TALLAHASSEE, Fla. – March 31, 2009 – If a proposal by a coalition of real estate professionals succeeds, state lawmakers will find a way to advance a new $8,000 tax credit to new homebuyers so they can use it to make downpayments.
The $8,000 federal tax credit was part of a recently enacted stimulus law and is good for homes purchased between Jan. 1 and Nov. 30 of this year for buyers who have not bought a home in the past three years.
The alliance, which includes home builders, lenders and Realtors, is led by the Consumer Federation of the Southeast. It said it believes that finding a way to get homeowners the cash upfront, rather than when they file their tax returns, could help spur sales and mend the troubled housing market.
Florida Home Builders Association, Florida Bankers Association, the Florida Association of Realtors and the Florida Credit Union League belong to the group, which plans to pressure state lawmakers.
The coalition said in a news release late last week it had not yet devised exactly how the credit would be advanced but would be meeting with lawmakers soon to discuss details.
They estimate as many as 12,000 prospective buyers could benefit from the advance because they have not saved sufficient cash for a downpayment and closing costs. The group also points out that every dollar invested in housing returns $7 to $10 to the broader economy.
Homebuyers have increasingly turned to FHA loans that are guaranteed by the government because they require no more than 3 percent down. A cash advance of $8,000 would allow a borrower with an FHA loan to buy a home for as much as $266,000, although there are other closing costs that have to be paid.
In light of massive foreclosures, lenders in recent years have returned to the old standard of requiring downpayments from borrowers because it ensures that owners have made a cash investment in the home, making it more likely they will pay the mortgage to protect their equity stake. It also protects a bank if the borrower defaults because the bank has a better chance of selling the home for enough to recoup the loan’s unpaid balance.
During the boom, many loans required no downpayments, with some loans even exceeding the market value of the home. Now, some homeowners who owe far more than the value of their home have decided to stop making payments, leading to foreclosure.
Walt Dartland, executive director for the consumer federation, said borrowers would still have to qualify for loans based on good credit scores and other requirements to get the upfront tax credit.
“The money is a rebate, so they would have gotten it anyway,” Dartland said. Under the law, he said, buyers have to close by Dec. 1, leaving little time to take advantage of the credit.
“We have a limited amount of time to make this work. If we don’t, that money disappears.”
Copyright © 2009 The Miami Herald
Tuesday, March 31, 2009
Monday, March 30, 2009
Mortgage rates drop to record low
WASHINGTON – March 27, 2009 – Rates on 30-year mortgages fell this week to the lowest level on record after the Federal Reserve launched a new effort to assist the staggering U.S. housing market.
Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages dropped to 4.85 percent this week, from 4.98 percent last week. It was the lowest in the history of Freddie Mac’s survey, which dates back to 1971 and was down a full percentage point from a year ago.
The previous record low of 4.96 percent was set in the week of Jan. 15. Rates fell after the Fed last week said it will pump $1.2 trillion into the economy in an effort to lower rates on mortgages and loosen credit.
Rates on 30-year mortgages traditionally track yields on long-term government debt.
Though the yield on the benchmark 10-year Treasury note initially plunged by about 0.5 percentage points after the Fed’s move, lenders did not pass the entire drop on to borrowers. Bond yields rose after worries about what some saw as lackluster demand at a government debt auction Wednesday.
“There was a honeymoon effect initially” after the central bank’s announcement, said Greg McBride, senior financial analyst with Bankrate.com. “The reality of large government deficits and the need for substantial government borrowing is setting in with investors.”
Mortgage applications surged last week, mostly from borrowers looking to refinance and save money on their monthly payment. The Mortgage Bankers Association said Wednesday its weekly application index climbed more than 30 percent for the week ended March 20.
Nearly 80 percent of applications came from borrowers seeking to refinance home loans at lower rates, rather than purchase homes.
In Freddie Mac’s survey, the average rate on a 15-year fixed-rate mortgage dropped to 4.58 percent this week, down from 4.61 percent last week.
Rates on five-year, adjustable-rate mortgages fell to 4.96 percent, compared with 4.98 percent last week. Rates on one-year, adjustable-rate mortgages rose fell to 4.85 percent, from 4.91 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for all mortgages in Freddie Mac’s survey except for one-year adjustable mortgages, which had an average fee of 0.6 point.
Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages dropped to 4.85 percent this week, from 4.98 percent last week. It was the lowest in the history of Freddie Mac’s survey, which dates back to 1971 and was down a full percentage point from a year ago.
The previous record low of 4.96 percent was set in the week of Jan. 15. Rates fell after the Fed last week said it will pump $1.2 trillion into the economy in an effort to lower rates on mortgages and loosen credit.
Rates on 30-year mortgages traditionally track yields on long-term government debt.
Though the yield on the benchmark 10-year Treasury note initially plunged by about 0.5 percentage points after the Fed’s move, lenders did not pass the entire drop on to borrowers. Bond yields rose after worries about what some saw as lackluster demand at a government debt auction Wednesday.
“There was a honeymoon effect initially” after the central bank’s announcement, said Greg McBride, senior financial analyst with Bankrate.com. “The reality of large government deficits and the need for substantial government borrowing is setting in with investors.”
Mortgage applications surged last week, mostly from borrowers looking to refinance and save money on their monthly payment. The Mortgage Bankers Association said Wednesday its weekly application index climbed more than 30 percent for the week ended March 20.
Nearly 80 percent of applications came from borrowers seeking to refinance home loans at lower rates, rather than purchase homes.
In Freddie Mac’s survey, the average rate on a 15-year fixed-rate mortgage dropped to 4.58 percent this week, down from 4.61 percent last week.
Rates on five-year, adjustable-rate mortgages fell to 4.96 percent, compared with 4.98 percent last week. Rates on one-year, adjustable-rate mortgages rose fell to 4.85 percent, from 4.91 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for all mortgages in Freddie Mac’s survey except for one-year adjustable mortgages, which had an average fee of 0.6 point.
Friday, March 27, 2009
Survey: Households say now is good time to buy Great Time to Buy Florida
ORLANDO, Fla. – March 27, 2009 – Out of 1,000 potential first-time home buyers, 78 percent say that now is a good time to buy a home, despite widespread concern about the economy. And 68 percent think now is a better time to buy than six months ago. The survey was conducted in early March for the Century 21 First-Time Home Buyer Survey.
Prices are the driving motivation for potential first-time home buyers, with more than eight of 10 first-time home buyers (85 percent) saying they consider current home prices affordable, and 73 percent citing current prices as a major factor in their decision to buy now. However, potential first-time buyers are still split between “being willing to consider an offer now” (42 percent) and “waiting for prices to go down before they seriously consider making a purchase” (48 percent).
“Current pricing, rates and incentives, such as the First Time Homebuyer Tax Credit, provide tremendous opportunities for first-time home buyers to get into the market,” says Tom Kunz, Century 21 Real Estate president and CEO. “Our research shows that while consumers still have concerns about the future of the economy, many are actively considering their options as we move into the spring selling season.”
Among the survey’s other key findings:
• Bargains in the marketplace provide additional options for buyers to consider. Fifty-six percent of potential first-time home buyers are considering a foreclosed or short sale home, and 63 percent are open to a “fixer-upper” or “as-is” home.
• When asked to rate the features that they look for when choosing a home, price is the primary consideration, with 87 percent saying this feature is “very important,” followed closely by neighborhood safety (80 percent) and the home’s condition (71 percent).
• Having enough money for a downpayment is a top concern of potential first-time home buyers, as nearly half (46 percent) said they are “very worried” about the issue.
• Most respondents (86 percent) are in the market for single family homes.
Source: Century 21
Prices are the driving motivation for potential first-time home buyers, with more than eight of 10 first-time home buyers (85 percent) saying they consider current home prices affordable, and 73 percent citing current prices as a major factor in their decision to buy now. However, potential first-time buyers are still split between “being willing to consider an offer now” (42 percent) and “waiting for prices to go down before they seriously consider making a purchase” (48 percent).
“Current pricing, rates and incentives, such as the First Time Homebuyer Tax Credit, provide tremendous opportunities for first-time home buyers to get into the market,” says Tom Kunz, Century 21 Real Estate president and CEO. “Our research shows that while consumers still have concerns about the future of the economy, many are actively considering their options as we move into the spring selling season.”
Among the survey’s other key findings:
• Bargains in the marketplace provide additional options for buyers to consider. Fifty-six percent of potential first-time home buyers are considering a foreclosed or short sale home, and 63 percent are open to a “fixer-upper” or “as-is” home.
• When asked to rate the features that they look for when choosing a home, price is the primary consideration, with 87 percent saying this feature is “very important,” followed closely by neighborhood safety (80 percent) and the home’s condition (71 percent).
• Having enough money for a downpayment is a top concern of potential first-time home buyers, as nearly half (46 percent) said they are “very worried” about the issue.
• Most respondents (86 percent) are in the market for single family homes.
Source: Century 21
Thursday, March 26, 2009
Rates trigger race to buy, refinance
ORLANDO, Fla. – March 26, 2009 – Tumbling interest rates are setting off a mortgage-refinancing scramble among homeowners and pulling undecided buyers into the market.
Loan terms for 30-year fixed-rate mortgages fell to 4.63 percent from 4.89 percent for the week ending March 20, the Mortgage Bankers Association (MBA) reported Wednesday. That’s the lowest in the history of the survey, which began in 1990.
Refinancing accounted for 78.5 percent of all mortgage applications last week.
Applications are up in part because of a federal refinancing program through Freddie Mac and Fannie Mae that is part of the Obama administration’s housing rescue plan.
Rates have been driven down by the Federal Reserve’s decision last week to buy up to $300 billion of long-term government bonds and $750 billion in mortgage-backed securities held by Fannie and Freddie.
The falling rates are jolting homeowners and buyers:
• Homeowners who had been waiting to refinance say they’re now getting great deals. Nancy Hemenway, 58, of Arlington, Va., is closing on a refinance in a couple of weeks.
“We were watching the rates and didn’t see how they could go much lower,” says Hemenway, executive director of a non-profit. “We thought there might be a problem because banks weren’t lending, but that didn’t happen at all. We just filled out some paperwork and faxed it.”
• Low prices on foreclosed homes are luring buyers into the market. Up to 45 percent of existing home sales in February were distressed properties, according to a report this week by National Association of Realtors.
Michael McCullough, a public relations specialist in Atlanta, is closing today on a 3,000-square-foot home with a large yard and four bedrooms.
“My wife and I have no business buying this large a home, but we can afford it because it was a foreclosure, and we secured a 4.6 percent, 30-year fixed” loan, says McCullough. “There are tons of deals out there.”
• Realtors such as Leslie McDonnell at Re/Max Suburban in Libertyville, Ill., are seeing sudden pickups in business. Enticed by low prices and rates, McDonnell has bought several properties herself this year. “We’ve definitely seen an impact. Things have gotten busier for sure,” McDonnell says. Low rates “are compelling people into action. I do feel like we’ve hit bottom.”
Overall mortgage applications last week were 20 percent above their year–ago level, according to the MBA.
Copyright © 2009 USA Today. All rights reserved.
Loan terms for 30-year fixed-rate mortgages fell to 4.63 percent from 4.89 percent for the week ending March 20, the Mortgage Bankers Association (MBA) reported Wednesday. That’s the lowest in the history of the survey, which began in 1990.
Refinancing accounted for 78.5 percent of all mortgage applications last week.
Applications are up in part because of a federal refinancing program through Freddie Mac and Fannie Mae that is part of the Obama administration’s housing rescue plan.
Rates have been driven down by the Federal Reserve’s decision last week to buy up to $300 billion of long-term government bonds and $750 billion in mortgage-backed securities held by Fannie and Freddie.
The falling rates are jolting homeowners and buyers:
• Homeowners who had been waiting to refinance say they’re now getting great deals. Nancy Hemenway, 58, of Arlington, Va., is closing on a refinance in a couple of weeks.
“We were watching the rates and didn’t see how they could go much lower,” says Hemenway, executive director of a non-profit. “We thought there might be a problem because banks weren’t lending, but that didn’t happen at all. We just filled out some paperwork and faxed it.”
• Low prices on foreclosed homes are luring buyers into the market. Up to 45 percent of existing home sales in February were distressed properties, according to a report this week by National Association of Realtors.
Michael McCullough, a public relations specialist in Atlanta, is closing today on a 3,000-square-foot home with a large yard and four bedrooms.
