Senate passes homeowner's insurance bill tougher on companies
By Julie Patel South Florida Sun-Sentinel
April 17, 2008
The Florida Senate approved a sweeping property insurance bill Wednesday touted as a "homeowners' bill of rights."If legislators last year were focused on lowering homeowner's insurance rates, this year they're set on drafting an array of laws to hold insurers accountable and equip the state to be a tougher watchdog.Insurance industry representatives said insurers who weren't scared away from Florida last year will be this year — if this bill becomes law. And that is far from certain since House leaders have reservations about much of it."This is about every consumer getting a fair shake at having a fair and square, straight-up relationship with their carrier," said Sen. Jeff Atwater, R- North Palm Beach, a sponsor of the bill. "It's really time that consumers deserve to be front and center in the insurance debate rather than it being about what the insurance industry needs."
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What's next with state homeowner's insurance legislation?
Complete coverage: Florida's Insurance Crisis
Industry representatives issued several statements after the bill passed 32-7."This bill attempts to punish insurance companies ... at the expense of encouraging a competitive environment," said Liz Reynolds, Southeast region manager of the National Association of Mutual Insurance Companies. "It could have a dangerous and chilling effect on the private [insurance] market."The bill would:Hold insurers accountable to state antitrust laws and increase maximum penalties for violating state laws, from $2,500 to $25,000 for breaking a law unknowingly and from $20,000 to $100,000 if it's deemed intentional.Require insurers to get state approval before raising property insurance rates and prohibit them from using arbitration panels when there's a disagreement with state insurance officials.Force insurers to pay undisputed claims by homeowners within 90 days. Some insurance companies have a strategy of boosting profits by paying less in claims, Atwater said. And companies sometimes push customers to quickly accept a smaller payment or face years of litigation while claims go unpaid.Make insurers notify policyholders 180 days before dropping their policies. If insurers plan to drop more than 10,000 policies in one year, they must come up with a plan to shed them over time.Extend the freeze on Citizens Property Insurance Corp.'s rates for six months, from January to July 2009. Rates then would increase in phases over three years.The bill will be sent to the House, which doesn't have its own version because there has been lackluster support for it. Atwater and bill co-sponsor Sen. Steve Geller, D- Hallandale Beach, said they plan to meet with several key House members this week to try to sway them."It will not pass in the House in its current form," Geller said. "I don't know what will survive, but there's going to be a lot of negotiation."Sen. Jeremy Ring, D-Margate, is among the senators who opposed the bill. He said Citizens' rate freeze would pose a risk if a hurricane wipes out state insurance funds."We froze Citizens' rates last year, betting that a hurricane won't hit, and it was a good bet. Now we want to take the same bet for three years straight? I'm not willing to take that bet," Ring said.Another controversial part of the bill is a provision to continue to allow Citizens to insure homes in high-risk areas worth more than $1 million. Sen. Al Lawson, D-Tallahassee, has said the provision is " Robin Hood in reverse.""We should not be subsidizing million-dollar homes," he said.It's not a subsidy because the pricier homes are generally more hurricane-safe and their owners pay more in premiums, Atwater said. Citizens officials said the loss from Hurricane Wilma at homes worth more than $1 million was $4.17 per $1,000 of coverage purchased, compared with $107.69 at homes valued at less than $1 million.An idea that has been popular in years past was withdrawn after a dearth of support this year. Sen. Mike Fasano, R-New Port Richey, proposed an amendment that would have required insurers that offer homeowner's insurance in other states to offer it in Florida if they wanted to sell auto insurance.Insurance Commissioner Kevin McCarty urged the House to follow the Senate's lead. "I hope the House now will also see the importance of this legislation for Florida consumers and how it will enable my office to continue to ensure that companies are keeping insurance available and affordable," McCarty said.Julie Patel can be reachedat jvpatel@sun-sentinel.comor 954-356-4667.
