with the insurance kicking in if the property is sold at a loss after three or more years. Such policies are already in play in the private sector, but they are relatively new; and Hanauer declares that these carriers are not equipped to handle the problem, anyway.
“The federal government, simply because of the scope and scale and the kind of muscle that would be needed, would have to do it,” he insists.
The cost to administer the program could be anywhere from $20 million to $150 million, he estimates, based on how much of the insurance would be underwritten by the U.S. government, how much consumers are responsible for, and how much real estate values drop.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 INFORMATION, INC. Bethesda, MD (301) 215-4688
“If you want to restart home sales, you have to deal with the biggest factor impacting sales today, which is the erosion of home values,” explains Hanauer, who is circulating the concept to different administration officials on Capitol Hill. “The avalanche of falling home prices continues to bury consumers in fear, uncertainty and doubt.”
Home-value coverage might be structured to charge buyers a premium of 1 percent to 3 percent of their purchase price, with the insurance kicking in if the property is sold at a loss after three or more years. Such policies are already in play in the private sector, but they are relatively new; and Hanauer declares that these carriers are not equipped to handle the problem, anyway.
“The federal government, simply because of the scope and scale and the kind of muscle that would be needed, would have to do it,” he insists.
The cost to administer the program could be anywhere from $20 million to $150 million, he estimates, based on how much of the insurance would be underwritten by the U.S. government, how much consumers are responsible for, and how much real estate values drop.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 INFORMATION, INC. Bethesda, MD (301) 215-4688
Friday, April 24, 2009
Beware Of Chinese Drywall Repair Scams
In every crisis, a handful of unsavory characters will take advantage of worried homeowners. Yesterday, Florida Attorney General Bill McCollum issued a consumer advisory against “experts” offering help with Chinese drywall problems.
At least two types of fraudulent activity involving the defective drywall have been reported to the Florida Attorney General Bill McCollum’s Office by individuals in the building industry: bogus tests to determine the presence of the product and quick cure remedies that falsely claim to remove the corrosive properties of the drywall.
According to reports, defective Chinese drywall in a home causes black corrosion to appear on copper air conditioner coils and non-insulated copper wiring. If the air conditioner coils are corroded black, there is a strong likelihood that defective imported drywall is present in the home. Most homes that contain defective imported drywall were built between 2004 and 2008. Other homes probably do not have Chinese drywall.
McCollum says there are two easy ways to find out if defective Chinese drywall was used in a home: Ask the homebuilder or have a qualified professional air conditioner technician conduct a visual inspection.
However, the presence of defective imported drywall cannot be determined by “testing” the air in the home. Additionally, if the toxic version of drywall is found during a visual inspection, it cannot be remedied with a spray or an ozone generator. McCollum says those products can actually make the problem worse.
The Florida Attorney General’s Office has had the following specific complaints so far:
• Sale of bogus test kits. These can be expensive, often costing thousands of dollars, and are generally ineffective. The presence of defective imported drywall can only be determined through visual inspection.
TALLAHASSEE, Fla. – April 24, 2009 – In every crisis, a handful of unsavory characters will take advantage of worried homeowners. Yesterday, Florida Attorney General Bill McCollum issued a consumer advisory against “experts” offering help with Chinese drywall problems.
At least two types of fraudulent activity involving the defective drywall have been reported to the Florida Attorney General Bill McCollum’s Office by individuals in the building industry: bogus tests to determine the presence of the product and quick cure remedies that falsely claim to remove the corrosive properties of the drywall.
According to reports, defective Chinese drywall in a home causes black corrosion to appear on copper air conditioner coils and non-insulated copper wiring. If the air conditioner coils are corroded black, there is a strong likelihood that defective imported drywall is present in the home. Most homes that contain defective imported drywall were built between 2004 and 2008. Other homes probably do not have Chinese drywall.
McCollum says there are two easy ways to find out if defective Chinese drywall was used in a home: Ask the homebuilder or have a qualified professional air conditioner technician conduct a visual inspection.
However, the presence of defective imported drywall cannot be determined by “testing” the air in the home. Additionally, if the toxic version of drywall is found during a visual inspection, it cannot be remedied with a spray or an ozone generator. McCollum says those products can actually make the problem worse.
The Florida Attorney General’s Office has had the following specific complaints so far:
• Sale of bogus test kits. These can be expensive, often costing thousands of dollars, and are generally ineffective. The presence of defective imported drywall can only be determined through visual inspection.
• Solicited home inspections costing thousands of dollars by “experts” with no apparent qualification. Homeowners should beware of cold calls and door-to-door solicitors.
• Sale of sprays and applications that claim to miraculously cure the corrosion problem. Not only are these products ineffective, but moisture could accelerate the corrosion.
• Sale of ozone generators. Ozone will actually increase the chemical reaction between the drywall and copper and accelerate corrosion.
Consumers can file a complaint about scams by calling the Attorney General’s fraud hotline at (866) 966-7226 or by filing a complaint online at http://myfloridalegal.com.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 FLORIDA ASSOCIATION OF REALTORS®
At least two types of fraudulent activity involving the defective drywall have been reported to the Florida Attorney General Bill McCollum’s Office by individuals in the building industry: bogus tests to determine the presence of the product and quick cure remedies that falsely claim to remove the corrosive properties of the drywall.
According to reports, defective Chinese drywall in a home causes black corrosion to appear on copper air conditioner coils and non-insulated copper wiring. If the air conditioner coils are corroded black, there is a strong likelihood that defective imported drywall is present in the home. Most homes that contain defective imported drywall were built between 2004 and 2008. Other homes probably do not have Chinese drywall.
McCollum says there are two easy ways to find out if defective Chinese drywall was used in a home: Ask the homebuilder or have a qualified professional air conditioner technician conduct a visual inspection.
However, the presence of defective imported drywall cannot be determined by “testing” the air in the home. Additionally, if the toxic version of drywall is found during a visual inspection, it cannot be remedied with a spray or an ozone generator. McCollum says those products can actually make the problem worse.
The Florida Attorney General’s Office has had the following specific complaints so far:
• Sale of bogus test kits. These can be expensive, often costing thousands of dollars, and are generally ineffective. The presence of defective imported drywall can only be determined through visual inspection.
TALLAHASSEE, Fla. – April 24, 2009 – In every crisis, a handful of unsavory characters will take advantage of worried homeowners. Yesterday, Florida Attorney General Bill McCollum issued a consumer advisory against “experts” offering help with Chinese drywall problems.
At least two types of fraudulent activity involving the defective drywall have been reported to the Florida Attorney General Bill McCollum’s Office by individuals in the building industry: bogus tests to determine the presence of the product and quick cure remedies that falsely claim to remove the corrosive properties of the drywall.
According to reports, defective Chinese drywall in a home causes black corrosion to appear on copper air conditioner coils and non-insulated copper wiring. If the air conditioner coils are corroded black, there is a strong likelihood that defective imported drywall is present in the home. Most homes that contain defective imported drywall were built between 2004 and 2008. Other homes probably do not have Chinese drywall.
