Real Estate News 05/15/08
HOMEOWNERS INSURANCE
Several Allstate insurance subsidiaries were suspended from writing new policies after an appeals court ruled Wednesday that the company could be punished by the state for not turning over documents on how it sets property insurance rates. However, the suspension may not last long, as Allstate has continued to give regulators the documents requested while the dispute went through the courts.
LAWSUIT
A federal judge in Los Angeles has ruled that a shareholder lawsuit against Countrywide Financial Corp. executives and directors should go to trial, rejecting arguments to dismiss the case. The suit contends that Countrywide directors and officers failed to provide enough oversight of the lender and misled shareholders about the company’s true financial state.
HOUSING AID
Housing and finance experts discussed the mortgage crisis and ways to restore stability in the system earlier this week in Washington, D.C. "The right way to tackle the mortgage crisis is to have pinpoint, targeted efforts that address each variable in the housing crisis without asking the taxpayer to bailout lenders or to cover loans that are best described as moral hazards," said FHA Commissioner Brian Montgomery.
Real Estate News 05/14/08
MY SAFE FLORIDA HOME
Home improvement grants: Going, going (almost) gone. The My Safe Florida Home program will achieve its goal of 35,000 grants to homeowners by the end of this month, and the first-come, first-served program will stop accepting grant applications. The free home inspections, however, will continue.
FLOOD INSURANCE
The Senate agreed Tuesday to write off more than $17 billion in National Flood Insurance Program debt and extend the program for another five years while increasing premiums and reducing subsidies. The bill now must be reconciled with a House bill before receiving final approval.
MORTGAGE FRAUD
Reports of suspected mortgage fraud rose 31 percent in fiscal 2007, according to a new FBI report, and the U.S. is on track for even more in fiscal 2008. The Mortgage Asset Research Institute said earlier this year that Florida led the nation in mortgage fraud in 2007 for the second straight year, followed by Nevada, Michigan and California.
FORECLOSURES
Nationwide, 243,353 homes received at least one foreclosure-related filing in April, up 65 percent from 147,708 in the same month last year and up 4 percent since March, RealtyTrac Inc. announced.
Real Estate News 05/13/08
FLORIDA HOME SALES
Florida Realtors reported positive signs in their local housing markets during first quarter 2008, noting a slower rate of expansion for inventory levels and an increase in pending home sales in some areas. Another positive note: A total of 8,581 existing condos sold statewide during the quarter, up 8.3 percent over fourth quarter 2007. "If we look at what is happening month-over-month for 2008, it appears that the bottom may be here," says 2008 FAR President Chuck Bonfiglio. "We are now seeing more activity, more sales and even prices starting to rise in some markets."
Quarterly analysis for homes and condominiums for the Naples area can be found on the following pages: Naples Homes, Naples Condos
LENDERS
Monday had good news and bad news for lenders. While a number of companies posted dismal first-quarter earnings, investors seemed to view the quarter as the bottom of the down cycle and proceeded to bid up mortgage lenders’ stock prices, hoping to get a high return after the market completely rebounds.
MORTGAGES
Mortgages could become easier to secure as investors move more money into mortgage-backed securities (MBS), which pool collections of mortgages. MBS got a bad name recently because some held subprime loans, but investors have started to view them as safe again - and a relative bargain.
Real Estate News 05/12/08
REAL ESTATE ECONOMY
The nation’s foreclosure hemorrhage slowed a bit last month, according to Foreclosures.com, down 5 percent from March. "The sky isn’t falling, and the bottom of the housing market is in sight," says Alexis McGee, company president.
FEDERAL HOUSING ADMINISTRATION
The FHA will implement a flexible premium pricing structure for loans beginning July 14, 2008. Currently, FHA is "one size fits all" that charges borrowers 1.50 percent of the loan balance upfront and .50 percent annually regardless of their credit standing. Under the new rule, it will range from 1.25 percent to 2.25 percent.