“My wife and I have no business buying this large a home, but we can afford it because it was a foreclosure, and we secured a 4.6 percent, 30-year fixed” loan, says McCullough. “There are tons of deals out there.”
• Realtors such as Leslie McDonnell at Re/Max Suburban in Libertyville, Ill., are seeing sudden pickups in business. Enticed by low prices and rates, McDonnell has bought several properties herself this year. “We’ve definitely seen an impact. Things have gotten busier for sure,” McDonnell says. Low rates “are compelling people into action. I do feel like we’ve hit bottom.”
Overall mortgage applications last week were 20 percent above their year–ago level, according to the MBA.
Copyright © 2009 USA Today. All rights reserved.
Wednesday, March 25, 2009
U.S. government: Home prices up 1.7 percent month-to-month
WASHINGTON, DC – March 25, 2009 – U.S. home prices rose 1.7 percent on a seasonally-adjusted basis from December to January, according to the Federal Housing Finance Agency’s (FHFA) monthly House Price Index. In December, the FHFA first reported a 0.1 percent increase, which was later revised to a 0.2 percent decline. FHFA (www.fhfa.gov) regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks as authorized by the Housing and Economic Recovery Act of 2008.
For the 12 months ending in January, U.S. prices fell 6.3 percent, and the U.S. index is 9.6 percent below its April 2007 peak.
The FHFA monthly index is calculated using the purchase price of houses sold or guaranteed by Fannie Mae or Freddie Mac. For the nine Census Divisions, seasonally-adjusted monthly price changes from December to January ranged from -0.9 percent in the Pacific Division to +3.9 percent in the East North Central Division.
Month-to-month changes in the geographic mix of sales activity explain most of the unexpected rise in prices in January. Home sales disproportionately occurred in areas with the strongest markets, according to the release issued by FHFA. “While it is difficult to perfectly control for changing geographic mix in estimating house price indexes, the data suggest that if one were to remove those effects, the change in home prices in January, while still positive, would have been far less dramatic,” according to the FHFA release.
Reported sales volume, in absolute terms, was relatively low in January. As a result, the FHFA warns that relatively large revisions could occur later.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
For the 12 months ending in January, U.S. prices fell 6.3 percent, and the U.S. index is 9.6 percent below its April 2007 peak.
The FHFA monthly index is calculated using the purchase price of houses sold or guaranteed by Fannie Mae or Freddie Mac. For the nine Census Divisions, seasonally-adjusted monthly price changes from December to January ranged from -0.9 percent in the Pacific Division to +3.9 percent in the East North Central Division.
Month-to-month changes in the geographic mix of sales activity explain most of the unexpected rise in prices in January. Home sales disproportionately occurred in areas with the strongest markets, according to the release issued by FHFA. “While it is difficult to perfectly control for changing geographic mix in estimating house price indexes, the data suggest that if one were to remove those effects, the change in home prices in January, while still positive, would have been far less dramatic,” according to the FHFA release.
Reported sales volume, in absolute terms, was relatively low in January. As a result, the FHFA warns that relatively large revisions could occur later.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Tuesday, March 24, 2009
Florida still growing but in-migration down 90 percent
GAINESVILLE, Fla. – March 24, 2009 – The economic recession has cast a shadow over growth in the Sunshine State, according to the latest population projections from the University of Florida (UF), which see Florida’s population increases falling to their lowest level in 60 years as some counties actually shrink.
With South Florida counties particularly hard hit, the state is expected to add an average of only 37,000 residents each year between 2008 and 2010, a drop of more than 90 percent from the annual average increase during the housing boom years of 2002 to 2006. The new report shows county population projections from 2008 to 2035.
“The collapse of the housing market and the lingering effects of what has been the worst economic crisis since the Great Depression have put a real crimp on migration and are likely to keep Florida’s population growth at very low levels for the next few years,” says Stan Smith, director of UF’s Bureau of Economic and Business Research.
Not since the mid-1940s, when large numbers of military personnel who temporarily moved to Florida during World War II returned to their home states, has the state experienced such small population increases. After growing by 60,000 to 80,000 per year in the late 1930s, Florida’s population swelled by 100,000 to 300,000 per year in the early 1940s, declined for two years immediately following the war, and then entered a prolonged period of steady growth, Smith says.
The housing bust and resulting drop in home values, along with stock market declines affecting savings and retirement accounts, have made it difficult for residents nationwide to sell their homes and move to Florida, Smith says. In addition, the recession has created a loss of jobs in Florida, and employment is one of the main reasons people move to the state.
While projections call for most counties to grow slowly, 14 counties are expected to lose population during the next two years: Broward, Calhoun, Collier, Gulf, Lee, Martin, Monroe, Okaloosa, Palm Beach, Pasco, Pinellas, Putnam, Seminole and Volusia.
Since 2000, the only Florida county to lose population was Monroe. “That’s an unusual case in that most of its land is in the Everglades, which is not developable, and most of the population is in the Keys, where there is little space to expand and the cost of living is relatively high,” Smith says.
Counties in South Florida are hardest hit because they expanded most during the housing boom as huge numbers of workers moved into the state to take jobs in real estate and construction and other businesses, Smith said. When the economy declined, employees left and county populations fell.
“Many of the counties in North Florida had not experienced the boom to the same degree as the counties in South Florida and consequently did not experience the bust to the same degree,” Smith says.
As economic growth slowed and the housing market cooled, annual population growth declined from an average of 395,000 between 2000 and 2006 to 331,000 between 2006 and 2007 and 127,000 in 2007 and 2008.
The effects are being felt everywhere from declining revenues from sales taxes and real estate transactions for state and local budgets to businesses experiencing a downturn from less demand for their goods and services.
“As the national economy recovers and as the excess supply of housing in Florida is absorbed, we’re expecting growth to pick up again, probably within the next year or so, and then to increase to more normal levels during the next decade,” Smith says.
The only events that might stall population growth would be a prolonged economic slowdown similar to the Great Depression, which Smith believes is unlikely, or factors making the state a less desirable place to live, such as being hit by an unusually large number of hurricanes.
“I think heavy hurricane damage would have a psychological impact on people in terms of their thinking about whether to move to Florida, but perhaps more importantly it would have a strong economic effect by leading to a substantial increase in property insurance rates,” he says.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
With South Florida counties particularly hard hit, the state is expected to add an average of only 37,000 residents each year between 2008 and 2010, a drop of more than 90 percent from the annual average increase during the housing boom years of 2002 to 2006. The new report shows county population projections from 2008 to 2035.
“The collapse of the housing market and the lingering effects of what has been the worst economic crisis since the Great Depression have put a real crimp on migration and are likely to keep Florida’s population growth at very low levels for the next few years,” says Stan Smith, director of UF’s Bureau of Economic and Business Research.
Not since the mid-1940s, when large numbers of military personnel who temporarily moved to Florida during World War II returned to their home states, has the state experienced such small population increases. After growing by 60,000 to 80,000 per year in the late 1930s, Florida’s population swelled by 100,000 to 300,000 per year in the early 1940s, declined for two years immediately following the war, and then entered a prolonged period of steady growth, Smith says.
The housing bust and resulting drop in home values, along with stock market declines affecting savings and retirement accounts, have made it difficult for residents nationwide to sell their homes and move to Florida, Smith says. In addition, the recession has created a loss of jobs in Florida, and employment is one of the main reasons people move to the state.
While projections call for most counties to grow slowly, 14 counties are expected to lose population during the next two years: Broward, Calhoun, Collier, Gulf, Lee, Martin, Monroe, Okaloosa, Palm Beach, Pasco, Pinellas, Putnam, Seminole and Volusia.
Since 2000, the only Florida county to lose population was Monroe. “That’s an unusual case in that most of its land is in the Everglades, which is not developable, and most of the population is in the Keys, where there is little space to expand and the cost of living is relatively high,” Smith says.
Counties in South Florida are hardest hit because they expanded most during the housing boom as huge numbers of workers moved into the state to take jobs in real estate and construction and other businesses, Smith said. When the economy declined, employees left and county populations fell.
“Many of the counties in North Florida had not experienced the boom to the same degree as the counties in South Florida and consequently did not experience the bust to the same degree,” Smith says.
As economic growth slowed and the housing market cooled, annual population growth declined from an average of 395,000 between 2000 and 2006 to 331,000 between 2006 and 2007 and 127,000 in 2007 and 2008.
The effects are being felt everywhere from declining revenues from sales taxes and real estate transactions for state and local budgets to businesses experiencing a downturn from less demand for their goods and services.
“As the national economy recovers and as the excess supply of housing in Florida is absorbed, we’re expecting growth to pick up again, probably within the next year or so, and then to increase to more normal levels during the next decade,” Smith says.
The only events that might stall population growth would be a prolonged economic slowdown similar to the Great Depression, which Smith believes is unlikely, or factors making the state a less desirable place to live, such as being hit by an unusually large number of hurricanes.
“I think heavy hurricane damage would have a psychological impact on people in terms of their thinking about whether to move to Florida, but perhaps more importantly it would have a strong economic effect by leading to a substantial increase in property insurance rates,” he says.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Monday, March 23, 2009
Florida’s existing home, condo sales rise in February 2009
ORLANDO, Fla. – March 23, 2009 – Florida’s existing home sales rose in February, making it the sixth consecutive month that sales activity showed increases in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). February’s statewide sales also increased over January’s figures in both the existing home and existing condo markets.
Existing home sales rose 20 percent last month with a total of 9,858 homes sold statewide compared to 8,181 homes sold in February 2008, according to FAR. February’s statewide existing home sales were 16.7 percent higher than January’s statewide sales.
Florida Realtors also reported a 15 percent gain in statewide sales of existing condominiums in February, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 25.1 percent over the total units sold in January.
Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in February while 11 MSAs also showed gains in condo sales. It marks the eighth month in a row that a number of markets have reported increased sales.
Florida’s median sales price for existing homes last month was $141,900; a year ago, it was $199,300 for a 29 percent decrease. Industry analysts with the National Association of Realtors® (NAR) report a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in January 2009 was $169,900, down 13.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $254,350 in January; in Massachusetts, it was $321,000; in Maryland, it was $244,820; and in New York, it was $205,000.
Significant variations in local markets continue, according to NAR’s latest housing outlook, which also notes that it will take time for the impact of the economic stimulus to show in housing data. “Some markets appear to have reached the tipping point of accelerating home buying,” said NAR Chief Economist Lawrence Yun. “Improvement from the economic stimulus isn’t likely to show as closed home sales before summer, although we may see an earlier lift from lower mortgage interest rates.”
NAR analysts estimate the impact of the federal economic stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package. By the end of the year, NAR expects inventory to fall below an eight-month supply, which would be consistent with home price stabilization.
In Florida’s year-to-year comparison for condos, 3,198 units sold statewide compared to 2,785 sold in February 2008 for a 15 percent increase. The statewide existing condo median sales price last month was $109,300; in February 2008 it was $173,900 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $174,400 in January 2009.
Interest rates for a 30-year fixed-rate mortgage averaged 5.13 percent last month, down significantly from the average rate of 5.92 percent in February 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s medium-size markets, the Fort Pierce-Port St. Lucie MSA reported a total of 372 homes sold in February compared to 263 homes a year ago for a 41 percent increase. The existing home median sales price was $122,100; a year ago, it was $172,900 for a 29 percent decrease. In the year-to-year comparison for the existing condo market, a total of 71 units sold in the MSA last month, up 22 percent compared to 58 condos sold the previous February. The market’s existing condo median price was $116,700; a year ago, it was $126,700 for an 8 percent decrease.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Existing home sales rose 20 percent last month with a total of 9,858 homes sold statewide compared to 8,181 homes sold in February 2008, according to FAR. February’s statewide existing home sales were 16.7 percent higher than January’s statewide sales.
Florida Realtors also reported a 15 percent gain in statewide sales of existing condominiums in February, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 25.1 percent over the total units sold in January.
Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in February while 11 MSAs also showed gains in condo sales. It marks the eighth month in a row that a number of markets have reported increased sales.
Florida’s median sales price for existing homes last month was $141,900; a year ago, it was $199,300 for a 29 percent decrease. Industry analysts with the National Association of Realtors® (NAR) report a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in January 2009 was $169,900, down 13.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $254,350 in January; in Massachusetts, it was $321,000; in Maryland, it was $244,820; and in New York, it was $205,000.
Significant variations in local markets continue, according to NAR’s latest housing outlook, which also notes that it will take time for the impact of the economic stimulus to show in housing data. “Some markets appear to have reached the tipping point of accelerating home buying,” said NAR Chief Economist Lawrence Yun. “Improvement from the economic stimulus isn’t likely to show as closed home sales before summer, although we may see an earlier lift from lower mortgage interest rates.”