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Thursday, May 15, 2008
Freddie Mac Eases Declining Markets Policy
Freddie Mac Eases Declining Markets Policy On May 2, 2008, Freddie Mac announced changes that ease the impact of its declining markets policy. As a general rule, under this policy, if a property is located in a declining market, the maximum loan-to-value ratio (LTV) is reduced by 5 percentage points. Under the revised policy, for mortgages with maximum LTVs equal to or more than 95%, lenders are not required to reduce the maximum LTV ratio below 95% if the following requirements are met:
The mortgage is used to purchase the home or for a "no cash out" refi.
The mortgage is secured by a one unit residence (not a 2-4 unit residence or a manufactured home).
The mortgage application receives an "Accept Risk Class" from Freddie's automated underwriting software, Loan Prospector. Freddie is also allowing additional costs to be included in refinancings of Freddie-owned or -securitized mortgages that have already been exempt from the declining markets policy. The announcement also reminds affected parties that the following types of mortgages are exempt from the declining markets policy: FHA/VA, section 184 Native American, and section 502 rural housing mortgages.Fredde Mac BulletinJeff Lischer 202-383-1117, Marcia Salkin 202-383-1092
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The mortgage is used to purchase the home or for a "no cash out" refi.
The mortgage is secured by a one unit residence (not a 2-4 unit residence or a manufactured home).
The mortgage application receives an "Accept Risk Class" from Freddie's automated underwriting software, Loan Prospector. Freddie is also allowing additional costs to be included in refinancings of Freddie-owned or -securitized mortgages that have already been exempt from the declining markets policy. The announcement also reminds affected parties that the following types of mortgages are exempt from the declining markets policy: FHA/VA, section 184 Native American, and section 502 rural housing mortgages.Fredde Mac BulletinJeff Lischer 202-383-1117, Marcia Salkin 202-383-1092
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Tuesday, January 29, 2008
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FAR promotes why it’s a ‘Great Time to Buy Florida’ORLANDO, Fla. – Jan. 28, 2008 – To help spread the word that now is the time to buy Florida real estate, the Florida Association of Realtors (FAR) last week released a series of five articles focusing on the advantages the state’s residential real estate market currently offers to buyers. The releases were distributed to media outlets throughout the Sunshine State, along with national and international media as well.What are some of the reasons why now is the time to buy? Florida Realtors know that large inventories offer buyers options; realistic pricing translates into bargains for buyers; low mortgage rates reduce loan payments; homeownership builds wealth and trumps renting in the current market; and the Sunshine State offers an appealing lifestyle plus great value.Housing industry economists note that lower sales prices, seller incentives and affordable mortgage rates make early 2008 a buyer’s market. Research, including studies from the U.S. Department of Housing and Urban Development (HUD) shows that homeownership is an excellent financial investment for most renters. In addition, an owned house is the single largest investment that many families ever make. As such, it is an asset that can help provide financial security. Studies show that:• Home equity still accounts for the largest single source of household wealth, both for the individual homeowner and for homeowners as a group, despite the increase in the percent of households holding stock in recent years.• Housing has historically provided both a reliable and a profitable return to homeowners.• Most homebuyers use a mortgage combined with a downpayment of 20 percent or less to finance their purchase: It is this leveraging of borrowed funds that gives housing a return far in excess of the stock market’s appreciation.• The financial return on housing also includes unique tax benefits, which apply only to housing.In the latest housing outlook from NAR, analysts predict that the housing downturn may have hit bottom and is starting to turn around. Existing-home sales should hold fairly steady over the next few months, then rise later in the year and continue to improve in 2009, according to NAR.“A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008,” says NAR Chief Economist Lawrence Yun. To put last year’s housing market in perspective, Yun points out that 2007 was the fifth highest year on record for existing-home sales. So, what can you do, to help tell Florida’s story and continue to give people the facts about why it’s a great time to buy Florida? Check out FAR’s new “Great Time To Buy” Florida Web site at: http://buynow.floridarealtors.org. You can mine the site for content for marketing campaigns, media releases, blogs, speeches and e-mail correspondence. The site is a reservoir for Florida Realtors that can be tapped daily for success strategies and the latest good news about our state’s real estate market.The media releases can also be found on FAR’s media Web site, http://media.floridarealtors.org. © 2008 FLORIDA ASSOCIATION OF REALTORS
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Wednesday, January 23, 2008
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As baby boomers retire, home market dynamics will change
NEW YORK – Jan. 22, 2008 – The next housing downturn is already on the horizon – and it looks like it’s going to be a long one.
