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Homeowners Insurance Bill Into Law

May 29th, 2008 2:16 PM

Crist signs insurance bill into law

TALLAHASSEE, Fla – May 29, 2008 – Gov. Crist yesterday signed property insurance reform into law, the so-called Homeowners’ Bill of Rights (SB 2860 by Sen. Jeff Atwater, R-N. Palm Beach). The final version of the bill included other bills that were added as amendments, and is the biggest insurance change to come out of the 2008 Legislative session. It offers a number of protections and upgrades for Florida homeowners.

In a letter issued by the governor, he says the bill “contains many important consumer protections that will help keep insurance costs more affordable for Florida’s homeowners.”

At the same time, however, Crist took the unusual step of vetoing one provision within the bill – a proposal to take $250 million from the Insurance Capital Buildup Incentive Program that covers Citizens Property Insurance deficits, and use it to entice private insurers to buy Citizens policies. While Crist says the “program is well intended,” the “funding source is inappropriate.”

The law becomes effective July 1, 2008, and makes the following changes:

• Extends the rate freeze for Citizens Property Insurance Corp., the state’s insurer of last resort, to January 2010. The freeze was set to expire in January 2009.
• Allows single-family residential properties and condos with a replacement value of up to $2 million into the Citizens insurance pool (up from $1 million, which was set to begin Jan. 1, 2009).
• Requires Citizens’ policyholders of property located in wind-borne regions and with an insured value of $500,000 or more to disclose the property’s windstorm mitigation rating to prospective buyers. (Language in an earlier version of the bill would have required all sellers to provide their property’s windstorm rating.)
• Increases fines for violations of the insurance code and for unfair trade practices by private insurers.
• Extends by one year to January 2010 a provision from last year’s insurance bill that requires insurers to get state approval before raising property insurance rates.
• Requires insurers to notify state regulators 90 days before dropping more than 10,000 homeowners’ policies in one year.
• Requires insurers to use state-approved methods to predict the risk of hurricanes, a key factor in setting rates.

Posted by Jim Cole on May 29th, 2008 2:16 PMPost a Comment (0)

Are we at the bottom of the housing market?

May 7th, 2008 6:03 PM

St. Joe sees bottom of housing market

JACKSONVILLE, Fla. – May 7, 2008 – Florida’s biggest landowner, the St. Joe Co., believes the housing market may have reached the bottom, pointing to stabilization in the residential inventory.

St. Joe Co. CEO Peter Rummell says buyers must be “retrained” to recognize the importance of making home purchases now. He notes, “We have trained people to expect that prices are going to be lower tomorrow than today if they just wait. So now people are going to have to learn that they’ve gotten to that point.”

Though the company posted a $32 million profit for the first quarter, only $9.8 million can be attributed to its residential operations. Much of the firm’s profits can be tied to the sale of “nonstrategic” land parcels in the Florida Panhandle, including 57,435 acres it recently sold to a group of buyers including sportsmen, investors and conservationists for $91 million.

Source: St. Petersburg Times (05/06/08) Thorner, James

Posted by Jim Cole on May 7th, 2008 6:03 PMPost a Comment (0)

Reverse Mortgage

May 4th, 2008 2:01 PM

REVERSE MORTGAGE IS IT RIGHT FOR YOU!

But it sounds like such a good deal.

Let’s look at the requirements. They sound reasonable. The

person(s) must own the property and occupy it as their primary

residence. Youngest owner must be age 62 or older. Property

must meet FHA property standards. Owners must agree to

maintain the property, pay the real estate or other lawful taxes

and keep up the insurance.

The loan (this a loan and the owner is actually borrowing

money with each payment) will be based on the lesser of the

appraised net value or the FHA insurance limit.

The initial amount of the loan will be determined

each week based on the interest rate set by the FHA.

There are hundreds of lenders so there is going to be a

slight difference in the amount paid to the borrower. That

difference will be the commission or fee charged for the

paperwork. This is negotiable so always get more than one

quote.

The homeowner may take the proceeds as a lump sum

or as monthly payments or some of each. The owners might

like a monthly payout with lump sums advanced when property

taxes become due or certain health care needs are required.

It can be made flexible.

The lender doesn’t care what you need the cash for as

he looks to the equity in the property for his guarantee of

payment. Each time the homeowner receives cash this

increases the debt accrual on the property plus interest. Mr.

Home Owner does not see this as he has been told the

maximum amount he may withdraw unless it is set up as a

monthly lifetime payment.