NAR analysts estimate the impact of the federal economic stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package. By the end of the year, NAR expects inventory to fall below an eight-month supply, which would be consistent with home price stabilization.
In Florida’s year-to-year comparison for condos, 3,198 units sold statewide compared to 2,785 sold in February 2008 for a 15 percent increase. The statewide existing condo median sales price last month was $109,300; in February 2008 it was $173,900 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $174,400 in January 2009.
Interest rates for a 30-year fixed-rate mortgage averaged 5.13 percent last month, down significantly from the average rate of 5.92 percent in February 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s medium-size markets, the Fort Pierce-Port St. Lucie MSA reported a total of 372 homes sold in February compared to 263 homes a year ago for a 41 percent increase. The existing home median sales price was $122,100; a year ago, it was $172,900 for a 29 percent decrease. In the year-to-year comparison for the existing condo market, a total of 71 units sold in the MSA last month, up 22 percent compared to 58 condos sold the previous February. The market’s existing condo median price was $116,700; a year ago, it was $126,700 for an 8 percent decrease.
© 2009 FLORIDA ASSOCIATION OF REALTORS®
Friday, March 20, 2009
Mortgage rates sink to new record low
WASHINGTON – March 20, 2009 – Rates on 30-year mortgages plunged to a record low Thursday after the Federal Reserve launched a new effort to prop up the flailing housing market.
The national average rate on 30-year, fixed mortgages was 4.94 percent on Thursday, according to financial publisher HSH Associates, down nearly a quarter point from a day earlier. That's the lowest on HSH's records, which date back to 1979.
For borrowers with stable jobs and good credit, it represents an opportunity to refinance at the lowest rates in decades. But people with less-than-perfect credit are likely to pay higher rates.
Plus, some mortgage brokers were disappointed on Thursday, saying lenders had not pushed down rates as dramatically as they had hoped. Lenders that are not connected to banks and must rely on short-term funding are having trouble raising cash.
"The problem is: We're still not seeing the injection of capital from the private sector," said Douglas Braden, a broker with Northern Colorado Mortgage Co.
Plus many lenders, after laying off workers in droves, don't have the capacity to keep up with a refinancing boom.
"They're already swimming in applications," said Greg McBride, senior financial analyst with Bankrate.com. "You could keep reducing mortgage rates, but if the lender's already got a stack of files on his desk, he's not going to answer the phone."
Interest rates have drifted lower since November when the Federal Reserve pledged to buy up mortgage-backed securities in an effort to bolster the long-suffering housing market.
Earlier Thursday, mortgage finance giant Freddie Mac said average rates on 30-year fixed-rate mortgages dropped this week to 4.98 percent, down from 5.03 percent last week.
It was the lowest since the week of Jan. 15, when it was at 4.96 percent, the lowest point in the history of Freddie Mac's survey, which goes back to 1971.
Freddie Mac's survey included rate quotes taken before the Fed said Wednesday it will pump $1.2 trillion into the economy in an effort to lower rates on mortgages and other and loosen credit.
The average rate on a 15-year fixed-rate mortgage dropped to 4.61 percent, down from 4.64 percent last week, Freddie Mac said.
Rates on five-year, adjustable-rate mortgages fell to 4.98 percent, compared with 4.99 percent last week. Rates on one-year, adjustable-rate mortgages rose to 4.91 percent, from 4.8 percent last week.
The rates do not include add-on fees known as points. The nationwide fee for fixed and adjustable rate mortgages averaged 0.7 point last week.
Copyright 2009 The Associated Press, Alan Zibel (AP Real Estate Writer). All rights reserved.
The national average rate on 30-year, fixed mortgages was 4.94 percent on Thursday, according to financial publisher HSH Associates, down nearly a quarter point from a day earlier. That's the lowest on HSH's records, which date back to 1979.
For borrowers with stable jobs and good credit, it represents an opportunity to refinance at the lowest rates in decades. But people with less-than-perfect credit are likely to pay higher rates.
Plus, some mortgage brokers were disappointed on Thursday, saying lenders had not pushed down rates as dramatically as they had hoped. Lenders that are not connected to banks and must rely on short-term funding are having trouble raising cash.
"The problem is: We're still not seeing the injection of capital from the private sector," said Douglas Braden, a broker with Northern Colorado Mortgage Co.
Plus many lenders, after laying off workers in droves, don't have the capacity to keep up with a refinancing boom.
"They're already swimming in applications," said Greg McBride, senior financial analyst with Bankrate.com. "You could keep reducing mortgage rates, but if the lender's already got a stack of files on his desk, he's not going to answer the phone."
Interest rates have drifted lower since November when the Federal Reserve pledged to buy up mortgage-backed securities in an effort to bolster the long-suffering housing market.
Earlier Thursday, mortgage finance giant Freddie Mac said average rates on 30-year fixed-rate mortgages dropped this week to 4.98 percent, down from 5.03 percent last week.
It was the lowest since the week of Jan. 15, when it was at 4.96 percent, the lowest point in the history of Freddie Mac's survey, which goes back to 1971.
Freddie Mac's survey included rate quotes taken before the Fed said Wednesday it will pump $1.2 trillion into the economy in an effort to lower rates on mortgages and other and loosen credit.
The average rate on a 15-year fixed-rate mortgage dropped to 4.61 percent, down from 4.64 percent last week, Freddie Mac said.
Rates on five-year, adjustable-rate mortgages fell to 4.98 percent, compared with 4.99 percent last week. Rates on one-year, adjustable-rate mortgages rose to 4.91 percent, from 4.8 percent last week.
The rates do not include add-on fees known as points. The nationwide fee for fixed and adjustable rate mortgages averaged 0.7 point last week.
Copyright 2009 The Associated Press, Alan Zibel (AP Real Estate Writer). All rights reserved.
Thursday, March 19, 2009
Mortgage rates likely to sink on Fed actions
WASHINGTON – March 19, 2009 – If you've got a good job, solid credit and your home's value hasn't fallen dramatically, you're likely to benefit from the Federal Reserve's extraordinary action Wednesday to help drive mortgage rates to historic lows and revive the U.S. housing market.
The Fed's plan to buy up to $300 billion of long-term government bonds and $750 billion in additional mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac, should benefit many - but not all - borrowers.
It's likely to produce a big drop in mortgage rates. Analysts expect rates will fall 0.25 to 0.5 percentage points as soon as Thursday.
The national average rate on 30-year, fixed mortgages was 5.15 percent on Wednesday, according to financial publisher HSH Associates, up slightly from a day earlier. Heralding a drop in mortgage rates, the yield on the benchmark 10-year Treasury note fell Wednesday to 2.51 percent from late Tuesday's 3.01 percent.
"It's going to keep rates low for a longer period of time," said Greg McBride, senior financial analyst at Bankrate.com.
Average rates for 30-year-fixed-rate mortgages hit a record low of 4.96 percent in January, according to mortgage finance company Freddie Mac. That was after the Fed launched its initial plan to buy $500 billion in mortgage-backed securities.
The Fed, seeking to push rates down further, is effectively planning to buy at least half of the home loans made in the U.S. this year based on last year's total of about $1.4 trillion in mortgages. Around 70 percent of new loans in recent months have been backed by Fannie and Freddie, the mortgage finance companies seized by government regulators in September.
Fannie and Freddie own or guarantee almost 31 million mortgages worth about $5.5 trillion, more than half of all U.S home mortgages.
The Fed actions were great news for John Tuggle, a mortgage banker in Columbus, Ga., where the economy and housing market have remained relatively healthy.
His business already had been looking up this year due to a new $8,000 tax credit for first-time buyers, and the Fed's moves amounted to icing on the cake.
"Bottom line is, those people who already are gainfully employed and can qualify for mortgage can buy more of a house," Tuggle said. "Whenever you see rates drop, people that are on the fence thinking about buying a house, they jump in and buy."
Still, mortgage lenders have severely restricted the availability of new loans to borrowers who don't have 20 percent down payments and good credit, making it tough for many first-time borrowers to qualify.
"These lenders are making their credit criteria so outrageous," said Dana Devine, a real estate agent in Apollo Beach, Fla., south of Tampa. "It's that credit score that's killing everybody."
Many lenders, after laying off workers in droves, are swamped with applications for refinanced loans. With so much business, there is less pressure to compete, and lenders have not pushed rates down as far as might be expected given their extraordinarily low borrowing costs, said Guy Cecala, publisher of Inside Mortgage Finance, a trade publication.
"They're looking to boost profitability," Cecala said. "Many of them already have all the business they can handle for the foreseeable future."
While the Fed's actions are likely to aid those who have saved up to make a downpayment on their house, or have enough equity in their homes to refinance, they are less likely to benefit the nearly 14 million American households that owe more on their home loans than their houses are worth, or those on the verge of foreclosure.
The mortgage industry, armed with $75 billion in federal bailout money that President Barack Obama wants to use to prevent foreclosures, is receiving record-high levels of requests for help from troubled homeowners.
More than 13,500 homeowners a day have called the Homeownership Preservation Foundation's 1-888-885-HOPE hot line since the Obama administration's program launched earlier this month, about triple the daily level of calls received before the plan was announced.
Mortgage applications jumped 21 percent last week from a week earlier, as low interest rates fueled refinancing activity, according to the Mortgage Bankers Association. About 73 percent of applications came from borrowers seeking to refinance home loans at lower rates.
Also Wednesday, Fannie Mae said the volume of mortgage loans it refinanced in February totaled $41 billion, nearly triple January's volume.
The mortgage finance company said Wednesday it was the largest figure in almost a year as a surge of homeowners took advantage of low interest rates and higher loan limits.
The Fed's actions mirror those being taken across the Atlantic, where the Bank of England last week began buying government bonds from financial institutions as it turned to other ways to help revive Britain's moribund economy. The Bank of England, like the Fed, already had lowered its key interest rate to a record low of 0.5 percent.
Copyright © 2009 The Associated Press, Alan Zibel (AP Real Estate Writer). All rights reserved.
The Fed's plan to buy up to $300 billion of long-term government bonds and $750 billion in additional mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac, should benefit many - but not all - borrowers.
It's likely to produce a big drop in mortgage rates. Analysts expect rates will fall 0.25 to 0.5 percentage points as soon as Thursday.
The national average rate on 30-year, fixed mortgages was 5.15 percent on Wednesday, according to financial publisher HSH Associates, up slightly from a day earlier. Heralding a drop in mortgage rates, the yield on the benchmark 10-year Treasury note fell Wednesday to 2.51 percent from late Tuesday's 3.01 percent.
"It's going to keep rates low for a longer period of time," said Greg McBride, senior financial analyst at Bankrate.com.
Average rates for 30-year-fixed-rate mortgages hit a record low of 4.96 percent in January, according to mortgage finance company Freddie Mac. That was after the Fed launched its initial plan to buy $500 billion in mortgage-backed securities.
The Fed, seeking to push rates down further, is effectively planning to buy at least half of the home loans made in the U.S. this year based on last year's total of about $1.4 trillion in mortgages. Around 70 percent of new loans in recent months have been backed by Fannie and Freddie, the mortgage finance companies seized by government regulators in September.
Fannie and Freddie own or guarantee almost 31 million mortgages worth about $5.5 trillion, more than half of all U.S home mortgages.
The Fed actions were great news for John Tuggle, a mortgage banker in Columbus, Ga., where the economy and housing market have remained relatively healthy.
His business already had been looking up this year due to a new $8,000 tax credit for first-time buyers, and the Fed's moves amounted to icing on the cake.
"Bottom line is, those people who already are gainfully employed and can qualify for mortgage can buy more of a house," Tuggle said. "Whenever you see rates drop, people that are on the fence thinking about buying a house, they jump in and buy."
Still, mortgage lenders have severely restricted the availability of new loans to borrowers who don't have 20 percent down payments and good credit, making it tough for many first-time borrowers to qualify.
"These lenders are making their credit criteria so outrageous," said Dana Devine, a real estate agent in Apollo Beach, Fla., south of Tampa. "It's that credit score that's killing everybody."
Many lenders, after laying off workers in droves, are swamped with applications for refinanced loans. With so much business, there is less pressure to compete, and lenders have not pushed rates down as far as might be expected given their extraordinarily low borrowing costs, said Guy Cecala, publisher of Inside Mortgage Finance, a trade publication.