McCollum says there are two easy ways to find out if defective Chinese drywall was used in a home: Ask the homebuilder or have a qualified professional air conditioner technician conduct a visual inspection.
However, the presence of defective imported drywall cannot be determined by “testing” the air in the home. Additionally, if the toxic version of drywall is found during a visual inspection, it cannot be remedied with a spray or an ozone generator. McCollum says those products can actually make the problem worse.
The Florida Attorney General’s Office has had the following specific complaints so far:
• Sale of bogus test kits. These can be expensive, often costing thousands of dollars, and are generally ineffective. The presence of defective imported drywall can only be determined through visual inspection.
• Solicited home inspections costing thousands of dollars by “experts” with no apparent qualification. Homeowners should beware of cold calls and door-to-door solicitors.
• Sale of sprays and applications that claim to miraculously cure the corrosion problem. Not only are these products ineffective, but moisture could accelerate the corrosion.
• Sale of ozone generators. Ozone will actually increase the chemical reaction between the drywall and copper and accelerate corrosion.
Consumers can file a complaint about scams by calling the Attorney General’s fraud hotline at (866) 966-7226 or by filing a complaint online at http://myfloridalegal.com.
www.anthonycruzjr.com
www.twitter.com/fla_real_estate
2009 FLORIDA ASSOCIATION OF REALTORS®
Thursday, April 23, 2009
Foreclosure Help
The following groups are available to help at-risk homeowners:
• HUD at (800) 569-4287, (877) 483-1515, or
www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm
• HOPE NOW, HUD mortgage counselors & lenders to assist homeowners:
(888) 995-HOPE or www.hopenow.com
• NeighborWorks America:
www.nw.org/network/home.asp
• Federal mortgage modification and refinancing programs: www.makinghomeaffordable.gov
• The Controller of the Currency's consumer information site for banking-related questions: www.helpwithmybank.gov
• OCC Customer Assistance Group:
www.occ.gov/customer.htm
• Federal Trade Commission:
www.ftc.gov/bcp/edu/pubs/consumer/homes/rea04.shtm
• Federal Reserve Board: www.federalreserve.gov/pubs/foreclosurescamtips/default.htm
• HUD at (800) 569-4287, (877) 483-1515, or
www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm
• HOPE NOW, HUD mortgage counselors & lenders to assist homeowners:
(888) 995-HOPE or www.hopenow.com
• NeighborWorks America:
www.nw.org/network/home.asp
• Federal mortgage modification and refinancing programs: www.makinghomeaffordable.gov
• The Controller of the Currency's consumer information site for banking-related questions: www.helpwithmybank.gov
• OCC Customer Assistance Group:
www.occ.gov/customer.htm
• Federal Trade Commission:
www.ftc.gov/bcp/edu/pubs/consumer/homes/rea04.shtm
• Federal Reserve Board: www.federalreserve.gov/pubs/foreclosurescamtips/default.htm
Wednesday, April 22, 2009
First Time Home Buyer Market
Experts say it’s a first-time homebuyer’s market. Low interest rates and falling housing prices are good news for renters ready to make a move, and one local group aims to help such buyers through the process – from securing a mortgage to coming up with the cash to make a downpayment on the home of their dreams.
The Realtors Care Foundation, a nonprofit arm of the Greater Tampa Association of Realtors, was established in 2007 to provide educational and housing programs and services to Hillsborough County residents.
The group recently launched a downpayment assistance program to help prospective first-time homebuyers.
“People who want to purchase a home in Hillsborough County need to be aware that we are here to help,” said Jim Selvey, foundation president.
To qualify for the program, applicants – first-time homebuyers or those who have not owned a home in the past three years – must purchase a single-family house, condominium or townhouse and meet income limits established by the U.S. Department of Housing and Urban Development.
Applicants also must agree to remain current on property taxes and homeowner association fees and certify that they will remain owners for a minimum of five years.
“The goal is to help as many as we can,” Selvey said.
For information about the Realtors Care Foundation or down-payment assistance grants, call (813) 879-7010 or go to www.realtorscareofgtar.org.
2009 Tampa Tribune
The Realtors Care Foundation, a nonprofit arm of the Greater Tampa Association of Realtors, was established in 2007 to provide educational and housing programs and services to Hillsborough County residents.
The group recently launched a downpayment assistance program to help prospective first-time homebuyers.
“People who want to purchase a home in Hillsborough County need to be aware that we are here to help,” said Jim Selvey, foundation president.
To qualify for the program, applicants – first-time homebuyers or those who have not owned a home in the past three years – must purchase a single-family house, condominium or townhouse and meet income limits established by the U.S. Department of Housing and Urban Development.
Applicants also must agree to remain current on property taxes and homeowner association fees and certify that they will remain owners for a minimum of five years.
“The goal is to help as many as we can,” Selvey said.
For information about the Realtors Care Foundation or down-payment assistance grants, call (813) 879-7010 or go to www.realtorscareofgtar.org.
2009 Tampa Tribune
Monday, April 20, 2009
Buying A Foreclosure? Read This First
Many home buyers looking for bargains are turning to foreclosures and discovering that the toughest challenge is not finding the property, but dealing with the banks that repossessed the homes. Although most banks are quick to accept a bid and write a contract, some buyers report that as closing approaches, issues, such as liens and rights to the property, arise.
Here's what you should know:
Purchasing a home from a bank is much different than buying from a homeowner. If a problem is found during the home-buying process, it may take the bank longer to resolve the issue than it would a homeowner. As with short sales, home buyers need to be aware that foreclosures can take longer because most banks are overwhelmed with properties and do not have enough qualified staff to handle all requests.
In previous years, when home prices were increasing, banks didn’t have to keep foreclosed homes on their books long. Often, investors would purchase the foreclosures through court auctions. However, as home prices declined, especially in the past two years, many investors decided to delay purchasing new properties. Banks then had to concentrate their efforts on selling to the general public, which often takes longer.
When a bank repossesses a home, it typically engages a lawyer to determine whether there are other claims on the property. Generally, the lawyer only is paid to look at the time from when the owners took out the mortgage to the time the bank repossessed the house. Any pre-existing problems, or new ones, usually surface at closing time, when a more thorough search is performed. IMPORTANT: Buyers need to be aware that any pre-existing or new problems are only found through the buyers inspections. The bank (not living on the propery) has no idea what condition the house is in and therefore will not disclose any problems. Buyers should be very certain that their inspections are done thoroughly and by licensed inspectors.
Buyers should be aware that banks usually sell homes in an “as-is” condition, and on their own terms. Meaning that the banks usually will not mend any problems found during inspections. Although buyers are informed prior to beginning the home-buying process, some are unwilling to agree to the bank’s terms when it’s time to finalize the deal and sign addendums to the contract.
Here's what you should know:
Purchasing a home from a bank is much different than buying from a homeowner. If a problem is found during the home-buying process, it may take the bank longer to resolve the issue than it would a homeowner. As with short sales, home buyers need to be aware that foreclosures can take longer because most banks are overwhelmed with properties and do not have enough qualified staff to handle all requests.