The sooner the person dies or moves out of the home

the better it is for the lender.

Here is the trap for the lender. If the owner lives a

long time the lender must continue to come up with cash.

The lender is hoping the value of the property will

increase so his return on investment will be greater.

The lender has not factored in two negatives. First a

possible continued decline in property values and second

the possibility the owner will not maintain the property.

Let’s take an example of a man age 80 with a home

appraised at $300,000 with a remaining loan of only $100,000.

His monthly check is estimated between $900 and $1,000 per

month. He lives for at least 10 years. There is no provision for

inflation or that real estate taxes will not increase. His

payment buys less each month. He may not be able to

maintain the property or do necessary repairs.

The borrower could maintain his purchasing power

if the reverse mortgage contract included a Cost of Living

Index annual adjustment. So far not one contract has. Selling

the home now may be a better option.

The ultimate outcome is the borrower must lower his

standard of living as inflation eats away his monthly check.

The lender will have a lien on property with a decreased value.

The potential for another “subprime” fiasco looms if

the lenders bundle these reverse mortgages and sell them

as MBSs – mortgage backed securities.

In the long run it is not a good deal for either party.

Posted by Jim Cole on May 4th, 2008 2:01 PMPost a Comment (0)

What is a short sale

April 3rd, 2008 3:03 PM

A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes

Posted by Jim Cole on April 3rd, 2008 3:03 PMPost a Comment (0)

IRS: 1031 EXCHANGES ON VACATION HOMES

March 7th, 2008 5:14 PM

The Internal Revenue Service recently issued Revenue Procedure 2008-16, which spells out how vacation properties can qualify for 1031 exchanges. The guidance aims to clear up the debate over vacation homes, and whether they're an investment or personal use properties. To qualify for a 1031 exchange, the IRS says that the taxpayers must hold the property for 24 months. The holding period is broken further into 12-month blocks, and during each, the property must be rented at the fair market rate for no less than 14 days. Additionally, the owner can use the property for 14 days or 10 percent of the days rented, whichever is greater, plus devote a "reasonable" number of days to maintenance. Because it is a safe harbor ruling, experts say failing to comply with all the rules does not mean the exchange will be denied or an audit will automatically occur. However, they underscore the importance of keeping good records of the property's rental history and the dates the property was occupied by the owner for maintenance.

Posted by Jim Cole on March 7th, 2008 5:14 PMPost a Comment (0)

Mortgage application first week of January largest increace in four years.

January 9th, 2008 12:59 PM

Home loan apps jump 32%

MBA index posts largest increase in 4 years

Wednesday, January 09, 2008

Inman News

Mortgage application volume during the first week of January posted the sharpest rise in four years as borrowers jumped at falling interest rates, the Mortgage Bankers Association reported today.

The group's market composite index, a measure of home loan application volume, jumped 32.2 percent on a seasonally adjusted basis between Christmas week and the first week of 2008. The last time the index rose this sharply in a one-week period was in January 2004 with a 30.4 percent gain.

By category, the index that tracks refinancings posted the strongest growth, rising 53.9 percent last week on a seasonally adjusted basis from the week before. The index tracking purchase loans grew 14.7 percent during the period.

Inspiring borrowers to action was a large decline in interest rates. According to MBA, the average contract interest rate on 30-year fixed-rate mortgages fell to 5.73 percent last week from 6.05 percent one week earlier, and the average rate on 15-year fixed loans tumbled to 5.21 percent from 5.61 percent.

Rates on adjustable-rate mortgages (ARMs), however, edged up from 6 percent to 6.04 percent during the period, MBA reported.

Points, or loan-processing fees expressed as a percent of the total loan amount, averaged 1.1 on the 30-year loans, 1.18 on the 15-year, and 0.99 on one-year ARMs. These points include the origination fee and are based on loan-to-value ratios of 80 percent.

According to MBA, the refinance share of applications increased to 57.7 percent last week from 50.9 percent the previous week, while the ARM share dipped to 9.3 percent from 9.8 percent.

The Mortgage Bankers Association survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

Posted by Jim Cole on January 9th, 2008 12:59 PMPost a Comment (0)

Bush signs bill to for give tax on short sales and foreclosure

December 21st, 2007 4:30 PM

Bush signs bill to aid ailing homeowners

WASHINGTON – Dec. 21, 2007 – President Bush on Thursday signed a measure to provide financial relief for financially strapped homeowners facing foreclosure or in bankruptcy.