"They're looking to boost profitability," Cecala said. "Many of them already have all the business they can handle for the foreseeable future."
While the Fed's actions are likely to aid those who have saved up to make a downpayment on their house, or have enough equity in their homes to refinance, they are less likely to benefit the nearly 14 million American households that owe more on their home loans than their houses are worth, or those on the verge of foreclosure.
The mortgage industry, armed with $75 billion in federal bailout money that President Barack Obama wants to use to prevent foreclosures, is receiving record-high levels of requests for help from troubled homeowners.
More than 13,500 homeowners a day have called the Homeownership Preservation Foundation's 1-888-885-HOPE hot line since the Obama administration's program launched earlier this month, about triple the daily level of calls received before the plan was announced.
Mortgage applications jumped 21 percent last week from a week earlier, as low interest rates fueled refinancing activity, according to the Mortgage Bankers Association. About 73 percent of applications came from borrowers seeking to refinance home loans at lower rates.
Also Wednesday, Fannie Mae said the volume of mortgage loans it refinanced in February totaled $41 billion, nearly triple January's volume.
The mortgage finance company said Wednesday it was the largest figure in almost a year as a surge of homeowners took advantage of low interest rates and higher loan limits.
The Fed's actions mirror those being taken across the Atlantic, where the Bank of England last week began buying government bonds from financial institutions as it turned to other ways to help revive Britain's moribund economy. The Bank of England, like the Fed, already had lowered its key interest rate to a record low of 0.5 percent.
Copyright © 2009 The Associated Press, Alan Zibel (AP Real Estate Writer). All rights reserved.
Wednesday, March 18, 2009
As foreclosed properties spread, Miami-Dade communities spring into action
MIAMI – March 18, 2009 – Lizzette Nieves keeps the blinds down during the day, makes sure someone is always at home and never leaves the house after sundown.
In her Venetia Groves community in Homestead, vandals have targeted vacant homes -- a trend on the uptick as the homeowners' association no longer can afford to operate guard gates. More than half of the neighborhood's homes are facing foreclosure.
In communities throughout Miami-Dade, neighborhoods like Venetia Groves have become the collateral damage in the foreclosure crisis stomping across South Florida. By the end of February, 4,588 homes in Miami-Dade -- or one of every 272 -- were either in foreclosure or bank-owned.
To protect property values and prevent block after block of unchecked blight, cities are enacting measures to contend with their bloated inventory of foreclosed homes and condos. They're hitting mortgage holders with hefty fines. They're sending out city code enforcement officers to mow and paint. They're drafting laws to compel banks to post bonds.
"Cities are going to have to do something," said Doral Mayor Juan Carlos Bermudez.
Doral has almost 1,700 homes in various stages of foreclosure -- some of which have been targeted by teenage trespassers. The City Council recently passed a law allowing code enforcement officers to clean up abandoned foreclosed properties.
"It's a fine line between protecting the rights of property owners and the quality of life of residents," Bermudez said.
Among the local cities hit hardest by foreclosures: Miami 7,876, Homestead 3,081, Miami Beach 3,052. These are cumulative numbers.
"I'm actually afraid to go out," said Nieves, who works for a Homestead title company. Like many, she is behind on her mortgage payments and the value of her home, bought for $210,000 in 2005, has fallen. (It's now worth about $50,000).
"If I have to let my house go, I'll let it go," she said. "I'm not going to live in fear."
The foreclosure crisis has been particularly acute in moderate-to-lower income communities like Homestead, Hialeah and Miami Gardens, which is allowing a nonprofit Neighborhood Housing Services to operate out of City Hall.
But affluent cities have not been immune.
"We are seeing more properties run down and abandoned," said Coral Gables Building and Zoning Director Ed Weller.
The Gables has 494 homes in foreclosure. "We have a process that if a property is not being maintained and we have sent correspondence to comply with our city codes, we send a city contractor to clean up the property and then place a lien for the cost," said Eli Gutierrez, the city's lead code enforcement officer.
Palmetto Bay, which has 428 homes facing foreclosure, has passed an emergency ordinance, dubbed Mow & Go, allowing contractors legal access to foreclosed or abandoned properties.
The city will try to recoup its costs -- it budgeted $65,000 for the program -- by slapping the homes with liens.
"Turning around the look of just one abandoned home in a neighborhood -- especially if it is right next door to your home -- helps the image of the entire neighborhood," said Bill Kress, a city spokesman.
Neighboring Cutler Bay, which has 1,525 homes facing foreclosure, requires the owners to maintain vacant properties or be subject to a fine.
Miami Lakes has gone a step further. At the urging of residents whose homes were infested with rats from nearby abandoned properties, the Town Council passed a law in December allowing code enforcement officers to clean up foreclosed properties that have been abandoned. Miami Lakes has 455 properties in various stages of foreclosure.
"In the past, when people abandoned a foreclosed property, the only thing we could do is keep fining them until we put a lien on them," said Miami Lakes Mayor Michael Pizzi. "Under the new law, the town has an obligation to go out there, cut the grass, paint the house, secure the property."
South Miami is considering a similar law, while North Miami Beach is drafting a proposal that would require banks to post bonds to pay for maintenance done by city workers.
In Homestead, cases are going before a special master, who has the power to assess fines. The special master has levied $25,605 in fines and administrative fees since October, a 69.2 percent jump over the same period a year ago.
Cities are also seeking federal and state assistance. The U.S. Department of Housing and Urban Development pledged $161 million in grant money for South Florida cities.
Local cities on the list include Miami, North Miami, Homestead, Miami Gardens and Hialeah.
Hialeah wants to use its share of the money to build $300-a-month rental units.
Homestead, which is getting almost $3 million from the fund, plans to buy and rehabilitate rental properties for low-income families, demolish damaged houses and provide down-payment assistance for single-family home buyers, said city spokeswoman Lillian Delgado.
State lawmakers are considering legislation establishing a statewide Internet registry for abandoned properties and allowing local governments to enter vacant properties.
Miami Beach Commissioner Jerry Libbin has been pushing for legislative action to ease the burden on condo and homeowners' associations, which don't have ample funds to pay for maintenance.
"The federal government can continue to print money, condominiums can't," said Arthur Barr, a board member at the Wilshire Condominium on Miami Gardens Drive in Northeast Miami-Dade, which is facing a $300,000 budget shortfall. About 30 percent of the 400 units in the building are either in foreclosure, or are delinquent on their maintenance and assessment fees.
"And that's happening all over," he said.
Copyright © 2009, The Miami Herald, Rebecca Dellagloria. Distributed by McClatchy-Tribune Information Services. Miami Herald staff writers Howard Cohen, Elaine de Valle, Lazaro Fraga, Patricia M. Gonzalez, Laura Morales, Yudy Pineiro, Carli Teproff and Tania Valdemoro contributed to this report. All rights reserved.
In her Venetia Groves community in Homestead, vandals have targeted vacant homes -- a trend on the uptick as the homeowners' association no longer can afford to operate guard gates. More than half of the neighborhood's homes are facing foreclosure.
In communities throughout Miami-Dade, neighborhoods like Venetia Groves have become the collateral damage in the foreclosure crisis stomping across South Florida. By the end of February, 4,588 homes in Miami-Dade -- or one of every 272 -- were either in foreclosure or bank-owned.
To protect property values and prevent block after block of unchecked blight, cities are enacting measures to contend with their bloated inventory of foreclosed homes and condos. They're hitting mortgage holders with hefty fines. They're sending out city code enforcement officers to mow and paint. They're drafting laws to compel banks to post bonds.
"Cities are going to have to do something," said Doral Mayor Juan Carlos Bermudez.
Doral has almost 1,700 homes in various stages of foreclosure -- some of which have been targeted by teenage trespassers. The City Council recently passed a law allowing code enforcement officers to clean up abandoned foreclosed properties.
"It's a fine line between protecting the rights of property owners and the quality of life of residents," Bermudez said.
Among the local cities hit hardest by foreclosures: Miami 7,876, Homestead 3,081, Miami Beach 3,052. These are cumulative numbers.
"I'm actually afraid to go out," said Nieves, who works for a Homestead title company. Like many, she is behind on her mortgage payments and the value of her home, bought for $210,000 in 2005, has fallen. (It's now worth about $50,000).
"If I have to let my house go, I'll let it go," she said. "I'm not going to live in fear."
The foreclosure crisis has been particularly acute in moderate-to-lower income communities like Homestead, Hialeah and Miami Gardens, which is allowing a nonprofit Neighborhood Housing Services to operate out of City Hall.
But affluent cities have not been immune.
"We are seeing more properties run down and abandoned," said Coral Gables Building and Zoning Director Ed Weller.
The Gables has 494 homes in foreclosure. "We have a process that if a property is not being maintained and we have sent correspondence to comply with our city codes, we send a city contractor to clean up the property and then place a lien for the cost," said Eli Gutierrez, the city's lead code enforcement officer.
Palmetto Bay, which has 428 homes facing foreclosure, has passed an emergency ordinance, dubbed Mow & Go, allowing contractors legal access to foreclosed or abandoned properties.
The city will try to recoup its costs -- it budgeted $65,000 for the program -- by slapping the homes with liens.
"Turning around the look of just one abandoned home in a neighborhood -- especially if it is right next door to your home -- helps the image of the entire neighborhood," said Bill Kress, a city spokesman.
Neighboring Cutler Bay, which has 1,525 homes facing foreclosure, requires the owners to maintain vacant properties or be subject to a fine.
Miami Lakes has gone a step further. At the urging of residents whose homes were infested with rats from nearby abandoned properties, the Town Council passed a law in December allowing code enforcement officers to clean up foreclosed properties that have been abandoned. Miami Lakes has 455 properties in various stages of foreclosure.
"In the past, when people abandoned a foreclosed property, the only thing we could do is keep fining them until we put a lien on them," said Miami Lakes Mayor Michael Pizzi. "Under the new law, the town has an obligation to go out there, cut the grass, paint the house, secure the property."
South Miami is considering a similar law, while North Miami Beach is drafting a proposal that would require banks to post bonds to pay for maintenance done by city workers.
In Homestead, cases are going before a special master, who has the power to assess fines. The special master has levied $25,605 in fines and administrative fees since October, a 69.2 percent jump over the same period a year ago.
Cities are also seeking federal and state assistance. The U.S. Department of Housing and Urban Development pledged $161 million in grant money for South Florida cities.
Local cities on the list include Miami, North Miami, Homestead, Miami Gardens and Hialeah.
Hialeah wants to use its share of the money to build $300-a-month rental units.
Homestead, which is getting almost $3 million from the fund, plans to buy and rehabilitate rental properties for low-income families, demolish damaged houses and provide down-payment assistance for single-family home buyers, said city spokeswoman Lillian Delgado.
State lawmakers are considering legislation establishing a statewide Internet registry for abandoned properties and allowing local governments to enter vacant properties.
Miami Beach Commissioner Jerry Libbin has been pushing for legislative action to ease the burden on condo and homeowners' associations, which don't have ample funds to pay for maintenance.
"The federal government can continue to print money, condominiums can't," said Arthur Barr, a board member at the Wilshire Condominium on Miami Gardens Drive in Northeast Miami-Dade, which is facing a $300,000 budget shortfall. About 30 percent of the 400 units in the building are either in foreclosure, or are delinquent on their maintenance and assessment fees.
"And that's happening all over," he said.
Copyright © 2009, The Miami Herald, Rebecca Dellagloria. Distributed by McClatchy-Tribune Information Services. Miami Herald staff writers Howard Cohen, Elaine de Valle, Lazaro Fraga, Patricia M. Gonzalez, Laura Morales, Yudy Pineiro, Carli Teproff and Tania Valdemoro contributed to this report. All rights reserved.
Citizens' reassessments hit some homeowners hard
TALLAHASSEE, Fla. – March 18, 2009 – Walter Baker is reeling from sticker shock: The insured value of his Lake Worth home has nearly tripled to $300,000, a jump that increased his windstorm insurance premium with Citizens Property Insurance Corp. from $1,300 to $3,000.
"I don't think this is right," Baker said of the 130 percent increase on his 2,200-square-foot home.
Citizens officials and insurance regulators say they feel the pain of homeowners like Baker, but after years of allowing insured values for some properties to languish, the state's largest insurer is playing catch-up. Earlier this year, Citizens began the yearlong process of scrutinizing property values for 350,000 coastal properties that get their wind-only coverage from the state-run carrier.