In previous years, when home prices were increasing, banks didn’t have to keep foreclosed homes on their books long. Often, investors would purchase the foreclosures through court auctions. However, as home prices declined, especially in the past two years, many investors decided to delay purchasing new properties. Banks then had to concentrate their efforts on selling to the general public, which often takes longer.
When a bank repossesses a home, it typically engages a lawyer to determine whether there are other claims on the property. Generally, the lawyer only is paid to look at the time from when the owners took out the mortgage to the time the bank repossessed the house. Any pre-existing problems, or new ones, usually surface at closing time, when a more thorough search is performed. IMPORTANT: Buyers need to be aware that any pre-existing or new problems are only found through the buyers inspections. The bank (not living on the propery) has no idea what condition the house is in and therefore will not disclose any problems. Buyers should be very certain that their inspections are done thoroughly and by licensed inspectors.
Buyers should be aware that banks usually sell homes in an “as-is” condition, and on their own terms. Meaning that the banks usually will not mend any problems found during inspections. Although buyers are informed prior to beginning the home-buying process, some are unwilling to agree to the bank’s terms when it’s time to finalize the deal and sign addendums to the contract.
Unpaid Real Estate Taxes in Tampa Bay Area Hit $332M
A record number of property tax bills remain unpaid across the Tampa Bay area this year, one more casualty of tough economic times.
In April, 114,000 properties had overdue bills totaling $332.1 million in taxes in Pinellas, Hillsborough, Pasco and Hernando counties.
Final warnings to property owners for unpaid real estate taxes spiked 10 percent this March on top of record high delinquencies in 2008.
The unpaid taxes come in a year when declining property values and state-mandated tax relief measures lowered many bills.
"I'm afraid it's a sign of the times,'' Hernando County Commission Chairman Dave Russell said. "There are certainly a lot of folks under financial duress right now, and I believe this is a significant indicator of that.''
It's not just homeowners, who have a third of the properties with overdue bills in Pinellas and Hillsborough counties. Big-name developers and businesses also haven't paid. Apartments. Marinas. The Tampa Bay Lightning.
The tax bills — lifeblood of local government and schools — are big.
Osprey SP Properties, owner of First Central Tower in downtown St. Petersburg, owes almost $495,000, the biggest unpaid bill for a parcel in Pinellas, according to the Tax Collector's Office.
Wendy Giffin, president of the company's real estate management arm in St. Petersburg, said Friday that the company recently sent payment that should clear today or Tuesday.
The tower has a 47 percent vacancy rate, though the company remains financially fine overall, Giffin said. But in tough times, tenants are seeking short-term leases there.
Of the county's nearly 34,000 overdue property bills in April, she said: "That's amazing."
Tax bill disputed
In Hillsborough, the biggest overdue bill is owed by a corporation linked to the financially troubled Metro Development Group, according to the Tax Collector's Office. The company owes $665,000 in taxes for land near U.S. 301 and State Road 674 in Wimauma. In fact, the county says Forest Brooke/Hillsborough LLC owes an additional $715,000 from last year's taxes.
Company officials dispute the bill, saying Hillsborough has vastly overvalued the land, ignoring its current agricultural use. They are due to make an appeal this year, and have paid $30,000 — their accounting of the bill — for 2008 pending the challenge, spokesman John Heagney said.
The Tampa Bay Lightning — which slashed staff recently — owes nearly $440,000 through affiliates for two downtown Tampa lots that are among the highest unpaid tax bills.
And while the city of St. Petersburg fights to annex 18 acres of Tierra Verde, the county tax collector awaits at least $505,000 in combined taxes from two companies that own much of that land.
The companies, Tierra Verde Marina Holdings and A&S Tierra Verde Ventures, agreed to the annexation, despite objections by some residents and Pinellas County.
Richard Fabrizi, president of Tierra Verde Marina Holdings, did not return a message seeking comment. But employee Melisa Jones said Thursday that the company's accountant prepared and sent the payment.
On Friday, the Pinellas Tax Collector's Office still listed $274,000 in unpaid taxes for the company's three seaside properties in Tierra Verde. Taxes were due by March 31.
Steve Sembler, president of A&S Tierra Verde Ventures, did not return a message about $231,000 owed in late taxes and penalty at the marina, one of the county's largest unpaid bills on a single property. Taxes on parcels of several other companies are also overdue.
The surge in warnings and overdue bills is biggest in Pinellas. Carlos Thomas, the chief deputy tax collector, said homeowners pressed for money by insurance and other bills are willing to pay late to stretch finances.
Russell, the Hernando commissioner, said that with the penalty on a late tax bill totaling 3 percent, "some folks may be weighing that and saying, perhaps I'm better off paying down my credit card debt at 18 percent interest."
"I hope it's a matter of prioritizing what bills get paid'' rather than people in dire straits, he said.
Even with overdue bills, counties reported 90 percent or more of tax bills have been paid. The increased delinquency represents a small fraction of the tax base.
Delinquent bills
Tax notices arrive in November. In May, counties prepare a list of parcels with delinquent bills, which are later advertised for tax certificate sales to investors.
In such a sale, an investor pays the tax owed to the county in exchange for a lien on the property. The investor then charges interest to the homeowner on the overdue tax bill until it's paid. Those certificate sales help the government recover late payments and give late taxpayers incentive to pay their bills.
"I've got to tell you, in years past people were even a little more sensitive to seeing their name and address advertised," Thomas said.
Tax collectors, and local governments, are closely watching how the next few months play out to see if bills are paid and investors come calling. While the dearth of credit may limit certificate buyers, there's also a cache of investors trying to score at the bottom of the market, said Howard Liggett, executive director of the National Tax Lien Association in Pensacola.
Will there be enough investors out there to pay the bill of unpaid taxes for local governments?
"The answer is we don't know," he said.
St. Pete Times
In April, 114,000 properties had overdue bills totaling $332.1 million in taxes in Pinellas, Hillsborough, Pasco and Hernando counties.
Final warnings to property owners for unpaid real estate taxes spiked 10 percent this March on top of record high delinquencies in 2008.
The unpaid taxes come in a year when declining property values and state-mandated tax relief measures lowered many bills.
"I'm afraid it's a sign of the times,'' Hernando County Commission Chairman Dave Russell said. "There are certainly a lot of folks under financial duress right now, and I believe this is a significant indicator of that.''
It's not just homeowners, who have a third of the properties with overdue bills in Pinellas and Hillsborough counties. Big-name developers and businesses also haven't paid. Apartments. Marinas. The Tampa Bay Lightning.
The tax bills — lifeblood of local government and schools — are big.
Osprey SP Properties, owner of First Central Tower in downtown St. Petersburg, owes almost $495,000, the biggest unpaid bill for a parcel in Pinellas, according to the Tax Collector's Office.
Wendy Giffin, president of the company's real estate management arm in St. Petersburg, said Friday that the company recently sent payment that should clear today or Tuesday.
The tower has a 47 percent vacancy rate, though the company remains financially fine overall, Giffin said. But in tough times, tenants are seeking short-term leases there.