Real Estate News 05/09/08
MORTGAGE RATES
Rates on 30-year mortgages edged down slightly to average 6.05 percent this week, but remained above 6 percent for the third straight week, according to Freddie Mac’s weekly nationwide survey.
REAL ESTATE INVESTING
Despite the sluggish economy, investors this year are putting their money into funds that invest in real estate investment trusts (REITs), a turn-around of recent trends. A total of $1.23 billion flowed into domestic real estate investment funds in the first three months of the year, according to new research. Investors are doing this because they believe that real estate markets are stabilizing and the price of investing in a real estate investment trust with low prices will pay handsomely for them.
HOUSING AID
The House on Thursday passed a massive homeowner rescue plan to provide cheaper, government-backed mortgages to half a million debt-ridden borrowers and bolster an economy hurt by the housing crisis. The Senate now must consider the bill and President Bush has threatened a veto.
MORTGAGE PROBLEMS
Mortgage delinquencies are spreading beyond the subprime market, as new data shows that more borrowers with good credit have fallen behind on their house payments. About 2.3 percent of prime loans were 60 days past due in February, the highest level in at least a decade, according to First American CoreLogic LoanPerformance.
Real Estate News 05/08/08
DISASTER INSURANCE
A Gulf Coast-backed effort to add wind coverage to the National Flood Insurance Program was defeated Wednesday in the Senate amid concerns that it would be too expensive. But lawmakers in states like Florida pleaded for relief: "People who have paid every premium and have never filed a claim are simply locked out of the market," said United States Senator Mel Martinez, Republican from Florida.
RESPA REFORM
Have something to say about Real Estate Settlement Practices Act reform? Housing and Urban Development announced yesterday that it would extend its public comment period for 30 days, previously slated to expire May 13. Congress requested the extension, but Housing and Urban Development says it will still have reform in place before President Bush leaves office.
ECONOMY
Former Federal Reserve chairman Alan Greenspan said during a TV interview that the U.S. has slipped into a recession - but only a mild one that he thinks will improve when residential property prices begin to stabilize and the pressure on financial institutions to write off mortgage-related losses eases up.
The write-off of mortgage-related losses will ease as result of residential real estate prices stabilizing due to the accounting practices and procedures used by lenders. As prices drop for real estate (collateral) the lenders have to write-down the value of the collateral to the lower of cost or market. So, when prices stabilize the lenders do not have to write-down the collateral.
Real Estate News 05/07/08
PENDING HOME SALES
National Association of REALTORS predicts soft home sales in the near term and a turnaround by summer - but Lawrence Yun, NAR chief economist, says the extent of an expected recovery hinges on better access to affordable loans. Pending sales edged down 1 percent in March.
The pending sales in the Naples area in March for both homes and condos were higher than March 2007 and higher than February 2008.
In the Bonita Springs area increases in the number of pending sales for both homes and condos were higher than March 2007, as well as March 2006. The pending sales were also higher than February’s pending sales.
The Estero area pending sales in March for both homes and condos were higher than the previous year. Compared to February homes pending sale were higher, but the condo market was down.
HOUSING MARKET
Florida’s housing market may have reached the bottom, according to the St. Joe Co., the state’s biggest landowner. St. Joe Chief Executive Officer Peter Rummell points to stabilization in the residential inventory as a positive sign, adding that buyers must be "retrained" to recognize the importance of buying a home now.
Global statements can be misleading - there are areas where the bottom has not been reached at this point. Some indicators such as a lower number of new listings, higher volume of closed sales, higher volume of pending sales and reduction in the number of residences point this direction. Buyers need to be aware of where historical price appreciation and current market values are intersecting is an indicator of the housing market reaching the bottom.
FORECLOSURES
In testimony before a congressional committee yesterday, witnesses stated that mortgage lenders are making the current foreclosure crisis worse by pursuing unjustified foreclosures and charging questionable fees, with Countrywide cited as one of the worst. Countrywide admitted some mistakes but disputed the accusations.
