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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.
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