Of the county's nearly 34,000 overdue property bills in April, she said: "That's amazing."
Tax bill disputed
In Hillsborough, the biggest overdue bill is owed by a corporation linked to the financially troubled Metro Development Group, according to the Tax Collector's Office. The company owes $665,000 in taxes for land near U.S. 301 and State Road 674 in Wimauma. In fact, the county says Forest Brooke/Hillsborough LLC owes an additional $715,000 from last year's taxes.
Company officials dispute the bill, saying Hillsborough has vastly overvalued the land, ignoring its current agricultural use. They are due to make an appeal this year, and have paid $30,000 — their accounting of the bill — for 2008 pending the challenge, spokesman John Heagney said.
The Tampa Bay Lightning — which slashed staff recently — owes nearly $440,000 through affiliates for two downtown Tampa lots that are among the highest unpaid tax bills.
And while the city of St. Petersburg fights to annex 18 acres of Tierra Verde, the county tax collector awaits at least $505,000 in combined taxes from two companies that own much of that land.
The companies, Tierra Verde Marina Holdings and A&S Tierra Verde Ventures, agreed to the annexation, despite objections by some residents and Pinellas County.
Richard Fabrizi, president of Tierra Verde Marina Holdings, did not return a message seeking comment. But employee Melisa Jones said Thursday that the company's accountant prepared and sent the payment.
On Friday, the Pinellas Tax Collector's Office still listed $274,000 in unpaid taxes for the company's three seaside properties in Tierra Verde. Taxes were due by March 31.
Steve Sembler, president of A&S Tierra Verde Ventures, did not return a message about $231,000 owed in late taxes and penalty at the marina, one of the county's largest unpaid bills on a single property. Taxes on parcels of several other companies are also overdue.
The surge in warnings and overdue bills is biggest in Pinellas. Carlos Thomas, the chief deputy tax collector, said homeowners pressed for money by insurance and other bills are willing to pay late to stretch finances.
Russell, the Hernando commissioner, said that with the penalty on a late tax bill totaling 3 percent, "some folks may be weighing that and saying, perhaps I'm better off paying down my credit card debt at 18 percent interest."
"I hope it's a matter of prioritizing what bills get paid'' rather than people in dire straits, he said.
Even with overdue bills, counties reported 90 percent or more of tax bills have been paid. The increased delinquency represents a small fraction of the tax base.
Delinquent bills
Tax notices arrive in November. In May, counties prepare a list of parcels with delinquent bills, which are later advertised for tax certificate sales to investors.
In such a sale, an investor pays the tax owed to the county in exchange for a lien on the property. The investor then charges interest to the homeowner on the overdue tax bill until it's paid. Those certificate sales help the government recover late payments and give late taxpayers incentive to pay their bills.
"I've got to tell you, in years past people were even a little more sensitive to seeing their name and address advertised," Thomas said.
Tax collectors, and local governments, are closely watching how the next few months play out to see if bills are paid and investors come calling. While the dearth of credit may limit certificate buyers, there's also a cache of investors trying to score at the bottom of the market, said Howard Liggett, executive director of the National Tax Lien Association in Pensacola.
Will there be enough investors out there to pay the bill of unpaid taxes for local governments?
"The answer is we don't know," he said.
St. Pete Times
Sunday, April 19, 2009
Beware Of Foreclosure Scams
Like many homeowners facing foreclosure, Sandi Stewart says she'll do just about anything to keep her Lakeland home.
So in February, when she saw a television commercial from a California lawyer advertising help with mortgage loan modifications, she called. The company agreed to take on her case - as soon as she gave them a credit card payment of $3,500.
"Because it was an attorney, I thought it was more secure," said Stewart, who paid all of it upfront. "I know now it doesn't sound very smart, but I didn't know what else to do."
Company representatives, she says, tell her they've had no luck so far. Stewart is still hoping they come through, but she's starting to wonder whether she wasted money she could have spent on mortgage payments.
She'll find out soon, but the most alarming part of the story is the fee.
It's against the law in Florida to charge upfront fees for foreclosure help. The law was passed a year ago, but many companies still won't begin work until they get the money. And an increasing number of them aren't doing anything in return. Florida's attorney general has called the situation a "state of emergency."
Does the law have a loophole?
Federal and state authorities are investigating, prosecuting and shutting down companies that violate the law. But some have found what they think is a loophole in the law: Florida attorneys are exempt from the ban on charging upfront fees.
When Stewart questioned the fees, she says she was told it was legal because she was hiring an attorney.
However, she had no correspondence with the lawyer and spoke only to the "loan modification department." Plus, the lawyer, Christian M. Dillon, is not licensed in Florida.
Repeated phone calls to representatives for the company, uFirst Direct, and for Dillon himself, were not returned.
The attorney defense for charging upfront fees is not an isolated case.
Another reader called recently about a Chicago company, American Homeowners Alliance. It asked for $1,500 up front.
When reached by phone, the company president, Jim Hamilton, told me he was aware of Florida's law but that it doesn't apply to him because his company is based in Illinois.
Furthermore, he said, his company is exempt from Illinois' law against upfront fees because he has an attorney on staff.
"This is how I do business because I've been beat out of $3,000 in the past by people not paying," Hamilton said. "Two of those homeowners were in Florida."
"Would you do this kind of work without getting paid for it first?" he asked.
That point is understandable.
The attorney general has not received complaints about Hamilton's company. However, the attorney defense for charging upfront fees just doesn't hold up, according to regulators.
Offices for the attorneys general in Florida and Illinois say companies operating in Florida must obey local laws, no matter where their home office is.
"Merely having an attorney on staff, even assuming he is licensed to practice in Florida, is not enough to qualify for the exemption, said Sandi Copes, communications director for the Florida attorney general. "There must be an attorney-client relationship established before the exemption applies."
Make sure you get what you pay for
St. Petersburg lawyer Matt Weidner said many of his clients have been to foreclosure rescue firms before hiring him.
"I had two clients recently that each paid $1,500 to a company that said they could make the foreclosure go away," he said. "The companies ended up coming back and asking for more money."
Some clients have also received advice from firms that ended up making it more difficult to work with lenders, Weidner said.
The bottom line is this: Seek out free help from local nonprofit groups before agreeing to pay for help. And if your situation requires more work than offered for free, do your research.
If you hire a rescue company, don't pay a dime until you actually get what you're paying for.
If you think you've been a victim of foreclosure rescue fraud, call the Florida attorney general's hot line at 1-866-966-7226 or go to http://myfloridalegal.com/ mortgagefraud, which provides complaint forms and tips to identify and avoid fraud.
To find HUD-certified housing counselors - who work for free - call 1-888-995-HOPE.
So in February, when she saw a television commercial from a California lawyer advertising help with mortgage loan modifications, she called. The company agreed to take on her case - as soon as she gave them a credit card payment of $3,500.
"Because it was an attorney, I thought it was more secure," said Stewart, who paid all of it upfront. "I know now it doesn't sound very smart, but I didn't know what else to do."
Company representatives, she says, tell her they've had no luck so far. Stewart is still hoping they come through, but she's starting to wonder whether she wasted money she could have spent on mortgage payments.