DISASTER INSURANCE
The Government Accountability Office isn’t keen on a House proposal to expand the federal flood insurance program by adding coverage for wind damage, saying that Federal Emergency Management Adminstration faces several obstacles. The GAO opinion could complicate efforts by lawmakers in hurricane-prone states like Florida to control the cost of homeowners’ insurance.
HOUSING AID
The White House on Tuesday threatened a veto of Democrats’ broad housing rescue plan, calling it a burdensome bailout that would open taxpayers to too much risk. Many House Republicans agree. The measure is "going to reward scam artists and reward those who were speculating in the marketplace," says Rep. John Boehner of Ohio, the House Republican leader.
Real Estate News 05/06/08
HOMETOWN DEMOCRACY
How much would the Hometown Democracy constitutional amendment - which would force voters to approve any proposed land use change - cost local governments? The Supreme Court is currently hearing arguments about the wording of the amendment’s financial impact statement, which must also appear on the ballot.
FORECLOSURES
The head of the Federal Reserve urged Congress to do more to help at-risk homeowners. "Doing what we can to avoid preventable foreclosures is not just in the interest of lenders and borrowers. It’s in everybody’s interest," said Federal Reserve Chairman Ben Bernanke.
SUBPRIME MORTGAGES
It’s official: Federal authorities have formed a task force to determine if lenders or Wall Street firms participated in fraud during the mortgage boom years, though it’s too early to say if any crime was committed. The task force includes the Federal Bureau of Investigations and United States Postal Inspection Service.
JUMBO LOANS
United States Representative Barney Frank, Democrat from Massachusetts, said Monday that the House Financial Services Committee would hold a May 21 hearing to find out why so-called jumbo mortgages remain difficult to get and continue to carry high interest rates, despite new rules that took effect April 1.
Real Estate News 05/05/08
FLOOD INSURANCE
The U.S. Senate could consider the National Flood Insurance Program (NFIP) reauthorization bill this week. The bill forgives the program’s $17.3 billion in debt related to Hurricane Katrina and does not include a provision allowing NFIP to also offer wind coverage.
SUBPRIME MORTGAGES
In the boom times, did mortgage lenders know that many mortgage applications listed exaggerated income yet approve them anyway? The New York Times reported Sunday that federal investigators think that’s possible, and that they plan to expand their probe of mortgage industry practices.
FORECLOSURES
Democrats, working to build Republican support for a broad homeowner rescue plan, will pair the bill this week with several housing measures President Bush has demanded.
HOME SELLERS
It’s a challenge to sell a home in today’s market, but the battle eases considerably with careful preparation. Sellers should focus on the top 10 issues. Curb appeal, kitchens, bathrooms and doors head the list.
REAL ESTATE MARKET
It can’t be a slow market for sellers without it also being a dynamic market for buyers. Buyers have lots of homes to choose from, time to browse, and, typically, the advantage in negotiations.
Photo credit: Sciondriver
Real Estate News 05/02/08
HOMEOWNERS INSURANCE
The Florida Legislature has fixed its seal of approval on a homeowners insurance bill and sent it to Govenor Crist, who is expected to sign it. Once approved, the new law, among other things, extends a freeze on Citizens rates, helps companies remove policies from Citizens, and requires insurers to pay any undisputed part of an insurance claim within 90 days.
MORTGAGES
As private lenders tighten standards and mortgage loans become harder to get, Federal Housing Administration loans, which waned during the housing boom years, are once again a top choice for homebuyers with spotty credit.
FORECLOSURE FRAUD
When a herd’s weakest members stumble (homeowners facing foreclosure), vultures (some foreclosure rescue services) swoop down to finish the job. In an effort to protect these Florida homeowners, however, the state Senate approved a foreclosure fraud bill yesterday that now heads to the governor’s desk for a signature.
MORTGAGE RATES
Rates on 30-year mortgages remained above 6 percent and almost unchanged this week. Experts polled by Bankrate.com generally agree that rates will increase or remain steady in the short term.