Unlike private insurers, Citizens didn't automatically raise property values each year as policies renewed -- leaving many policyholders underinsured. After the severe hurricane seasons of 2004 and 2005, Citizens paid many claims that totaled more than the insured value of properties that were destroyed by storms.
"While it may feel a bit painful for someone to see their replacement value go up, Citizens is a subsidized entity," said Jeff Grady, president of the Florida Association of Insurance Agents. "Everyone has a stake in seeing that those values are right." Thanks to a rate freeze that took effect in 2006 and lasts through this year, Citizens policyholders have enjoyed a respite from big jumps in their bills. But homeowners like Baker are seeing premiums soar anyway as the insured value of their property is reassessed.
"Citizens is just reassessing the premium based on the value of the property," not trying to circumvent the rate caps, said Ed Domansky, spokesman for the Florida Office of Insurance Regulation.
"This is in no way a way around the rate freeze," said Citizens spokesman John Kuczwanski. "It is an effort for us to collect premiums on the actual risk we insure." The changes affect Citizens' wind-only policies, which are available in specific close-to-the-coast neighborhoods where private insurers won't cover hurricane damage. That includes areas east of Interstate 95 in southern and central Palm Beach County, east of Alternate A1A north of PGA Boulevard in northern Palm Beach County, and within 1,000 feet of the ocean in St. Lucie County.
Citizens has about 42,000 wind-only customers in Palm Beach County and 1,300 in St. Lucie County. It does not offer wind-only policies in Martin County.
Many policyholders are seeing little change to their replacement values, said Mark Horne, a Nationwide Insurance agent in Greenacres. That's because the insured value of properties bought or refinanced in the past five years or so is close to today's insured value.
But for homeowners like Walter Baker, who bought in the 1990s and didn't refinance, the increase is a steep one.
"For many of these policies, no one has looked at the replacement value for 10 years," Horne said. As a result, he said, "a small percentage of policyholders are being affected in a big way." Homeowners who think that their replacement values have gone too high can appeal by pointing to a lower estimate on their policies for fire and theft, or they can pay for an appraisal, Kuczwanski said.
Ultimately, though, raising insured values is a matter of fairness for the state's fragile insurance system, observers say. If Citizens has a shortfall, it's forced to impose an assessment on the state's policyholders to plug the gap.
"When you're talking about Citizens, what's good for the few isn't necessarily good for the many," said Sean Shaw, the state's insurance consumer advocate. "I hate to see anyone get a big premium increase, but I also hate to risk a statewide assessment if a big storm comes."
Copyright © 2009, The Palm Beach Post, Fla., Jeff Ostrowski. Distributed by McClatchy-Tribune Information Services.
"I don't think this is right," Baker said of the 130 percent increase on his 2,200-square-foot home.
Citizens officials and insurance regulators say they feel the pain of homeowners like Baker, but after years of allowing insured values for some properties to languish, the state's largest insurer is playing catch-up. Earlier this year, Citizens began the yearlong process of scrutinizing property values for 350,000 coastal properties that get their wind-only coverage from the state-run carrier.
Unlike private insurers, Citizens didn't automatically raise property values each year as policies renewed -- leaving many policyholders underinsured. After the severe hurricane seasons of 2004 and 2005, Citizens paid many claims that totaled more than the insured value of properties that were destroyed by storms.
"While it may feel a bit painful for someone to see their replacement value go up, Citizens is a subsidized entity," said Jeff Grady, president of the Florida Association of Insurance Agents. "Everyone has a stake in seeing that those values are right." Thanks to a rate freeze that took effect in 2006 and lasts through this year, Citizens policyholders have enjoyed a respite from big jumps in their bills. But homeowners like Baker are seeing premiums soar anyway as the insured value of their property is reassessed.
"Citizens is just reassessing the premium based on the value of the property," not trying to circumvent the rate caps, said Ed Domansky, spokesman for the Florida Office of Insurance Regulation.
"This is in no way a way around the rate freeze," said Citizens spokesman John Kuczwanski. "It is an effort for us to collect premiums on the actual risk we insure." The changes affect Citizens' wind-only policies, which are available in specific close-to-the-coast neighborhoods where private insurers won't cover hurricane damage. That includes areas east of Interstate 95 in southern and central Palm Beach County, east of Alternate A1A north of PGA Boulevard in northern Palm Beach County, and within 1,000 feet of the ocean in St. Lucie County.
Citizens has about 42,000 wind-only customers in Palm Beach County and 1,300 in St. Lucie County. It does not offer wind-only policies in Martin County.
Many policyholders are seeing little change to their replacement values, said Mark Horne, a Nationwide Insurance agent in Greenacres. That's because the insured value of properties bought or refinanced in the past five years or so is close to today's insured value.
But for homeowners like Walter Baker, who bought in the 1990s and didn't refinance, the increase is a steep one.
"For many of these policies, no one has looked at the replacement value for 10 years," Horne said. As a result, he said, "a small percentage of policyholders are being affected in a big way." Homeowners who think that their replacement values have gone too high can appeal by pointing to a lower estimate on their policies for fire and theft, or they can pay for an appraisal, Kuczwanski said.
Ultimately, though, raising insured values is a matter of fairness for the state's fragile insurance system, observers say. If Citizens has a shortfall, it's forced to impose an assessment on the state's policyholders to plug the gap.
"When you're talking about Citizens, what's good for the few isn't necessarily good for the many," said Sean Shaw, the state's insurance consumer advocate. "I hate to see anyone get a big premium increase, but I also hate to risk a statewide assessment if a big storm comes."
Copyright © 2009, The Palm Beach Post, Fla., Jeff Ostrowski. Distributed by McClatchy-Tribune Information Services.
Tuesday, March 17, 2009
Drywall from China blamed for problems
HOMESTEAD, Fla. – March 17, 2009 – Real estate agent Felix Martinez thought he'd found his dream house when he bought the 3,500-square-foot beauty in Homestead, Fla., two years ago.
Then, he says, his large-screen TV mysteriously failed. Next, the air conditioner went. His bath towels smelled like rotten eggs. Visitors noted an odor in the house. Martinez says he's suffered new sinus problems and sleep apnea. His wife and son sneeze a lot.
The walls in the home, a recently filed class-action lawsuit alleges, were built with the same kind of Chinese-made drywall that tests have shown emit sulfur gases that corrode copper coils and electrical and plumbing components.
Similar problems have been linked to hundreds of Florida homes. Tens of thousands of homes there and in other states could be affected, say lawyers who have filed lawsuits on behalf of Florida homeowners. The discovery has created a firestorm that's engulfed an international building supplier, large and small homebuilders and dozens of subcontractors. The issue also has revived concerns about quality-control procedures of U.S. companies that use Chinese-made products, following episodes in recent years involving contaminated toothpaste and pet-food ingredients, lead-tainted toys and defective tires imported from China.
A leading U.S. home builder, Lennar, and a Chinese drywall manufacturer, Knauf Plasterboard Tianjin, say tests show the gases given off by the drywall pose no health hazards. Florida regulators and the federal Consumer Product Safety Commission are investigating.
Lawyers say far more testing needs to be done.
"If it can put holes in metal coils, how do we know it doesn't cause problems in children or adults?" asks attorney Jeremy Alters of Florida-based law firm Alters Boldt Brown Rash Culmo. Alters says he has clients who developed respiratory ailments "out of the blue" after moving into allegedly affected homes.
Knauf says Chinese drywall imports started in significant amounts in 2005 as a result of a shortage driven by the booming housing market and rebuilding after Hurricanes Katrina and Wilma.
In addition to lawsuits on behalf of Florida homeowners, a class-action lawsuit was recently filed by an Alabama homebuilder that has made air conditioning repairs on two dozen Alabama homes, says attorney Steven Nicholas. A class-action lawsuit has also been filed on behalf of Louisiana homeowners.
Lawyers say they're investigating more complaints in other states and Florida.
"We know for a fact that this product is in Virginia, Louisiana and California," says Charles LaDuca, of Washington, D.C.-based law firm Cuneo Gilbert & LaDuca. "The breadth of the problem is just unfolding."
Investigations began in 2004
So far, Florida is ground zero. Up to 1,000 homes in the southern part of the state may be affected, says Jack Snider, president of American Management Resources Corp. (AMRC). Working for homeowners and builders, the environmental consulting firm has tested drywall for gases and checked homes for odors and corrosion.
AMRC first began investigating odor complaints in 2004 and found drywall to be the cause. Because most drywall doesn't identify its origin, Snyder says, it took until 2006 before foreign-made drywall became the focus.
Homeowner lawsuits allege that the drywall has corroded air conditioning and refrigerator coils, microwaves, computer wiring, faucets and copper tubing.
Tests paid for by Lennar say the drywall appears to emit sulfur gases that can damage air conditioning coils, electrical plumbing components and other material.
In one test, copper pipe turned black after four weeks when placed in a sealed container with a piece of affected drywall, according to a lawsuit filed Jan. 30 by Lennar against Knauf Gips of Germany and its Chinese affiliate, Knauf Plasterboard Tianjin, and others. The pipe then started to corrode, Lennar says.
Lennar alleges that Knauf produced "defective" drywall. It also says subcontractors put it in homes without Lennar's knowledge. Lennar has said it has more than 80 affected homes in Florida and dozens more under review. It is relocating residents while it installs new drywall in homes.
"Lennar stands alongside its homeowners as a victim," its lawsuit says.
Plaintiffs' attorneys say residents have suffered a host of health issues, including rashes, new allergies, asthma and sore throats. Along with receiving compensation, they should be monitored long-term for health issues, says attorney Ervin Gonzalez of Colson Hicks Eidson. "This has been an economic, physical and emotional problem for victims," he says. Based on import records, he estimates that up to 60,000 U.S. homes may be affected, with about half in Florida.
Testing air
Drywall is made from gypsum, a mineral. Manufacturers also make synthetic gypsum by processing residues produced by coal-burning power plants.
Normally, drywall doesn't smell or emit sulfur gases, says Nancy Spurlock, a spokeswoman for National Gypsum. It doesn't import drywall or ingredients from China, she says.
Lennar, which refused interview requests, says it discovered the issue after noticing frequent air conditioning problems in homes.
Its consulting firm, Environ International, tested air in 79 affected Florida homes late last year and found sulfur compounds at levels well within health and safety limits or on par with outdoor air.
Knauf's testing firm, the Center for Toxicology and Environmental Health in Arkansas, recently tested 20 Florida homes with discolored wiring.
It found results similar to Environ's, says toxicologist Phillip Goad, who oversaw his firm's testing. Levels of carbonyl sulfide were in the range of salt marsh air. Exposure to carbon disulfide were well within safety levels set by The National Institute for Occupational Safety and Health.
At higher concentrations than found in the homes, carbonyl sulfide can irritate eyes and the respiratory system, and have other effects, says Goad. Carbon disulfide can produce symptoms including irritated eyes, headaches and fatigue.
The Consumer Product Safety Commission dispatched staffers to Florida late last month to investigate and will do health hazard testing, says spokesman Joe Martyak.
The Florida Department of Health is also testing. Its website says it has not "identified data suggesting an imminent or chronic health hazard at this time."
In January, the state inspected 12 homes built from 2004 through 2008 to assess possible health hazards and set up more sensitive testing protocols. Results are pending, it says.
Mine was changed in 2006
Knauf says odor complaints about its Chinese drywall surfaced in 2006. Its investigation determined that the drywall smelled like drywall made from natural gypsum in China. The drywall from one China mine used by Knauf contained iron disulfide, a naturally occurring mineral. That would account for the smell, Goad says.
Knauf says it stopped using the mine -- which other manufacturers also used -- in late 2006 after the issues arose. It says it's being "unfairly" tainted because it labels its imported drywall from China while others do not.
Knauf says it was responsible for just 20% of the Chinese drywall that came to the U.S. in 2006. It also says that Lennar has identified homes with odor and copper issues that included non-Knauf drywall.
Consultant Snider, too, says that other drywall makers "have not been as noticed as Knauf."
Lennar and Taylor Morrison, a home builder based in Arizona with a dozen affected Florida homes, say they're absorbing the expenses of relocating residents for the several months it can take to repair affected homes.
Lennar says it used the Chinese-made drywall in a small percentage of Florida homes built from November 2005 through November 2006. It's not being used in new homes, it says. Lennar and Taylor, both of which build homes outside of Florida, say they're not aware of homes outside of Florida being affected.
South Kendall Construction of Florida built Martinez's home. The company is still assessing the situation, according to its attorney, Kieran Fallon. It has tested several dozen Florida homes and expects about 50 to have problems, he says.