The bill gives a tax break to homeowners who have mortgage debt forgiven as part of a foreclosure or renegotiation of a loan. No taxes would be owed on the value of any debt forgiven or written off. Currently such debt forgiveness is taxable income.

“When you’re worried about making your payments, higher taxes are the last thing you need to worry about,” Bush said in a bill-signing ceremony. He stood alongside members of his Cabinet and lawmakers who pushed the measure.

While the measure is anticipated to reduce taxes of some strapped homeowners by $650 million, the cost to the government would be offset in part by limiting a tax break available on the sale of second homes.

The bill was in response to a mortgage crisis touched off this spring by a blowup in high-priced home loans for risky borrowers, throwing a pall over the economy. Foreclosures are at record highs and late payments are spiking. Lenders have been forced out of business and investors have taken huge financial hits.

“This is going to make a happy holiday for many homeowners,” Bush said of the bill moments before signing it into law.

An estimated 2 million to 2.5 million adjustable-rate mortgages – worth some $600 billion – will jump from low initial “teaser” rates to higher rates this year and next. Steep prepayment penalties have made it difficult for some to get out of their mortgages, and some overstretched homeowners can’t afford to refinance or sell their homes.

Posted by Jim Cole on December 21st, 2007 4:30 PMPost a Comment (0)

Mortgage Insurance Is Tax Deductible

December 20th, 2007 10:13 AM

tax.extd.small Mortgage Insurance is Once Again
Tax Deductible for Borrowers!

Turbulence in the mortgage marketplace has been big news in 2007. But here’s something bigger…and better! MI Tax Deductibility is back and this time for three more years.

This week, our United States Congress has approved or renewed several tax relief measures to keep the dream of homeownership alive for both new homebuyers and existing homeowners. The extension of MI tax deductibility is top among them. The legislation itself is no different than what was passed last year. MI premiums are still fully deductible for taxpayers earning up to $100,000, and partially deductible for those with incomes between $100,000 and $109,000. The only difference is that the deduction now applies to policies written through the 2010 calendar year.

Extending MI tax deductibility is a crucial move for many reasons:

Risky low down payment loans are no longer a viable option and are being replaced by more secure loans with mortgage insurance.
Mortgage insurance is not only safe and predictable, but it’s also cancelable and packed with features borrowers want today, including Genworth’s optional and FREE Involuntary Unemployment Insurance and pre/post purchase counseling assistance.
Consumers today have an increased understanding of how mortgage insurance can benefit them, and the extension of MI Tax Deductibility will help continue that trend.

At Genworth Mortgage Insurance, we not only want you to be aware of what our legislators are doing to help your customers, we want to make sure you have the materials you need to communicate these important benefits to them. Be sure to visit SmarterMI.com and mortgageinsurance.genworth.com for more information you can use when talking with your customers about their mortgage loan needs. Our sales force is also ready to assist with any questions you may have. Or, you may contact our ActionCenter® at 800 444.5664.

Posted by Jim Cole on December 20th, 2007 10:13 AMPost a Comment (0)

No quick fix for subprime mortgages

December 10th, 2007 1:38 PM

No quick fix for subprime mortgages

WASHINGTON – Dec. 10, 2007 – Be ready to wait if you want to get information from a toll-free hot line about freezing the interest rate on your subprime mortgage.

Minutes after President Bush outlined a plan to help strapped homeowners, callers were told to have patience until a counselor could answer their questions and “devote as much time to you as necessary.”

But, once they do get through, homeowners may not find the answers they sought.

One caller to the hot line (1-888-995-HOPE) was told there would be “lots of hoops to jump through” to obtain the five-year freeze. The rate hold goes to the heart of the relief effort for people with subprime mortgages, which are loans offered to borrowers with tarnished credit or low incomes.

Even President Bush acknowledged the plan is “no perfect solution.” Treasury Secretary Henry Paulson said it was not a “silver bullet.”

Only a fraction of the homeowners who face huge jumps in their mortgage payments appear likely to be helped by the plan, negotiated by the Bush administration, to freeze the low introductory rates on their subprime loans for five years. After that, they could be in the same position again.

Homeowners dialing up their mortgage company to get their current rate frozen could be disappointed. The White House plan does not force mortgage companies to give eligible homeowners a break. It is voluntary.

Bush, announcing the initiative Thursday, said 1.2 million people could be eligible for relief. Aid includes the rate freeze and helping people refinance into more affordable mortgages. The Center for Responsible Lending, a group that promotes homeownership and works to curb predatory lending, estimates that just 145,000 families will qualify for the rate freeze. The criteria are too strict, it says.