In the next two decades, as millions of aging baby boomers put their homes on the market, they’ll put downward pressure on prices, and their exodus will reshape neighborhoods and cities coast to coast, according to research released recently.
In some states, the trend has already begun, making it harder for areas to recover from the real estate recession, which isn’t expected to bottom out until the second half of this year at the earliest.
There are already more sellers than buyers in six states: Connecticut, New York (excluding Manhattan), North Dakota, Pennsylvania, West Virginia and Hawaii. The trend first hits areas with cold weather and traffic congestion, which tend to drive retirees away.
Boomers were “an incoming tide for four decades. Now the tide’s turned, and it’s going to make it much harder for housing markets to rise,” said Dowell Myers, professor of policy, planning and development at the University of Southern California and co-author of the study. The trend has long been anticipated, but Myers is the first to analyze buying and selling, state by state.
Nationwide, the ratio of seniors to working-age residents will increase by 67 percent in the next 20 years. As boomers age, more will move into assisted-living centers, apartments or relatives’ houses. Those with two homes may sell one and retire to their vacation house. And when they pass on, many of their heirs will sell the properties.
Last hit should be warm-weather states, such as Florida, Arizona and Nevada, where retirees usually sell late in life. That’s good news for homeowners in those states, where prices and sales are reeling from the collapse of the real estate bubble.
Myers’ research, which included population and immigration projections from the U.S. Census, shows that the baby boom housing bubble will hit the Northeast and Midwest hard.
“It’s most pertinent to declining parts of the country,” said William Frey, a demographer at the Brookings Institution who agrees with Myers’ conclusions. “The glut of homes on the market from baby boomers will depress the housing market and have an impact on some suburban neighborhoods that will come to look like older city neighborhoods that have undergone blight and disrepair.”
The math is simple: 79 million boomers have driven up housing demand. That trend will reverse itself when boomers are age 65 to 75; there will be three sellers for each buyer, Myers says.
He and Frey say governments need to help create jobs so young adults and immigrants can buy homes.
Copyright 2007 USA TODAY, a division of Gannett Co. Inc., Noelle
Knox.
Looking to buy or sell now?
Check out bocarealestators.com
NEW YORK – Jan. 22, 2008 – The next housing downturn is already on the horizon – and it looks like it’s going to be a long one.
In the next two decades, as millions of aging baby boomers put their homes on the market, they’ll put downward pressure on prices, and their exodus will reshape neighborhoods and cities coast to coast, according to research released recently.
In some states, the trend has already begun, making it harder for areas to recover from the real estate recession, which isn’t expected to bottom out until the second half of this year at the earliest.
There are already more sellers than buyers in six states: Connecticut, New York (excluding Manhattan), North Dakota, Pennsylvania, West Virginia and Hawaii. The trend first hits areas with cold weather and traffic congestion, which tend to drive retirees away.
Boomers were “an incoming tide for four decades. Now the tide’s turned, and it’s going to make it much harder for housing markets to rise,” said Dowell Myers, professor of policy, planning and development at the University of Southern California and co-author of the study. The trend has long been anticipated, but Myers is the first to analyze buying and selling, state by state.
Nationwide, the ratio of seniors to working-age residents will increase by 67 percent in the next 20 years. As boomers age, more will move into assisted-living centers, apartments or relatives’ houses. Those with two homes may sell one and retire to their vacation house. And when they pass on, many of their heirs will sell the properties.