She'll find out soon, but the most alarming part of the story is the fee.
It's against the law in Florida to charge upfront fees for foreclosure help. The law was passed a year ago, but many companies still won't begin work until they get the money. And an increasing number of them aren't doing anything in return. Florida's attorney general has called the situation a "state of emergency."
Does the law have a loophole?
Federal and state authorities are investigating, prosecuting and shutting down companies that violate the law. But some have found what they think is a loophole in the law: Florida attorneys are exempt from the ban on charging upfront fees.
When Stewart questioned the fees, she says she was told it was legal because she was hiring an attorney.
However, she had no correspondence with the lawyer and spoke only to the "loan modification department." Plus, the lawyer, Christian M. Dillon, is not licensed in Florida.
Repeated phone calls to representatives for the company, uFirst Direct, and for Dillon himself, were not returned.
The attorney defense for charging upfront fees is not an isolated case.
Another reader called recently about a Chicago company, American Homeowners Alliance. It asked for $1,500 up front.
When reached by phone, the company president, Jim Hamilton, told me he was aware of Florida's law but that it doesn't apply to him because his company is based in Illinois.
Furthermore, he said, his company is exempt from Illinois' law against upfront fees because he has an attorney on staff.
"This is how I do business because I've been beat out of $3,000 in the past by people not paying," Hamilton said. "Two of those homeowners were in Florida."
"Would you do this kind of work without getting paid for it first?" he asked.
That point is understandable.
The attorney general has not received complaints about Hamilton's company. However, the attorney defense for charging upfront fees just doesn't hold up, according to regulators.
Offices for the attorneys general in Florida and Illinois say companies operating in Florida must obey local laws, no matter where their home office is.
"Merely having an attorney on staff, even assuming he is licensed to practice in Florida, is not enough to qualify for the exemption, said Sandi Copes, communications director for the Florida attorney general. "There must be an attorney-client relationship established before the exemption applies."
Make sure you get what you pay for
St. Petersburg lawyer Matt Weidner said many of his clients have been to foreclosure rescue firms before hiring him.
"I had two clients recently that each paid $1,500 to a company that said they could make the foreclosure go away," he said. "The companies ended up coming back and asking for more money."
Some clients have also received advice from firms that ended up making it more difficult to work with lenders, Weidner said.
The bottom line is this: Seek out free help from local nonprofit groups before agreeing to pay for help. And if your situation requires more work than offered for free, do your research.
If you hire a rescue company, don't pay a dime until you actually get what you're paying for.
If you think you've been a victim of foreclosure rescue fraud, call the Florida attorney general's hot line at 1-866-966-7226 or go to http://myfloridalegal.com/ mortgagefraud, which provides complaint forms and tips to identify and avoid fraud.
To find HUD-certified housing counselors - who work for free - call 1-888-995-HOPE.
Saturday, April 18, 2009
Florida To Begin Testing Air Quality In Homes With Chinese Drywall
Florida officials will soon begin air-quality tests in homes to determine whether fumes emitted from Chinese-made drywall can make people sick, the state Health Department said Friday.
Agency spokesman Doc Kokol said the tests, which he hopes will begin in several weeks, are complex and have never been done before.
"This is new science; nobody has tested drywall like this," he said.
An Associated Press review of shipping records found more than 540 million pounds of plasterboard was imported from China between 2004 and 2008 to meet U.S. demand during the national housing boom. Hundreds of people nationwide are now complaining that the material emits fumes that make them sick. They claim it also corrodes copper pipes, blackens jewelry and silverware and ruins air conditioners.
Estimates indicate the drywall may be in more than 100,000 homes, more than 35,000 in Florida alone. The state Health Department has logged 265 complaints so far. Lawsuits against the Chinese manufacturers, builders and suppliers have been filed in several states, including Florida, Mississippi, Alabama and Louisiana.
Builders known to have installed the drywall include Lennar, Taylor Morrison, WCI, Transeastern, Ryland and Standard Pacific, plaintiffs attorneys said.
Gov. Charlie Crist and Gov. Bobby Jindal in Louisiana, where the drywall turned up in some homes rebuilt after Hurricane Katrina, have asked for assistance with chemical testing from the Environmental Protection Agency and the Centers for Disease Control and Prevention.
Agency spokesman Doc Kokol said the tests, which he hopes will begin in several weeks, are complex and have never been done before.
"This is new science; nobody has tested drywall like this," he said.
An Associated Press review of shipping records found more than 540 million pounds of plasterboard was imported from China between 2004 and 2008 to meet U.S. demand during the national housing boom. Hundreds of people nationwide are now complaining that the material emits fumes that make them sick. They claim it also corrodes copper pipes, blackens jewelry and silverware and ruins air conditioners.
Estimates indicate the drywall may be in more than 100,000 homes, more than 35,000 in Florida alone. The state Health Department has logged 265 complaints so far. Lawsuits against the Chinese manufacturers, builders and suppliers have been filed in several states, including Florida, Mississippi, Alabama and Louisiana.
Builders known to have installed the drywall include Lennar, Taylor Morrison, WCI, Transeastern, Ryland and Standard Pacific, plaintiffs attorneys said.
Gov. Charlie Crist and Gov. Bobby Jindal in Louisiana, where the drywall turned up in some homes rebuilt after Hurricane Katrina, have asked for assistance with chemical testing from the Environmental Protection Agency and the Centers for Disease Control and Prevention.
Friday, April 17, 2009
Shopping For A House?
After more than a year of free-falling sales and prices, Central Florida’s battered housing market is getting support from both first-time home buyers and investors taking advantage of record foreclosures and distress sales across the region.
With mortgage-interest rates at record lows and an $8,000 tax credit for buyers who haven’t owned a home for at least the past three years, existing-home sales in the region have started rising again compared with a year ago. And half the deals involve bank-owned foreclosures or “short sales” – properties for which the bank has agreed to take less than the amount owed on the mortgage.
Who’s buying them? Anecdotal reports and a few surveys indicate that first-time home buyers, who don’t have to worry about selling an existing property, and investors venturing into the second-home market for the first time or searching for bargains to add to their inventory, are responsible for most of the sales.
Bulk auctions of both homes and condominiums are creating buzz in the local market, and bankers are saying yes more often to short sales, which spare them the expense of a full-blown foreclosure.
Lenders are becoming more responsive. Short-sales still remain slower and more cumbersome than a regular, open-market sale between a willing seller and a qualified buyer.
HouseHunt Inc. noted that 48 percent of sellers nationally are now getting multiple purchase offers for a single property, nearly double the 25 percent rate during the same period last year.
If you are considering purchasing a home, the time is looking sooooo right !!!
Please get in contact with me so we can discuss your housing needs.
With mortgage-interest rates at record lows and an $8,000 tax credit for buyers who haven’t owned a home for at least the past three years, existing-home sales in the region have started rising again compared with a year ago. And half the deals involve bank-owned foreclosures or “short sales” – properties for which the bank has agreed to take less than the amount owed on the mortgage.