The White House plan is aimed at stemming foreclosures, which have shot up to record highs as the housing market has gone from boom to bust.

Subprime borrowers have been hardest hit by the meltdown. Initially low interest rates that reset to much higher rates have clobbered those borrowers. Nearly 2 million adjustable-rate subprime mortgages will reset from introductory rates of around 7 percent to 8 percent to much higher rates this year and next. That raises the specter of even more people being forced out of their homes because they cannot keep up with their monthly payments.

Rising home foreclosures are a headache for politicians and a danger for the economy.

Bush tried to shift blame for the crisis to the Democratic-led Congress.

“The Congress has not sent me a single bill to help homeowners,” Bush said.

One measure would give the Federal Housing Administration more flexibility; a second would change the tax laws temporarily to help people who have a portion of their mortgage forgiven by banks.

Sen. Charles Schumer, D-N.Y., complained the criteria for Bush’s mortgage freeze are too narrow to help most distressed homeowners and worried that legal challenges by investors might stall the effort.

“While we certainly all hope this will be a shot in the arm for the housing slump, it is hardly a panacea,” Schumer said. “There are too many families who may be left out, too much left up to the voluntary willingness of the private sector and too little disclosure and transparency to ensure families who do qualify are being helped.”

Under the plan outlined Thursday, the rate freeze offer would be available only to people who have not missed any mortgage payments at their introductory interest rate. It also only would apply to loans taken out between 2005 and this past July 31 and scheduled to rise to higher rates in Jan. 1, 2008, and July 31, 2010. To make sure speculators don’t get the break, the rate freeze offer applies only to people living in their homes.

The idea behind the administration-negotiated plan is that the five-year freeze will buy time for the housing sales and prices to start rising again. Such a rebound would enable homeowners to refinance their current adjustable rate mortgages into fixed-rate loans with more affordable monthly payments. But some people who want to buy homes and have been priced out of the market are upset that there’s no help in sight for them.

Of the nearly 3 million subprime adjustable-rate loans surveyed by the Mortgage Bankers Association in the third quarter, a record, 18.81 percent of them were past due. A record, 4.72 percent of the loans entered into the foreclosure process during that period.

Meanwhile, there still is the possibility that investors, who were counting on bigger returns from the higher rate resets, will balk at extending the duration of the lower rate.

George Miller, executive director of the American Securitization Forum, whose members include investors, ratings agencies and other financial players, backed the White House’s effort and developed streamlined procedures for lenders to follow when sorting through borrowers’ requests for relief. He was hopeful lawsuits could be avoided, but he struck a note of caution.

“Certainly, there is no complete insulation from legal exposure,” Miller said.

Posted by Jim Cole on December 10th, 2007 1:38 PMPost a Comment (0)

Destin Christmas Boat Parade don't miss

November 28th, 2007 5:16 PM

Christmas Boat Parade

Destin, FL -

Christmas Boat Parade courtesy of the largest charter fleet in Florida. A sparkling procession of festively bedecked boats parade through Destin harbor as locals and visitors wave merrily from beaches, harbors, bridges, decks and docks.

An array of beautiful floats and marching bands line the streets during this parade as Christmas music fills the air with carols and tides of the holiday spirit.

If you're not from a "coastal community, the Destin Christmas Boat Parade is an exciting and visually spectacular way to get in the holiday spirit...even in Florida! The sparkling procession of festively adorned boats is a Christmas favorite as locals and visitors wave merrily from the beaches, harbors, bridges and docks. Christmas music fills the air as an array of beautiful twinkling boats float idly by...every single light magically mirrored in the water below...it's a wonderfully unique event that the whole family will enjoy.

Christmas Boat Parade

December 9, 2007

Where: Destin, FL

Website:

Many of the boats are lit with thousands of tiny lights, adorned with Christmas trees, both artificial and real, as well as a multitude of Christmas decorations including wreaths and holly! Watching the boats quietly sail by is an inspiration to many...though it may not be everyone's idea of a traditional Christmas event, it's one that is cherished by many , and not soon forgotten!

Watching the boats quietly sail past, as the bands play in the background, is a truly inspiring scene. True, it may not be the traditional impression one has of Christmas, but its surely a Christmas that won't be forgotten!

For information on registering contact the Destin Fishing Museum 850 837-6611.

Posted by Jim Cole on November 28th, 2007 5:16 PMPost a Comment (0)