Martinez says he can't afford to rent another place while South Kendall figures out what to do. "We're caught between a rock and a hard place," he says.
Karin Vickers, a 45-year-old certified public accountant, is in the same situation.
She bought her Homestead, Fla., home across the street from Martinez, also in 2006, for $485,000. "I love the house," she says. But the air conditioning didn't work properly and was just replaced. Her TV also failed after a year. Her wall sockets turned black, and her bathroom smells like burned matches, she says.
Even if her house is repaired, she worries that issues could crop up again.
The real estate crash has knocked her home's value down about one-third, Vickers estimates. "It's dropped more now because of this," she says.
Copyright © 2009 USA TODAY, a division of Gannett Co. Inc., Julie Schmit. All rights reserved.
Then, he says, his large-screen TV mysteriously failed. Next, the air conditioner went. His bath towels smelled like rotten eggs. Visitors noted an odor in the house. Martinez says he's suffered new sinus problems and sleep apnea. His wife and son sneeze a lot.
The walls in the home, a recently filed class-action lawsuit alleges, were built with the same kind of Chinese-made drywall that tests have shown emit sulfur gases that corrode copper coils and electrical and plumbing components.
Similar problems have been linked to hundreds of Florida homes. Tens of thousands of homes there and in other states could be affected, say lawyers who have filed lawsuits on behalf of Florida homeowners. The discovery has created a firestorm that's engulfed an international building supplier, large and small homebuilders and dozens of subcontractors. The issue also has revived concerns about quality-control procedures of U.S. companies that use Chinese-made products, following episodes in recent years involving contaminated toothpaste and pet-food ingredients, lead-tainted toys and defective tires imported from China.
A leading U.S. home builder, Lennar, and a Chinese drywall manufacturer, Knauf Plasterboard Tianjin, say tests show the gases given off by the drywall pose no health hazards. Florida regulators and the federal Consumer Product Safety Commission are investigating.
Lawyers say far more testing needs to be done.
"If it can put holes in metal coils, how do we know it doesn't cause problems in children or adults?" asks attorney Jeremy Alters of Florida-based law firm Alters Boldt Brown Rash Culmo. Alters says he has clients who developed respiratory ailments "out of the blue" after moving into allegedly affected homes.
Knauf says Chinese drywall imports started in significant amounts in 2005 as a result of a shortage driven by the booming housing market and rebuilding after Hurricanes Katrina and Wilma.
In addition to lawsuits on behalf of Florida homeowners, a class-action lawsuit was recently filed by an Alabama homebuilder that has made air conditioning repairs on two dozen Alabama homes, says attorney Steven Nicholas. A class-action lawsuit has also been filed on behalf of Louisiana homeowners.
Lawyers say they're investigating more complaints in other states and Florida.
"We know for a fact that this product is in Virginia, Louisiana and California," says Charles LaDuca, of Washington, D.C.-based law firm Cuneo Gilbert & LaDuca. "The breadth of the problem is just unfolding."
Investigations began in 2004
So far, Florida is ground zero. Up to 1,000 homes in the southern part of the state may be affected, says Jack Snider, president of American Management Resources Corp. (AMRC). Working for homeowners and builders, the environmental consulting firm has tested drywall for gases and checked homes for odors and corrosion.
AMRC first began investigating odor complaints in 2004 and found drywall to be the cause. Because most drywall doesn't identify its origin, Snyder says, it took until 2006 before foreign-made drywall became the focus.
Homeowner lawsuits allege that the drywall has corroded air conditioning and refrigerator coils, microwaves, computer wiring, faucets and copper tubing.
Tests paid for by Lennar say the drywall appears to emit sulfur gases that can damage air conditioning coils, electrical plumbing components and other material.
In one test, copper pipe turned black after four weeks when placed in a sealed container with a piece of affected drywall, according to a lawsuit filed Jan. 30 by Lennar against Knauf Gips of Germany and its Chinese affiliate, Knauf Plasterboard Tianjin, and others. The pipe then started to corrode, Lennar says.
Lennar alleges that Knauf produced "defective" drywall. It also says subcontractors put it in homes without Lennar's knowledge. Lennar has said it has more than 80 affected homes in Florida and dozens more under review. It is relocating residents while it installs new drywall in homes.
"Lennar stands alongside its homeowners as a victim," its lawsuit says.
Plaintiffs' attorneys say residents have suffered a host of health issues, including rashes, new allergies, asthma and sore throats. Along with receiving compensation, they should be monitored long-term for health issues, says attorney Ervin Gonzalez of Colson Hicks Eidson. "This has been an economic, physical and emotional problem for victims," he says. Based on import records, he estimates that up to 60,000 U.S. homes may be affected, with about half in Florida.
Testing air
Drywall is made from gypsum, a mineral. Manufacturers also make synthetic gypsum by processing residues produced by coal-burning power plants.
Normally, drywall doesn't smell or emit sulfur gases, says Nancy Spurlock, a spokeswoman for National Gypsum. It doesn't import drywall or ingredients from China, she says.
Lennar, which refused interview requests, says it discovered the issue after noticing frequent air conditioning problems in homes.
Its consulting firm, Environ International, tested air in 79 affected Florida homes late last year and found sulfur compounds at levels well within health and safety limits or on par with outdoor air.
Knauf's testing firm, the Center for Toxicology and Environmental Health in Arkansas, recently tested 20 Florida homes with discolored wiring.
It found results similar to Environ's, says toxicologist Phillip Goad, who oversaw his firm's testing. Levels of carbonyl sulfide were in the range of salt marsh air. Exposure to carbon disulfide were well within safety levels set by The National Institute for Occupational Safety and Health.
At higher concentrations than found in the homes, carbonyl sulfide can irritate eyes and the respiratory system, and have other effects, says Goad. Carbon disulfide can produce symptoms including irritated eyes, headaches and fatigue.
The Consumer Product Safety Commission dispatched staffers to Florida late last month to investigate and will do health hazard testing, says spokesman Joe Martyak.
The Florida Department of Health is also testing. Its website says it has not "identified data suggesting an imminent or chronic health hazard at this time."
In January, the state inspected 12 homes built from 2004 through 2008 to assess possible health hazards and set up more sensitive testing protocols. Results are pending, it says.
Mine was changed in 2006
Knauf says odor complaints about its Chinese drywall surfaced in 2006. Its investigation determined that the drywall smelled like drywall made from natural gypsum in China. The drywall from one China mine used by Knauf contained iron disulfide, a naturally occurring mineral. That would account for the smell, Goad says.
Knauf says it stopped using the mine -- which other manufacturers also used -- in late 2006 after the issues arose. It says it's being "unfairly" tainted because it labels its imported drywall from China while others do not.
Knauf says it was responsible for just 20% of the Chinese drywall that came to the U.S. in 2006. It also says that Lennar has identified homes with odor and copper issues that included non-Knauf drywall.
Consultant Snider, too, says that other drywall makers "have not been as noticed as Knauf."
Lennar and Taylor Morrison, a home builder based in Arizona with a dozen affected Florida homes, say they're absorbing the expenses of relocating residents for the several months it can take to repair affected homes.
Lennar says it used the Chinese-made drywall in a small percentage of Florida homes built from November 2005 through November 2006. It's not being used in new homes, it says. Lennar and Taylor, both of which build homes outside of Florida, say they're not aware of homes outside of Florida being affected.
South Kendall Construction of Florida built Martinez's home. The company is still assessing the situation, according to its attorney, Kieran Fallon. It has tested several dozen Florida homes and expects about 50 to have problems, he says.
Martinez says he can't afford to rent another place while South Kendall figures out what to do. "We're caught between a rock and a hard place," he says.
Karin Vickers, a 45-year-old certified public accountant, is in the same situation.
She bought her Homestead, Fla., home across the street from Martinez, also in 2006, for $485,000. "I love the house," she says. But the air conditioning didn't work properly and was just replaced. Her TV also failed after a year. Her wall sockets turned black, and her bathroom smells like burned matches, she says.
Even if her house is repaired, she worries that issues could crop up again.
The real estate crash has knocked her home's value down about one-third, Vickers estimates. "It's dropped more now because of this," she says.
Copyright © 2009 USA TODAY, a division of Gannett Co. Inc., Julie Schmit. All rights reserved.
Monday, March 16, 2009
Nonprofit group touring US to help struggling homeowners
COLUMBIA, S.C. – March 16, 2009 – Philip and Gloria Spigner saw their monthly mortgage payments climb from $800 to $1,300. Carol and Butch Dycus have received foreclosure notices though they say they're not behind on their payments. And Tony Jumper's mortgage hasn't changed, but 26 people were laid off this week from his job.
They were among the hundreds of people who gathered here Friday to seek advice from a nonprofit group that finds ways to help at-risk homeowners lower their mortgage payments.
It was the third stop on the Neighborhood Assistance Corporation of America's nationwide "Save the Dream Tour," which offered mortgage restructuring help in Washington, D.C., last year and in Stamford, Conn., last month. The nonprofit also plans to visit areas hard-hit by foreclosure, like Florida and California.
Using paycheck stubs, interviews and tax filings, NACA counselors calculate what struggling homeowners can afford to pay, then negotiate with lenders who have signed agreements with the group.
Around 10,000 people had registered for the free counseling service before the event began Friday and a total of 20,000 were expected to participate over three days, said organizer Carmon Orta.
"Everyone is in an unaffordable mortgage right now whether it be that they were in a predatory loan and got duped into a bad interest rate or because of the economy they have a job loss," she said. "We will go to the lender's CEO's office. We will go and do what we have to do to sit with them until they sign a contract with us and agree to have real solutions and modifications for people."
U.S. House Majority Whip Jim Clyburn, D-S.C. and a fan of the group, said such efforts will help stabilize families and give them hope.
"And I think it will do a whole lot to help get this country back where it ought to be," he said.
Some lenders are beginning to recognize the problems with the foreclosure process and working with several nonprofit groups to restructure mortgages, Bank of America spokesman Rick Simon said.
"We're now looking more and more at the cost of going to foreclosure," he said. "And knowing what that cost is - and it's tens of thousands of dollars per foreclosure - it doesn't make much sense in today's environment."
NACA boasts of lowering the mortgage payments of more than 90 percent of the people who seek their services.
Carol Dycus hopes she's next. The 64-year-old, who can't work because she had a heart attack, said a prayer before leaving her Newberry home around 6 a.m. Friday and making the 40-mile trip to the Carolina Coliseum in the state capital.
It's been hard for her and her 59-year-old husband to make their mortgage payments, which increased under an adjustable rate from $569 to $624. The couple made the payments but still received foreclosure notices - a mistake that's happened before, Carol Dycus said.
Now, after months of trying to talk with their lender, they're ready to try another approach.
"It hurts," Carol Dycus said, showing three months of receipts for payments she says the mortgage company insists never arrived. Lenders "have a lot of money. We don't. My husband works every day - sick or well ... it's hard on us."
Philip and Gloria Spigner hope they won't have to leave the Columbia home where they raised their children.
"We're hoping after this that our adjustable rate won't be adjustable anymore," said Gloria Spigner, a 64-year-old nurse.
"All we want is a solution and to hang on to our home," said Philip Spigner, a 52, an assistant manager at a restaurant. "We want to put some money into the bank and be able to do some other things besides struggling every month to make the mortgage payment. That's all we want."
On the Net:
http://www.naca.com
Copyright © 2009 The Associated Press, Katrina Goggins (Associated Press Writer).
They were among the hundreds of people who gathered here Friday to seek advice from a nonprofit group that finds ways to help at-risk homeowners lower their mortgage payments.
It was the third stop on the Neighborhood Assistance Corporation of America's nationwide "Save the Dream Tour," which offered mortgage restructuring help in Washington, D.C., last year and in Stamford, Conn., last month. The nonprofit also plans to visit areas hard-hit by foreclosure, like Florida and California.
Using paycheck stubs, interviews and tax filings, NACA counselors calculate what struggling homeowners can afford to pay, then negotiate with lenders who have signed agreements with the group.
Around 10,000 people had registered for the free counseling service before the event began Friday and a total of 20,000 were expected to participate over three days, said organizer Carmon Orta.
"Everyone is in an unaffordable mortgage right now whether it be that they were in a predatory loan and got duped into a bad interest rate or because of the economy they have a job loss," she said. "We will go to the lender's CEO's office. We will go and do what we have to do to sit with them until they sign a contract with us and agree to have real solutions and modifications for people."