Who’s buying them? Anecdotal reports and a few surveys indicate that first-time home buyers, who don’t have to worry about selling an existing property, and investors venturing into the second-home market for the first time or searching for bargains to add to their inventory, are responsible for most of the sales.
Bulk auctions of both homes and condominiums are creating buzz in the local market, and bankers are saying yes more often to short sales, which spare them the expense of a full-blown foreclosure.
Lenders are becoming more responsive. Short-sales still remain slower and more cumbersome than a regular, open-market sale between a willing seller and a qualified buyer.
HouseHunt Inc. noted that 48 percent of sellers nationally are now getting multiple purchase offers for a single property, nearly double the 25 percent rate during the same period last year.
If you are considering purchasing a home, the time is looking sooooo right !!!
Please get in contact with me so we can discuss your housing needs.
Thursday, April 16, 2009
U.S. Foreclosures Up 24 Percent In First Quarter
The number of American households threatened with losing their homes grew 24 percent in the first three months of this year and is poised to rise further as major lenders restart foreclosures after a temporary break, according to data released Thursday.
The big unknown for the coming months, however, is President Barack Obama’s plan to help up to 9 million borrowers avoid foreclosure through refinanced mortgages or modified loans. The Obama administration expects its plans to make a big dent in the foreclosure crisis. But it remains to be seen whether the lending industry will fully embrace it, despite $75 billion in incentive payments.
The faltering economy is causing the housing crisis to spread. Nationwide, nearly 804,000 homes received at least one foreclosure-related notice from January through March, up from about 650,000 in the same time period a year earlier, according to RealtyTrac Inc., a foreclosure listing firm.
In March, more than 340,000 properties were affected, up 17 percent from February and 46 percent from a year earlier.
Foreclosures “came back with a vengeance” last month and are likely to keep rising, said Rick Sharga, RealtyTrac’s senior vice president for marketing.
Nearly 191,000 properties completed the foreclosure process and were repossessed by banks in the quarter. While the number was down 13 percent from the fourth quarter of last year, it is expected to rise through the summer and then possibly taper off.
Fannie Mae and Freddie Mac, the big mortgage finance companies, together with many banks had temporarily halted foreclosures in advance of Obama’s plan. Now armed with the details about which borrowers can qualify, the mortgage industry has begun foreclosing on ineligible borrowers.
The Treasury Department has signed contracts with six big loan servicing companies – including Citgroup, Wells Fargo and JPMorgan Chase. Many have already started processing loans as part of the government’s “Making Home Affordable” plan.
“We need to get the long-term solutions for these folks,” Shaun Donovan, Obama’s housing secretary, said in an interview.
In the coming months, Donovan said, there are still likely to be increased foreclosures, especially from vacant houses, second homes and those owned by speculators. None of those properties will qualify for a loan modification. However, he remained optimistic that overall foreclosures could start to decrease this summer.
But even industry executives who emphatically support the plan emphasize that it’s success isn’t guaranteed.
“The effectiveness of the plan overall obviously is going to depend on the level of industry participation,” said Paul Koches, general counsel of Ocwen Financial, which collects loan payments on subprime loans.
Many borrowers and consumer groups claim the modifications offered by the lending industry don’t do enough to help cash-strapped homeowners, despite more than a year of public prodding from regulators. Fewer than half of loan modifications made at the end of last year actually reduced borrowers’ payments by more than 10 percent, data released last month show.
Plus, the lending industry has been swamped by the unprecedented wave of calls from distressed borrowers. “You can’t wave a magic wand and make the loans suddenly modified,” Sharga said. “They’re all individual transactions.”
In RealtyTrac’s report, Nevada, Arizona, California and Florida had the nation’s top foreclosure rates. In Nevada, one in every 27 homes received a foreclosure filing, while the number was one in every 54 in Arizona. Rounding out the top 10 were Illinois, Michigan, Georgia, Idaho, Utah and Oregon.
The big unknown for the coming months, however, is President Barack Obama’s plan to help up to 9 million borrowers avoid foreclosure through refinanced mortgages or modified loans. The Obama administration expects its plans to make a big dent in the foreclosure crisis. But it remains to be seen whether the lending industry will fully embrace it, despite $75 billion in incentive payments.
The faltering economy is causing the housing crisis to spread. Nationwide, nearly 804,000 homes received at least one foreclosure-related notice from January through March, up from about 650,000 in the same time period a year earlier, according to RealtyTrac Inc., a foreclosure listing firm.
In March, more than 340,000 properties were affected, up 17 percent from February and 46 percent from a year earlier.
Foreclosures “came back with a vengeance” last month and are likely to keep rising, said Rick Sharga, RealtyTrac’s senior vice president for marketing.
Nearly 191,000 properties completed the foreclosure process and were repossessed by banks in the quarter. While the number was down 13 percent from the fourth quarter of last year, it is expected to rise through the summer and then possibly taper off.
Fannie Mae and Freddie Mac, the big mortgage finance companies, together with many banks had temporarily halted foreclosures in advance of Obama’s plan. Now armed with the details about which borrowers can qualify, the mortgage industry has begun foreclosing on ineligible borrowers.
The Treasury Department has signed contracts with six big loan servicing companies – including Citgroup, Wells Fargo and JPMorgan Chase. Many have already started processing loans as part of the government’s “Making Home Affordable” plan.
“We need to get the long-term solutions for these folks,” Shaun Donovan, Obama’s housing secretary, said in an interview.
In the coming months, Donovan said, there are still likely to be increased foreclosures, especially from vacant houses, second homes and those owned by speculators. None of those properties will qualify for a loan modification. However, he remained optimistic that overall foreclosures could start to decrease this summer.
But even industry executives who emphatically support the plan emphasize that it’s success isn’t guaranteed.
“The effectiveness of the plan overall obviously is going to depend on the level of industry participation,” said Paul Koches, general counsel of Ocwen Financial, which collects loan payments on subprime loans.
Many borrowers and consumer groups claim the modifications offered by the lending industry don’t do enough to help cash-strapped homeowners, despite more than a year of public prodding from regulators. Fewer than half of loan modifications made at the end of last year actually reduced borrowers’ payments by more than 10 percent, data released last month show.
Plus, the lending industry has been swamped by the unprecedented wave of calls from distressed borrowers. “You can’t wave a magic wand and make the loans suddenly modified,” Sharga said. “They’re all individual transactions.”
In RealtyTrac’s report, Nevada, Arizona, California and Florida had the nation’s top foreclosure rates. In Nevada, one in every 27 homes received a foreclosure filing, while the number was one in every 54 in Arizona. Rounding out the top 10 were Illinois, Michigan, Georgia, Idaho, Utah and Oregon.
Wednesday, April 15, 2009
Affordability Not Improving For Renters Nationwide
Jeffrey Myers can’t make the rent – by himself. He works part-time at UPS and as a freelance photographer, but the $2,200 he pulls in a month isn’t enough to afford an apartment in Orange County, Calif., without a roommate.
“It’s hard to meet people who live by themselves. Most people have roommates,” said Myers, 31.
