Lisa Barton

As we head in to the new year, especially with record setting low temperatures all over Florida, it is hard to image that hurricane season will be on us again before we know it. But we live in a state where catastrophic losses can and do occur so insurance will continue to be a major issue for Florida Homeowners. Here are some of the issues facing us as we move into 2010:

1. Citizens Property Insurance: This year, the first rate increase at state-subsidized Citizens takes effect since a freeze three years ago. The state is trying to end artificially low rates and bring actuarial soundness to Florida’s largest home insurer. Citizens still has 1 million customers, approximately 413,000 of whom have homes in the high risk areas on the coasts. After nearly four years without a significant storm, Citizens’ surplus is only $3.9 billion. It will take a long time for rates to get where they need to be but at least the process has been started.

2. State Farm: Florida’s largest private insurer will be staying although they will be cancelling 125,000 policyholders and increasing premiums for many of their remaining customers. This is good news for Florida. 

3. New Insurers:  New, smaller insurers have captured an increasing share of the Florida market but many customers are worried about the quality of the companies. Their worries are justified.  First Commercial, Coral, American Keystone, Edison, and most recently Magnolia have all failed in the past two years, years in which there were no major storms. 

4. Asssessment: Policy owners in Florida will continue to pay a 1% catastrophe fund tax on their premiums for the next 5 years, a hangover from the 2005 season.  Citizens is charging all Florida homeowners, not just its customers, a 1.4% assessment for seven more years.

5. CAT fund: Had a hurricane hit Florida last fall when the credit markets were in turmoil, the catastrophe fund, which provides insurance to insurers, had no hope of selling enough bonds to cover its commitments to insurers. The projected shortfall was $18.5 billion if there was a major storm. The Legislature ordered the fund to charge more to build up cash fast. The charge will add $750 million to the fund over the next five years. 

Continue Reading “Home Insurance for Hurricane Season - Things to Consider”

Big changes in the Federal Housing Administration (FHA) requirements for lending were announced yesterday by Federal Housing Administration Commissioner David Stevens. Stevens outlined the new set of policy changes created to strengthen FHA’s capital reserves.

The FHA proposed the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and downpayments for new borrowers; reduce seller concessions to three percent from six percent; and implement a series of measures to increase lender enforcement. U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan previewed the changes in December of last year, noting that the FHA would announce additional details before the end of January.

Continue Reading “FHA Loan Requirement Changes You Need to Know About”

Okay, so you have just signed the contract to purchase your new home. What next? One of the things you will need to do prior to closing is arrange for homeowner’s/hazard insurance. Fortunately for north Floridians there are many companies writing coverage in this area. We have not had a hurricane since Dora in 1964. 

The homeowner’s policy covers three basic areas:

1. Structure of the home and detached buildings on the property. 
2. Your home and buildings on your property are insured if they are damaged or destroyed by a covered peril.  Most companies require that you insure your home for at least 80% of the current replacement cost. Remember, this dollar amount represents the cost to replace your home and has little to do with “market value”. The most common insurance policy is the HO-3, a comprehensive policy that covers all perils except those that are excluded.  Homeowner’s insurance will also cover additional living expenses. This will pay your expenses if you must live elsewhere until your property is repaired or rebuilt due to a covered loss.

Continue Reading “The Basics of Home Insurance”

Foreclosures Weigh on Home Appraisals
Approximately 25 percent of real estate practitioners say low appraisals have broken up deals, according to the NATIONAL ASSOCIATION OF REALTORS®.

While foreclosed properties typically are not included in a comparable sales analysis, they account for about 40 percent of home sales—more than 50 percent in some markets—making it difficult for appraisers to value properties not in the foreclosure process.

Additionally, new industry rules that require mortgage lenders to order appraisals through in-house staff or appraisal management companies means more appraisers without knowledge of the local market are making valuations.

While Zillow.com says non-foreclosures are selling for upwards of 30 percent more than foreclosures, a study of 20 years of home sales in Massachusetts by Harvard University’s Joint Center for Housing Studies indicates that dwellings closer than 100 yards to a foreclosure lose about 1 percent in value.

Source: USA Today (01/04/10)

Continue Reading “Appraisals Negatively Effected by Low Sale Prices on Foreclosed Properties”

Fannie Mae (FNM/NYSE) announced today that it is undertaking a comprehensive review of hundreds of condominium projects in the state of Florida in an effort to allow additional projects to become Fannie Mae-eligible through a new “Special Approval” designation. First time home buyers who want to purchase a condo as their first home have historically been limited to only a few condo communities. That may change soon. The Federal Housing Authority has just issued a press release indicates that the Fannie Mae will be relaxing some of its requirements for condominium developments. This should make it easier for buyers to get into a new home while only having to put down a small downpayment and also help move some of the existing condo inventory. Good News for Buyers!!!

Continue Reading “More Condos Opening up to First Time Home Buyers”

Oceanwalk is a terrific neighborhood in Jacksonville’s Atlantic Beach. This weekend (1/9) several local real estate agents will be holding their listings open on Saturday from 1:00-4:00. We’ll have hot chocolate, cookies, and the opportunity to see five different homes that are for sale. Please stop by my listing at 2338 Fiddlers Lane for a map to all the other homes that will be available for viewing. 

Continue Reading “Open House in Oceanwalk this Weekend (January 9th, 2010)”

Breaking News!!! Congress overwhelmingly passed a bipartisan measure this week extending the $8,000 home buyer tax credit to April 30, 2010. The legislation, which is part of a larger bill that also extends unemployment benefits, was signed into law by President Obama today. More people are now eligible to take advantage of the law, which includes a $6,500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years. Income limits for eligible home buyers were also expanded to $125,000 for single buyers and $225,000 for couples, up from $75,000 for individuals and $150,000 for couples. Qualifying home prices are capped at $800,000.

For a great explanation of the tax credit click here.

Continue Reading “First Time Homebuyers Tax Credit has Been Extended & Expanded”

Buyers and sellers:  Having property challenges?

A high percentage of homes on the market right now are listed as “short sales” or “foreclosure” (bank-owned) properties----and with those can come issues----neglected homes in need of repairs such as new roofs, flooring, windows, etc. Banks selling these properties typically don’t want to invest any money into improvements, but lenders on the other side of the transaction often won’t accept the property in its current condition (a.k.a. “as is”). Even in normal resale listings, sellers are often financially distressed and can’t afford to make additional improvements to sell the home. Unless the buyer has a “cash” offer, those homes have few options to get sold. In response, Wells Fargo Home Mortgage has developed an innovative and easy to understand program to solve these issues. Named the Remodel Express, it’s a simplified version of the popular (yet complex) FHA 203k loan, and offers buyers a turn-key solution to homes in need of repair.

Continue Reading “The FHA Remodel Express Loan”

If you’re considering the purchase of a new home, you may be concerned with the issue of finance. Attaining the right mortgage is a key step in the home buying process, but it doesn’t have to be a stress-inducing one. Most lenders offer prequalification, pre-approval or both to help you know where you stand. Here’s the difference between prequalification and preapproval:

Continue Reading “Prequalify or Preapproval - What’s the Difference?”

A year after the financial collapse of 2008, the housing market is very different than it was before the foreclosure crisis. A great article in The New York Times gives new home buyers some guidance from economists and financial planners when contemplating a home purchase:
Here are the highlights:

Continue Reading “7 Tips for First-Time Home Buyers”