U.S. House Majority Whip Jim Clyburn, D-S.C. and a fan of the group, said such efforts will help stabilize families and give them hope.
"And I think it will do a whole lot to help get this country back where it ought to be," he said.
Some lenders are beginning to recognize the problems with the foreclosure process and working with several nonprofit groups to restructure mortgages, Bank of America spokesman Rick Simon said.
"We're now looking more and more at the cost of going to foreclosure," he said. "And knowing what that cost is - and it's tens of thousands of dollars per foreclosure - it doesn't make much sense in today's environment."
NACA boasts of lowering the mortgage payments of more than 90 percent of the people who seek their services.
Carol Dycus hopes she's next. The 64-year-old, who can't work because she had a heart attack, said a prayer before leaving her Newberry home around 6 a.m. Friday and making the 40-mile trip to the Carolina Coliseum in the state capital.
It's been hard for her and her 59-year-old husband to make their mortgage payments, which increased under an adjustable rate from $569 to $624. The couple made the payments but still received foreclosure notices - a mistake that's happened before, Carol Dycus said.
Now, after months of trying to talk with their lender, they're ready to try another approach.
"It hurts," Carol Dycus said, showing three months of receipts for payments she says the mortgage company insists never arrived. Lenders "have a lot of money. We don't. My husband works every day - sick or well ... it's hard on us."
Philip and Gloria Spigner hope they won't have to leave the Columbia home where they raised their children.
"We're hoping after this that our adjustable rate won't be adjustable anymore," said Gloria Spigner, a 64-year-old nurse.
"All we want is a solution and to hang on to our home," said Philip Spigner, a 52, an assistant manager at a restaurant. "We want to put some money into the bank and be able to do some other things besides struggling every month to make the mortgage payment. That's all we want."
On the Net:
http://www.naca.com
Copyright © 2009 The Associated Press, Katrina Goggins (Associated Press Writer).
Saturday, March 14, 2009
BofA seeks more jumbo mortgages
WASHINGTON – March 13, 2009 – Bank of America Corp is seeking to produce more "jumbo" mortgages, which can range from $417,000 in most areas to as much as $729,750, Barbara Desoer, the bank's head of mortgage, home equity and insurance services recently told Bloomberg in an interview.
"Bank of America has balance-sheet capacity and we've allocated it to jumbos given our presence in some of the states and regions where that's important," Desoer was quoted as saying.
The bank sees an opportunity to issue more of the loans with Merrill Lynch's "mass-affluent" customers, even as it continues to integrate the acquired company, she said.
To keep up with mortgage demand the bank has added roughly 3,000 employees to its origination unit, including about 1,000 new to the company and 500 shifted from its home-equity division, as well temporary workers, she said.
She was also reported as saying that the bank's purchase of Countrywide Financial Corp was paying off.
"Volume is good, application quality is holding up and the acquisition of Countrywide is really paying off for us with the additional capacity," she was quoted as saying.
Copyright © 2009 AFX News Limited. All rights reserved.
"Bank of America has balance-sheet capacity and we've allocated it to jumbos given our presence in some of the states and regions where that's important," Desoer was quoted as saying.
The bank sees an opportunity to issue more of the loans with Merrill Lynch's "mass-affluent" customers, even as it continues to integrate the acquired company, she said.
To keep up with mortgage demand the bank has added roughly 3,000 employees to its origination unit, including about 1,000 new to the company and 500 shifted from its home-equity division, as well temporary workers, she said.
She was also reported as saying that the bank's purchase of Countrywide Financial Corp was paying off.
"Volume is good, application quality is holding up and the acquisition of Countrywide is really paying off for us with the additional capacity," she was quoted as saying.
Copyright © 2009 AFX News Limited. All rights reserved.
Thursday, March 12, 2009
Home-value insurance may be the push buyers need
CHICAGO – March 12, 2009 – There are would-be home buyers out there who are ready and able, but just not willing. They can’t bring themselves to pull the trigger.
The way they look at this angst-riddled market, buying a home could be akin to driving a new car off the dealer’s lot – instant depreciation. So they just won’t go there.
Home values can and do vary from neighborhood to neighborhood, but the painful overall stats are impossible to evade: Between the general peak of the market in the fourth quarter of 2005 and Jan. 31, the median price paid for homes in the Chicago region slipped from $274,716 to $185,000, according to the Illinois Association of Realtors.
And price declines apparently beget price declines, as many buyers just park on the sidelines and wait.What if those buyers had insurance policies that would protect them if their homes lost value?
That’s the proposition of Joe Hanauer, a major player in the real estate industry. He’s proposing that Uncle Sam offer the insurance as yet another variation on a housing bailout.
“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,” said Hanauer, who’s chairman of Move Inc., operator of the Realtor.com listings site for the National Association of Realtors.
“The avalanche of falling home prices continues to bury consumers in fear, uncertainty and doubt,” said Hanauer, who formerly headed Coldwell Banker’s operations in Chicago. He’s shopping the insurance idea around Washington, including talks with Department of Housing and Urban Development Secretary Shaun Donovan and “whoever will listen,” he said.
Hanauer suggests such a plan could play out in several scenarios, depending on how much of the tab the government picked up and how much the sellers and/or buyers would chip in. The premium would amount to 1 percent to 3 percent of a home’s purchase price, and the insurance would pay off if the house were sold for a loss after three years or more.
It would cover a loss of up to 10 percent of the price paid. But if the house were sold for a gain, those sellers would reimburse the government for part of the profit, although Hanauer did not suggest how much.
He expects the costs of the plan would range from $20 billion to $150 billion, depending on how much of the insurance would be underwritten by the federal government and how much by consumers, and on how much prices declined.
This kind of coverage exists in the private sector, though it’s relatively new and untested. For example, EquityLock Financial, a company based in Utah, offers contracts – as opposed to insurance policies – that agree to pay homeowners if they lose money when they sell later, an amount equal to the percentage of the downturn of their local market, based on an agreed-upon home-price index.
Steven Senter, broker/owner of Keller Williams Fox Valley Realty in St. Charles, Ill., says his company began representing EquityLock in Illinois several weeks ago, and has had a couple of deals that used it.
“It’s a new product, and we’ve never needed it before,” Senter said. “When have you seen a decline like we’re seeing?”
Senter said some form of price reassurance could, indeed, goose sales on a broad level, though he said the market also is hampered by the strained job market and tight mortgage-lending standards.
But Hanauer said he’s convinced the problem outstrips the capacity of the private sector to provide insurance.
“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 said.
However, the federal government already appears to have contemplated the idea and said no, thank you.“I don’t think we would be either willing or able to target house prices,” said Federal Reserve chairman Ben Bernanke at a conference in December, when asked about the possibility of government price insurance.
“I think that would be an impossible thing to do, given the size of the housing market.”
But December seems like a long time ago, given what’s happened to the economy, and Hanauer is undeterred.
He’s expecting the federal economic stimulus to be helpful but suggests that considering price insurance as Plan B (or C or D or E, depending on how you chart the government’s efforts so far) would be in order.“The time to deal with the mechanism is not the day you need it; it’s months ago,” he said.
© 2009 Chicago Tribune. Distributed by McClatchy-Tribune News Service, Mary Umberger.
The way they look at this angst-riddled market, buying a home could be akin to driving a new car off the dealer’s lot – instant depreciation. So they just won’t go there.
Home values can and do vary from neighborhood to neighborhood, but the painful overall stats are impossible to evade: Between the general peak of the market in the fourth quarter of 2005 and Jan. 31, the median price paid for homes in the Chicago region slipped from $274,716 to $185,000, according to the Illinois Association of Realtors.
And price declines apparently beget price declines, as many buyers just park on the sidelines and wait.What if those buyers had insurance policies that would protect them if their homes lost value?
That’s the proposition of Joe Hanauer, a major player in the real estate industry. He’s proposing that Uncle Sam offer the insurance as yet another variation on a housing bailout.
“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,” said Hanauer, who’s chairman of Move Inc., operator of the Realtor.com listings site for the National Association of Realtors.
“The avalanche of falling home prices continues to bury consumers in fear, uncertainty and doubt,” said Hanauer, who formerly headed Coldwell Banker’s operations in Chicago. He’s shopping the insurance idea around Washington, including talks with Department of Housing and Urban Development Secretary Shaun Donovan and “whoever will listen,” he said.
Hanauer suggests such a plan could play out in several scenarios, depending on how much of the tab the government picked up and how much the sellers and/or buyers would chip in. The premium would amount to 1 percent to 3 percent of a home’s purchase price, and the insurance would pay off if the house were sold for a loss after three years or more.
It would cover a loss of up to 10 percent of the price paid. But if the house were sold for a gain, those sellers would reimburse the government for part of the profit, although Hanauer did not suggest how much.
He expects the costs of the plan would range from $20 billion to $150 billion, depending on how much of the insurance would be underwritten by the federal government and how much by consumers, and on how much prices declined.
This kind of coverage exists in the private sector, though it’s relatively new and untested. For example, EquityLock Financial, a company based in Utah, offers contracts – as opposed to insurance policies – that agree to pay homeowners if they lose money when they sell later, an amount equal to the percentage of the downturn of their local market, based on an agreed-upon home-price index.
Steven Senter, broker/owner of Keller Williams Fox Valley Realty in St. Charles, Ill., says his company began representing EquityLock in Illinois several weeks ago, and has had a couple of deals that used it.
“It’s a new product, and we’ve never needed it before,” Senter said. “When have you seen a decline like we’re seeing?”
Senter said some form of price reassurance could, indeed, goose sales on a broad level, though he said the market also is hampered by the strained job market and tight mortgage-lending standards.
But Hanauer said he’s convinced the problem outstrips the capacity of the private sector to provide insurance.
“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 said.
However, the federal government already appears to have contemplated the idea and said no, thank you.“I don’t think we would be either willing or able to target house prices,” said Federal Reserve chairman Ben Bernanke at a conference in December, when asked about the possibility of government price insurance.
“I think that would be an impossible thing to do, given the size of the housing market.”
But December seems like a long time ago, given what’s happened to the economy, and Hanauer is undeterred.
He’s expecting the federal economic stimulus to be helpful but suggests that considering price insurance as Plan B (or C or D or E, depending on how you chart the government’s efforts so far) would be in order.“The time to deal with the mechanism is not the day you need it; it’s months ago,” he said.
© 2009 Chicago Tribune. Distributed by McClatchy-Tribune News Service, Mary Umberger.
Wednesday, March 11, 2009
Insurance commissioner releases his legislative priorities
TALLAHASSEE, Fla. – March 11, 2009 – Florida Insurance Commissioner Kevin McCarty presented his bosses on Tuesday with his legislative priorities for the 2009 session.
McCarty told Gov. Charlie Crist and members of the Cabinet that the top issues his department plans to back this year include legislation to ban the use of certain criteria in determining insurance rates, including an applicant’s profession, education and credit score. McCarty contends that such criteria have historically discriminated against blacks and Hispanics and those with a limited credit history.
Agriculture Commissioner Charles Bronson questioned McCarty on whether the same problems with creditworthiness that have plagued the home-lending market could affect the insurance industry if the bills (HB 683, SB 1524) become law. But McCarty defended the proposed legislation – sponsored by Sen. Ronda Storms (R-Valrico) and Rep. Priscilla Taylor (D-West Palm Beach) – saying California already has a similar law, and it hasn’t affected the market there.
McCarty said people should not have their insurance rates changed based on circumstances beyond their control.
Other bills backed by the Office of Insurance Regulation deal with title insurance rates and stranger-originated life insurance, in which an investor buys a life insurance policy for less than the amount of the death benefit.
The office also supports legislation to block private insurers from placing wind-only coverage for homes in Citizens Property Insurance Corporation while writing the rest of the homeowner coverage. However, McCarty’s list of legislative priorities does not include any recommendations on whether other changes should be made to Citizens or whether the size of the Florida Hurricane Catastrophe Fund should be scaled back.
“My role and responsibility is to enforce the laws written on the books,” McCarty says. “It’s up to the Florida Legislature in their infinite wisdom to make determinations of public policy, and we’ll be happy to provide any guidance with the potential consequences of those decisions.”
Source: News Service of Florida
McCarty told Gov. Charlie Crist and members of the Cabinet that the top issues his department plans to back this year include legislation to ban the use of certain criteria in determining insurance rates, including an applicant’s profession, education and credit score. McCarty contends that such criteria have historically discriminated against blacks and Hispanics and those with a limited credit history.