For homebuyers, affordability is the best it’s been for decades, but for millions of renters, coast-to-coast affordability is still getting worse, according to a study released Tuesday.
As the recession forces more Americans out of work, working-class tenants are bearing the brunt of the cuts. Record foreclosures, at the same time, mean more people are competing for low-cost rentals. And rents in many expensive cities still haven’t budged because so few apartments were built in recent years.
A renter earning the nation’s minimum wage of $6.55 could not afford a one-bedroom apartment in any county in the nation.
“It’s a very dire situation,” said Dean Baker, co-director for the Center for Economic and Policy Research. “And it’s likely to get worse in the two years ahead,” as unemployment climbs and businesses cut worker hours and pay.
A renter needs to earn $17.84 an hour to cover the monthly rent on the average $928 two-bedroom apartment, if they don’t want to spend more than 30 percent of their income on housing. But the median hourly wage for an American renter is $14.69, more than $3 short of what’s needed, according to the study by the National Low Income Housing Coalition.
“So what’s going to happen is a lot, unfortunately, will be out on the streets,” said Edward Wolff, an economist at New York University.
The lowest-income renters stand to get hit hardest. The unemployment rate is at a 25-year high of 8.5 percent, but that percentage was even higher – 12.6 percent – for those without a high school degree. Some of the worst layoffs have come from industries that employ low-income workers like construction, retail and manufacturing.
Families displaced by foreclosures are also flooding the apartment market, increasing competition for affordable rentals.
“It’s likely they’re income-constrained or don’t have credit or savings” for costlier apartments, said Rachel Drew, a research analyst at Harvard University’s Joint Center for Housing Studies.
And while rents are falling in some individual markets, many cities are showing little signs of softness because demand for apartments remains high. Renters in Seattle, Los Angeles, San Francisco and Portland, Ore., all traditionally strong markets, won’t see many rent cuts.
Even renters in beleaguered apartment markets like Phoenix, Atlanta, Las Vegas and Florida likely won’t enjoy the deals in their areas because the local economies are reeling.
“Even when rents are dipping slightly, it’s because more people are out of work,” in that area, Baker said. “Affordability only improves when wages increase in proportion with rent.”
The most expensive metropolitan area, according to the report, is Stamford, Conn. A renter must earn $32.75 an hour to afford a two-bedroom apartment there. San Francisco ranked second at $31.88 per hour, followed by Honolulu at $31.37, Westchester County, N.Y., at $30.96 and Santa Cruz, Calif., at $30.58 per hour.
Florida Association of Realtors
“It’s hard to meet people who live by themselves. Most people have roommates,” said Myers, 31.
For homebuyers, affordability is the best it’s been for decades, but for millions of renters, coast-to-coast affordability is still getting worse, according to a study released Tuesday.
As the recession forces more Americans out of work, working-class tenants are bearing the brunt of the cuts. Record foreclosures, at the same time, mean more people are competing for low-cost rentals. And rents in many expensive cities still haven’t budged because so few apartments were built in recent years.
A renter earning the nation’s minimum wage of $6.55 could not afford a one-bedroom apartment in any county in the nation.
“It’s a very dire situation,” said Dean Baker, co-director for the Center for Economic and Policy Research. “And it’s likely to get worse in the two years ahead,” as unemployment climbs and businesses cut worker hours and pay.
A renter needs to earn $17.84 an hour to cover the monthly rent on the average $928 two-bedroom apartment, if they don’t want to spend more than 30 percent of their income on housing. But the median hourly wage for an American renter is $14.69, more than $3 short of what’s needed, according to the study by the National Low Income Housing Coalition.
“So what’s going to happen is a lot, unfortunately, will be out on the streets,” said Edward Wolff, an economist at New York University.
The lowest-income renters stand to get hit hardest. The unemployment rate is at a 25-year high of 8.5 percent, but that percentage was even higher – 12.6 percent – for those without a high school degree. Some of the worst layoffs have come from industries that employ low-income workers like construction, retail and manufacturing.
Families displaced by foreclosures are also flooding the apartment market, increasing competition for affordable rentals.
“It’s likely they’re income-constrained or don’t have credit or savings” for costlier apartments, said Rachel Drew, a research analyst at Harvard University’s Joint Center for Housing Studies.
And while rents are falling in some individual markets, many cities are showing little signs of softness because demand for apartments remains high. Renters in Seattle, Los Angeles, San Francisco and Portland, Ore., all traditionally strong markets, won’t see many rent cuts.
Even renters in beleaguered apartment markets like Phoenix, Atlanta, Las Vegas and Florida likely won’t enjoy the deals in their areas because the local economies are reeling.
“Even when rents are dipping slightly, it’s because more people are out of work,” in that area, Baker said. “Affordability only improves when wages increase in proportion with rent.”
The most expensive metropolitan area, according to the report, is Stamford, Conn. A renter must earn $32.75 an hour to afford a two-bedroom apartment there. San Francisco ranked second at $31.88 per hour, followed by Honolulu at $31.37, Westchester County, N.Y., at $30.96 and Santa Cruz, Calif., at $30.58 per hour.
Florida Association of Realtors
Tuesday, April 14, 2009
Foreclosure Sales Stalled By Red Tape
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.
washingtonpost.com.
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.
washingtonpost.com.
Monday, April 13, 2009
FHA Key to Housing Rebound
The Federal Housing Administration (FHA) is a primary source of mortgage financing for millions of America’s families and plays a key role in helping bring stability to the housing market, the National Association of Realtors® told the Senate Appropriations Subcommittee Friday.
“Without FHA financing, families would be unable to purchase homes and communities would suffer from continued foreclosures and blight,” says Lennox Scott, a member of NAR’s Real Estate Advisory Board. In his testimony, Scott shared NAR’s belief in the importance of FHA, and he voiced concern for the safety and soundness of its programs due to its dramatic growth over a short period of time.
“We believe that FHA has done a good job stepping up to today’s market challenges. However, along with the dramatic growth in market share comes greater responsibility and the need for increased infrastructure and staff,” Scott says. Over the past 18 months, FHA has handled an increase in volume four times greater than 2007 levels, increasing its market share to over 30 percent.
NAR suggests a number of FHA improvements to help maintain safe and affordable FHA loan products, such as investment in staff and technology; increased oversight and risk management; technical correction to help implement FHA programs; and monetizing the $8,000 first-time homebuyer tax credit so buyers may apply it toward the downpayment.
“The U.S. Department of Housing and Urban Development has made a number of important and valuable changes to FHA over the years that have enabled it to stand up to the challenges of today’s mortgage market,” Scott says. “FHA is now a principal source of financing for millions of America’s families, and without it, the economic crisis would be significantly prolonged. This is why it is so important to invest in FHA improvements and advancements.”
NAR pledged to continue to work for FHA reforms that will ensure the continued success, availability and safety of FHA mortgage insurance programs.
2009 FLORIDA ASSOCIATION OF REALTORS®
“Without FHA financing, families would be unable to purchase homes and communities would suffer from continued foreclosures and blight,” says Lennox Scott, a member of NAR’s Real Estate Advisory Board. In his testimony, Scott shared NAR’s belief in the importance of FHA, and he voiced concern for the safety and soundness of its programs due to its dramatic growth over a short period of time.