Last hit should be warm-weather states, such as Florida, Arizona and Nevada, where retirees usually sell late in life. That’s good news for homeowners in those states, where prices and sales are reeling from the collapse of the real estate bubble.
Myers’ research, which included population and immigration projections from the U.S. Census, shows that the baby boom housing bubble will hit the Northeast and Midwest hard.
“It’s most pertinent to declining parts of the country,” said William Frey, a demographer at the Brookings Institution who agrees with Myers’ conclusions. “The glut of homes on the market from baby boomers will depress the housing market and have an impact on some suburban neighborhoods that will come to look like older city neighborhoods that have undergone blight and disrepair.”
The math is simple: 79 million boomers have driven up housing demand. That trend will reverse itself when boomers are age 65 to 75; there will be three sellers for each buyer, Myers says.
He and Frey say governments need to help create jobs so young adults and immigrants can buy homes.
Copyright 2007 USA TODAY, a division of Gannett Co. Inc., Noelle
Knox.
Looking to buy or sell now?
Check out bocarealestators.com
Saturday, October 27, 2007
Thursday, September 6, 2007
Wednesday, August 29, 2007
More Real Estate News
Housing slump may force Florida to make $2 billion in budget cutsTALLAHASSEE, Fla. – Aug. 28, 2007 – Facing the worst budget crunch since the 2001 terrorist attacks devastated Florida’s tourist economy, state legislators on Monday were told they might need to slash state spending by more than $2 billion over the next two years.Florida’s bleak housing market is the culprit, forcing a dramatic drop in state revenues collected through sales taxes and real estate transactions.This week legislators have begun the task of looking to slash $1.1 billion out of the $71 billion state budget that took effect on July 1. Those cuts will be finalized during a three-week special session set to begin on Sept. 18.It’s anticipated the Legislature will have to trim up to another $900 million next spring when it must put together the next state budget.Among the possible cuts in coming months are state spending on nursing home and hospital care for the poor. Also, university students could face higher tuition as soon as January and people who use state programs, such as parks, could be facing higher fees to make up some of the money.Senate committees will look to cut 4 percent in the major areas of state spending, such as education, social services and education, mostly through across-the-board cuts.“These cuts will be very tough, but our goal is to affect the least amount of people,” said Senate Ways and Means Chairwoman Lisa Carlton, R-Osprey.House leaders plan to target specific programs and are hoping to spare public schools from the brunt of the cutbacks, which could reach $700 million.“It’s all tough ... but we’ll make education a priority,” said House Budget Chief Ray Sansom, R-Destin. “There will be some reductions [in schools], but they will be reasonable, not drastic changes.”State spending has been buoyed in recent years by the state’s housing boom and hard-hitting back-to-back hurricane seasons in 2004 and 2005. The storms caused billions of dollars in damage, but also fueled a rebuilding effort that boosted sales tax collections by billions of extra dollars.“It’s either boom or bust,” said Sen. Gwen Margolis, D-Sunny Isles Beach.For the past few years it was hurricanes that “made the budget work,” Amy Baker, the state’s chief economist, told legislators on Monday. “But you can’t rely on that ... to bail you out again.”She said estimates that the state will be short $2 billion in recurring revenues from tax sources are “conservative.”And in the midst of this financial crisis, the state over the next three years is facing some big increases in ongoing programs, including another $2.4 billion for increased student enrollment and smaller class sizes in public schools, an increase of $1.6 billion for Medicaid expenses, $1 billion more for state employee benefits and salaries, and $800 million to build more prison beds and operate the corrections system.But Sansom voiced confidence the economic outlook will improve.“While it looks gloom and doom right now, I’m not sure it’s going to stay that way ... I think the real estate market is on the brink of breaking wide open if insurance and taxes become more affordable,” he said.Copyright © 2007 South Florida Sun-Sentinel, Linda Kleindienst. Distributed by McClatchy-Tribune Information Services.
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