Agriculture Commissioner Charles Bronson questioned McCarty on whether the same problems with creditworthiness that have plagued the home-lending market could affect the insurance industry if the bills (HB 683, SB 1524) become law. But McCarty defended the proposed legislation – sponsored by Sen. Ronda Storms (R-Valrico) and Rep. Priscilla Taylor (D-West Palm Beach) – saying California already has a similar law, and it hasn’t affected the market there.
McCarty said people should not have their insurance rates changed based on circumstances beyond their control.
Other bills backed by the Office of Insurance Regulation deal with title insurance rates and stranger-originated life insurance, in which an investor buys a life insurance policy for less than the amount of the death benefit.
The office also supports legislation to block private insurers from placing wind-only coverage for homes in Citizens Property Insurance Corporation while writing the rest of the homeowner coverage. However, McCarty’s list of legislative priorities does not include any recommendations on whether other changes should be made to Citizens or whether the size of the Florida Hurricane Catastrophe Fund should be scaled back.
“My role and responsibility is to enforce the laws written on the books,” McCarty says. “It’s up to the Florida Legislature in their infinite wisdom to make determinations of public policy, and we’ll be happy to provide any guidance with the potential consequences of those decisions.”
Source: News Service of Florida
Tuesday, March 10, 2009
Nonprofit adds home refinancing initiative
WASHINGTON – March 10, 2009 – HOPE NOW, a nonprofit alliance of mortgage companies, housing counselors and others in the lending business, has added a new tool to its website enabling homeowners to initiate a loan modification or refinance with their lenders by submitting online application.
The new online intake form, at www.hopenow.com, asks homeowners for information about their lender and mortgage, as well questions about their income, debt, expenses and other things needed to proceed with a loan modification.
HOPE NOW said it launched the online tool in anticipation of the Obama administration’s $75 billion home rescue plan detailed last week. Lenders are expecting a large number of inquiries from homeowners seeking help in the coming months.
Once homeowners submit their application through the website, it is then routed directly to their mortgage servicing company or lender. Borrowers should get confirmation from their lender within a week that the process has begun, HOPE NOW said in a statement.
The nonprofit said that homeowners dealing directly with their mortgage company could receive help faster.
To make an online application, visit www.hopenow.com or call (888) 995-HOPE.
The new online intake form, at www.hopenow.com, asks homeowners for information about their lender and mortgage, as well questions about their income, debt, expenses and other things needed to proceed with a loan modification.
HOPE NOW said it launched the online tool in anticipation of the Obama administration’s $75 billion home rescue plan detailed last week. Lenders are expecting a large number of inquiries from homeowners seeking help in the coming months.
Once homeowners submit their application through the website, it is then routed directly to their mortgage servicing company or lender. Borrowers should get confirmation from their lender within a week that the process has begun, HOPE NOW said in a statement.
The nonprofit said that homeowners dealing directly with their mortgage company could receive help faster.
To make an online application, visit www.hopenow.com or call (888) 995-HOPE.
First-time homebuyers: How to get the $8,000 tax credit
First-time homebuyers:
How to get the $8,000 tax credit Tax Credit details
Every homebuyer has unique circumstances and specific questions. The National Association of Home Builders (NAHB) has launched a consumer Web site with detailed information and an extensive list of frequently-asked questions. To find out more about the $8,000 tax credit, go here.
WASHINGTON – Feb. 17, 2009 – How does a first-time homebuyer take advantage of the $8,000 tax credit that President Obama is expected to sign into law tomorrow? 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 between Jan. 1, 2009, and Dec. 1, 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 to get the $8,000 tax credit Tax Credit details
Every homebuyer has unique circumstances and specific questions. The National Association of Home Builders (NAHB) has launched a consumer Web site with detailed information and an extensive list of frequently-asked questions. To find out more about the $8,000 tax credit, go here.
WASHINGTON – Feb. 17, 2009 – How does a first-time homebuyer take advantage of the $8,000 tax credit that President Obama is expected to sign into law tomorrow? 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 between Jan. 1, 2009, and Dec. 1, 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.
Monday, March 9, 2009
State Farm requesting hearing on Florida exit terms
TALLAHASSEE, Fla. – March 9, 2009 – State Farm Florida asked for a hearing Friday to appeal the state’s conditions for the company’s planned exit of Florida’s property insurance market.Meeting Friday’s deadline, State Farm said, was a preemptive move in case a major disagreement with the state surfaces later. A plan may be worked out before there’s ever a hearing.State Farm Florida Insurance Co. in January announced it would drop its 1.2 million property insurance policies because it said it’s not collecting enough in premiums to keep pace with claims and other expenses.State Farm, which has more than 120,000 property insurance policies in Broward and Palm Beach counties, and the Office of Insurance Regulation are working out a plan to shift policies to other insurers over the next few years.“We’re hopeful we can reach an agreement because we both ... want a smooth transition” of the policies, State Farm spokesman Chris Neil said.The insurance regulation office “will review the petition carefully and, at the same time, we’ll continue to work with State Farm to place its customers into other private companies,” office spokesman Ed Domansky said.State Farm has said it’s losing about $20 million each month on its property insurance business in Florida, in part because of hefty discounts it provides to customers that fortify their homes against hurricanes. State Farm said the company needed rate increases – of 47 percent or 67 percent on an average statewide basis – that the state rejected.State Farm plans to shed its policies – which cover homes, boats, businesses, and condominium and apartment units – over two years when customers are up for renewal. The company must provide 180 days’ notice.In a 76-page petition filed to the Division of Administrative Hearings, State Farm disputes Florida Insurance Commissioner Kevin McCarty’s authority to set requirements that the company:• Continue paying certain taxes and fees for one year after its last policy is dropped.• Pay for the advertising needed to implement the withdrawal plan.• Submit an alternative plan for providing discounts for homes that are fortified against hurricanes. A primary reason State Farm said it needed the rate increase was to offset the discounts’ hit on its claims-paying fund.In addition to specific areas of contention, State Farm also challenged the extent of McCarty’s authority to block its departure or set stringent requirements in the first place.State law said McCarty should approve an insurer’s departure so long as it isn’t hazardous to policyholders or the public.Copyright © 2009s Sun Sentinel, Fort Lauderdale, Fla., Julie Patel. Distributed by McClatchy-Tribune Information Services.
Affordable Housing Projects In Jeopardy
By CHRISTIAN M. WADE
cwade@tampatrib.com
Published: March 7, 2009
TAMPA - Several affordable housing projects in Hillsborough County are imperiled by the Florida Legislature's decision to pull $190 million out of a pot of state money intended to build apartments and moderately priced homes for working-class families.
The Richman Group, a West Palm Beach-based developer, is planning to break ground this year on three affordable housing complexes in unincorporated Hillsborough, nearly $96 million in projects that combined would provide more than 670 low-rent apartments.
The projects include the $48.2 million Kensington Gardens complex off Progress Boulevard; the $32.9 million Cross Creek complex off U.S. 301 and Sligh Avenue; and the $15.6 million Sabal Ridge development off Martin Luther King Jr. Boulevard.
To help offset the cost of construction, the developers had been pledged more than $15 million in additional funding from Florida's State Apartment Incentive Loan program.
But the Legislature's decision to pull money out of the state's affordable housing fund to plug a $2.3 billion budget gap means those projects might never get off the ground.
"If we can't find alternative financing, it could mean that these projects don't go forward," said Todd Fabbri, the company's executive vice president. "We are very concerned."
The Florida Housing Finance Corporation, which provides funding for affordable housing projects, wants to plug the gaps in financing by allowing developers to apply for federal tax credits in exchange for money the state government had pledged to their projects.
Under the proposed changes, set for a vote by the housing corporation's board of directors on March 13, a project would have to be located in a county that has had a 95 percent occupancy rate of existing affordable housing units during the past six months to qualify for housing tax credits.
In theory, developers would be able to sell credits to investors in exchange for financing.
But affordable housing officials estimate only about six of Florida's 67 counties would qualify for credits under the proposed changes, and Hillsborough is not one of them.
"This would basically say there isn't a need for more affordable housing in the county," said Sharon West, Tampa's housing and community development manager.
Currently, Hillsborough's occupancy rate is estimated at slightly more than 90 percent; Tampa's is estimated at 94.3 percent. Both fall short of the 95 percent threshold.
Florida's affordable housing trust fund was created in 1992 to generate money for low-income housing in the state. It was named after the late legislator William Sadowski.
County officials say the Legislature's decision to pull the money out of the fund will hurt those who can't qualify to buy homes even in Florida's depressed housing market.
"It's going to impact us tremendously," said Valmarie Turner, director of Hillsborough's affordable housing office. "With the economic recession, there has never been a greater demand for affordable housing and losing this funding will affect those most in need."
Statewide, some 50 low-income projects could be affected by the Legislature's decision to pull the money, and developers who had been pledged those dollars for projects are threatening to file lawsuits if the state reneges on the commitments.
Housing corporation spokeswoman Cecka Green said the state agency is caught between developers who were pledged funding and lawmakers who are facing a record budget deficit.
"We have to give that money back to the Legislature," she said. "We have no choice."
Mark Hendrickson, a financial adviser for Hillsborough's affordable housing programs, said the housing corporation's methodology to determine the demand for rental housing is flawed.
"There's a misconception that foreclosures and falling house prices mitigate the need for new affordable rental housing," he said. "As if housing that once sold for $225,000 and now sells for $170,000 is somehow affordable to a family earning $30,000 a year."
cwade@tampatrib.com
Published: March 7, 2009
TAMPA - Several affordable housing projects in Hillsborough County are imperiled by the Florida Legislature's decision to pull $190 million out of a pot of state money intended to build apartments and moderately priced homes for working-class families.
The Richman Group, a West Palm Beach-based developer, is planning to break ground this year on three affordable housing complexes in unincorporated Hillsborough, nearly $96 million in projects that combined would provide more than 670 low-rent apartments.
The projects include the $48.2 million Kensington Gardens complex off Progress Boulevard; the $32.9 million Cross Creek complex off U.S. 301 and Sligh Avenue; and the $15.6 million Sabal Ridge development off Martin Luther King Jr. Boulevard.
To help offset the cost of construction, the developers had been pledged more than $15 million in additional funding from Florida's State Apartment Incentive Loan program.
But the Legislature's decision to pull money out of the state's affordable housing fund to plug a $2.3 billion budget gap means those projects might never get off the ground.
"If we can't find alternative financing, it could mean that these projects don't go forward," said Todd Fabbri, the company's executive vice president. "We are very concerned."
The Florida Housing Finance Corporation, which provides funding for affordable housing projects, wants to plug the gaps in financing by allowing developers to apply for federal tax credits in exchange for money the state government had pledged to their projects.
Under the proposed changes, set for a vote by the housing corporation's board of directors on March 13, a project would have to be located in a county that has had a 95 percent occupancy rate of existing affordable housing units during the past six months to qualify for housing tax credits.
In theory, developers would be able to sell credits to investors in exchange for financing.
But affordable housing officials estimate only about six of Florida's 67 counties would qualify for credits under the proposed changes, and Hillsborough is not one of them.
"This would basically say there isn't a need for more affordable housing in the county," said Sharon West, Tampa's housing and community development manager.
Currently, Hillsborough's occupancy rate is estimated at slightly more than 90 percent; Tampa's is estimated at 94.3 percent. Both fall short of the 95 percent threshold.
Florida's affordable housing trust fund was created in 1992 to generate money for low-income housing in the state. It was named after the late legislator William Sadowski.
County officials say the Legislature's decision to pull the money out of the fund will hurt those who can't qualify to buy homes even in Florida's depressed housing market.
"It's going to impact us tremendously," said Valmarie Turner, director of Hillsborough's affordable housing office. "With the economic recession, there has never been a greater demand for affordable housing and losing this funding will affect those most in need."
Statewide, some 50 low-income projects could be affected by the Legislature's decision to pull the money, and developers who had been pledged those dollars for projects are threatening to file lawsuits if the state reneges on the commitments.
Housing corporation spokeswoman Cecka Green said the state agency is caught between developers who were pledged funding and lawmakers who are facing a record budget deficit.
"We have to give that money back to the Legislature," she said. "We have no choice."
Mark Hendrickson, a financial adviser for Hillsborough's affordable housing programs, said the housing corporation's methodology to determine the demand for rental housing is flawed.
"There's a misconception that foreclosures and falling house prices mitigate the need for new affordable rental housing," he said. "As if housing that once sold for $225,000 and now sells for $170,000 is somehow affordable to a family earning $30,000 a year."
Subscribe to:
Posts (Atom)