“We believe that FHA has done a good job stepping up to today’s market challenges. However, along with the dramatic growth in market share comes greater responsibility and the need for increased infrastructure and staff,” Scott says. Over the past 18 months, FHA has handled an increase in volume four times greater than 2007 levels, increasing its market share to over 30 percent.
NAR suggests a number of FHA improvements to help maintain safe and affordable FHA loan products, such as investment in staff and technology; increased oversight and risk management; technical correction to help implement FHA programs; and monetizing the $8,000 first-time homebuyer tax credit so buyers may apply it toward the downpayment.
“The U.S. Department of Housing and Urban Development has made a number of important and valuable changes to FHA over the years that have enabled it to stand up to the challenges of today’s mortgage market,” Scott says. “FHA is now a principal source of financing for millions of America’s families, and without it, the economic crisis would be significantly prolonged. This is why it is so important to invest in FHA improvements and advancements.”
NAR pledged to continue to work for FHA reforms that will ensure the continued success, availability and safety of FHA mortgage insurance programs.
2009 FLORIDA ASSOCIATION OF REALTORS®
Sunday, April 12, 2009
RENTERS: Are You Renting a Foreclosed property?
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.
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.
Saturday, April 11, 2009
JUST LISTED - Brandon, FL $425,000
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Year Built: 2006
Gated Community
CUL-DE-SAC
3563 SQFT of living Area
Conservation Lot in a Lake setting
Oversized Lot: 85 x 145
3 Car Garage
4 Bedrooms 3 Bath
Bonus Room: Pre-wired for 6.1 Surrond Sound
Dining Room: W/Tray Ceiling, Crown Moulding
Deluxe Kitchen: Crown Moulding, Tile, Upgraded Cabinets
Den/Study
Wood Burning Fireplace
Please call for additional information:
Anthony Cruz Jr. (813) 842-1971
Signature Realty
www.anthonycruzjr.com
Friday, April 10, 2009
HOME BUYERS ARE COMING OUT
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®
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®
Thursday, April 9, 2009
FIRST TIME HOME BUYER PROGRAM
FIRST TIME HOMEBUYERS: How to get the $8,000 tax credit
How does a first-time homebuyer take advantage of the $8,000 tax credit? It comes with a few rules. According to the most recent analysis, the following rules will apply – though things could change as tax professionals weigh the details:
• The deduction is worth 10 percent of a home’s value up to $8,000, which means all homes worth more than $80,000 could qualify for the maximum amount.
• There is an income limit to qualify. A married couples’ modified adjusted gross income (MAGI) should be under $150,000 and single filers’ MAGI should be less than $75,000.
• Partial tax credits may be available for married couples with MAGI incomes over $150,000 but under $170,000, and single filers with incomes over $75,000 but under $95,000.
• If married couples file separately, they can both claim 5 percent of the home purchase ($4,000 each for a home over $80,000) on their tax returns.
• It’s a tax credit, not a deduction. That means the entire amount goes back to the first-time homebuyer unlike deductions, such as mortgage interest, that are subtracted from gross income before tax is calculated. If qualified for $8,000, the buyer gets $8,000, even if they would not owe that much in taxes otherwise.
• The tax credit applies to homes purchased from Jan. 1, 2009, through Nov. 30, 2009. • The tax credit does not have to be paid back, providing the homebuyer keeps the property for at least 36 months and resides in the home.
• To qualify as a first-time homebuyer, the purchaser cannot have owned a home within the previous three-year period. However, ownership of a vacation home or rental home does not disqualify the buyer.
• If purchasing a new home, the effective date to receive the credit is the first day the homeowner actually lives in the house. If construction began in 2008, that buyer could still qualify. And if construction begins in 2009 but the owner does not take possession until 2010, the buyer would not qualify.
• The tax credit can be claimed on 2008 income tax forms even though the purchase took place in 2009. A buyer could close on a home the same day that President Obama signs it into law, fill out their income tax forms the next day, and receive the tax credit fairly quickly.
The tax credit is not a downpayment, but it could be used toward a downpayment if first-time homebuyers plan ahead. U.S. taxpayers have money withheld from every paycheck for income taxes. If they owe more tax than the amount deducted, they pay the IRS; if they owe less, they get a tax refund.
By anticipating at least an $8,000 refund in early 2010 when they file 2009 taxes, these buyers could cut down on their tax withholding this year and save the money toward a downpayment. There is one caveat, however: Should they not buy a home in the qualifying period, they would still owe the IRS the money, and reducing their withholding amount could result in a high bill at tax time.
How does a first-time homebuyer take advantage of the $8,000 tax credit? It comes with a few rules. According to the most recent analysis, the following rules will apply – though things could change as tax professionals weigh the details:
• The deduction is worth 10 percent of a home’s value up to $8,000, which means all homes worth more than $80,000 could qualify for the maximum amount.
• There is an income limit to qualify. A married couples’ modified adjusted gross income (MAGI) should be under $150,000 and single filers’ MAGI should be less than $75,000.
• Partial tax credits may be available for married couples with MAGI incomes over $150,000 but under $170,000, and single filers with incomes over $75,000 but under $95,000.
• If married couples file separately, they can both claim 5 percent of the home purchase ($4,000 each for a home over $80,000) on their tax returns.
• It’s a tax credit, not a deduction. That means the entire amount goes back to the first-time homebuyer unlike deductions, such as mortgage interest, that are subtracted from gross income before tax is calculated. If qualified for $8,000, the buyer gets $8,000, even if they would not owe that much in taxes otherwise.
• The tax credit applies to homes purchased from Jan. 1, 2009, through Nov. 30, 2009. • The tax credit does not have to be paid back, providing the homebuyer keeps the property for at least 36 months and resides in the home.
• To qualify as a first-time homebuyer, the purchaser cannot have owned a home within the previous three-year period. However, ownership of a vacation home or rental home does not disqualify the buyer.
• If purchasing a new home, the effective date to receive the credit is the first day the homeowner actually lives in the house. If construction began in 2008, that buyer could still qualify. And if construction begins in 2009 but the owner does not take possession until 2010, the buyer would not qualify.
• The tax credit can be claimed on 2008 income tax forms even though the purchase took place in 2009. A buyer could close on a home the same day that President Obama signs it into law, fill out their income tax forms the next day, and receive the tax credit fairly quickly.
The tax credit is not a downpayment, but it could be used toward a downpayment if first-time homebuyers plan ahead. U.S. taxpayers have money withheld from every paycheck for income taxes. If they owe more tax than the amount deducted, they pay the IRS; if they owe less, they get a tax refund.
By anticipating at least an $8,000 refund in early 2010 when they file 2009 taxes, these buyers could cut down on their tax withholding this year and save the money toward a downpayment. There is one caveat, however: Should they not buy a home in the qualifying period, they would still owe the IRS the money, and reducing their withholding amount could result in a high bill at tax time.
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