House Keys

Is mandatory foreclosure mediation a good idea?

Mon, 16 Nov 2009 12:44:07 -0500

Interesting editorial in Florida Trend about the use of foreclosure mediation to keep delinquent homeowners with a roof over their heads. As the piece points out, the Collins Center for Public Policy, affiliated with Florida State University, is working with three state circuit court districts that require mediation as part of the foreclosure process. Nearly 70 percent of the time, the homeowner and lender agree to a modification that helps both sides. The Florida Supreme Court is set to decide soon whether to enact mandatory mediation in foreclosure cases across Florida. What do you think?

Ask a real estate professional: Is the first-time buyer tax credit retroactive?

Fri, 13 Nov 2009 12:23:39 -0500

Louis Spagnuolo of WCS Lending in Boca Raton answers questions from readers. To ask a question that Louis may answer next week, click here. Q: I just heard that the first-time home buyer tax credit has been extended and wanted to see if the credit could be used retroactively. Albert A: Albert, the tax credit has been extended. Qualifying purchase agreements must be signed by April 30, 2010, and closings must be final by June 30. To the best of my knowledge, there has not been provisions added allowing the credit to be retroactive. But I would suggest asking a certified public accountant to address the specifics of your individual situation. Q: I bought a house in April 2006 and just bought another one in March 2009 – a few weeks shy of the three-year requirement. Would I qualify for the credit? Anonymous A: Maybe. I would suggest getting professional tax advice, and carefully review when each loan funded and officially closed. You also may qualify for an exception if you could show some type of hardship. Q: A neighbor has an interest-only mortgage that is due to reset. He paid $290,000 in 2004, and the house now is worth about $190,000. I am assuming he put down only 5 percent or 10 percent. Will the bank now reset the mortgage and interest rate for the current balance due? Steven A: Steven, when a loan resets, it resets based upon the current loan balance. The value of the property has no bearing on the mortgage or its payments. Unless your neighbor took out a balloon mortgage, most likely he should be able to have the loan roll into the adjustable period and continue making payments. Refinancing does not look to be an option since from what you described, the property is worth less than what is owed. Q: My husband is a military veteran. We are looking to purchase a new home and wanted to see what the maximum seller concession was. Pearla A: The maximum seller's concession amount allowed on an FHA loan or on a VA loan is up to 6 percent of the total purchase price. Since the VA does not require a down payment, this often allows veterans to purchase a home with little or no out-of-pocket expenses. In many cases, the 6 percent allowed is greater than the total of the closing costs.

FPL customers ask Butterworth why he's helping the utility

Fri, 13 Nov 2009 10:45:00 -0500

Former Attorney General Bob Butterworth has gotten the "Et tu, Brute?" from some Florida Power & Light customers since he agreed a few weeks ago to do consulting work for the utility. “Now you’re helping FPL get a rate increase?” he said an FPL customer on a fixed-income asked him during a recent visit to a local non-profit. Customers have posted mixed reviews on our Web site, with some saying it's a step in the right direction. In an interview Thursday with the Sun Sentinel, Butterworth said his work for FPL is focused on helping the company improve its public image -- not on its request for a $1.27 billion base rate hike. Butterworth, a longtime public servant who fought big tobacco and utility rate hikes as attorney general, said his first meeting with FPL President Armando Olivera was "disarming." The first thing Olivera said, according to Butterworth, is: "We have made some mistakes." Add Butterworth and former PSC Chairman Braulio Baez to the 18 former government officials and regulators the Sun Sentinel identified in September that were on FPL’s payroll, or whose firms were hired by FPL. (When Baez joined Akerman Senterfitt last month, he told the newspaper that he wasn't doing work for FPL at that point but the firm does.) Butterworth said he plans to complete a report for the company within a week. Among his findings so far: the company didn't lay enough groundwork for its proposal to boost base rates. Butterworth said he doesn't plan to state the obvious on some ethics issues that have surfaced. “It doesn’t look right to have a PSC lobbyist show up at a Kentucky Derby party at the home of FPL executive…or for FPL to [communicate with a commissioner] during a rate hearing. That stuff has to end," he said. “Even if you want to wish a commissioner 'Happy Birthday' -- as innocuous a it might be -- the public can’t do that.” He said the employee that attended the Derby party, who has since resigned, should have known better. “He said I went there to get intelligence. Well, he needs intelligence…enough common sense to know this is dumb," Butterworth said. He said it's up to FPL whether to make his report public when he's done. He said the company wants everyone -- including consumer advocates -- to have a level playing field at the PSC. He said he's encouraged to hear that the commission may adopt stricter guidelines. “The PSC really has to restore confidence," he said. "But don’t call it damage control. It’s an opportunity to better serve the public.”

Florida foreclosures decline but problem far from over, firm says

Thu, 12 Nov 2009 11:57:41 -0500

Overall foreclosures are down in Florida compared to a year ago, but the state still is among the national leaders in mortgage defaults, RealtyTrac said Thursday. One in every 168 housing units statewide received a foreclosure notice last month. Only Nevada and California had higher rates. Still, Florida foreclosures declined 4 percent from October 2008 -- the first year-over-year decrease in the state's overall foreclosure rate since July 2006. The Irvine, Calif.-based firm cautions against thinking the foreclosure problem is dying down. High unemployment and homeowners who are “underwater” on their mortgages will continue to bring more foreclosures during the next year.

Big companies give FPL an energy efficiency award

Wed, 11 Nov 2009 14:50:34 -0500

Florida Power & Light announced today that it scored a national energy efficiency award. The news comes the day after state regulators said the utility's proposed energy efficiency goals are too low. National chains including Walgreens, Target, Staples, McDonalds and Wal-Mart pick the winners for the annual Edison Electric Institute's National Key Accounts Customer Service Award. FPL was one of six winners in the "energy efficiency" category. American Electric Power and Entergy won two awards each.

A Citizens insurance surcharge you may not know about

Wed, 11 Nov 2009 12:05:38 -0500

About 40 percent of Citizens Property Insurance customers have been paying a 15 percent surcharge for years. That includes roughly 250,000 policyholders east of Highway 95 in South Florida. The revelation came Tuesday when Office of Insurance Regulation officials grilled Citizens about the surcharge on "high risk" coastal policies at a hearing on the insurer's proposal to increase coastal policy rates in January by a statewide average of 7.5 percent for homeowners and 9.6 percent for condominium associations. Citizens spokesman John Kuczwanski said the insurer inherited the surcharge when two state insurance pools merged to form Citizens in 2002. He said OIR instituted the fee on what are considered riskier, coastal policies. "Nothing has been issued to indicate we should rescind it, as such we included it in our rate filing," Kuczwanski said, adding that Citizens would remove it if Insurance Commissioner Kevin McCarty requires that. If McCarty removes the surcharge, Citizens' increase for coastal homeowners may be closer to about 4.4 percent statewide. Last month, regulators approved a statewide average insurance of 5.4 percent for Citizens' non-coastal homeowner policies, which include hurricane coverage. That increase, effective Jan. 1, will work out to nearly 12 percent in Broward and Palm Beach counties, according to regulators. The Legislature passed a law this year allowing Citizens to increase premiums by no more than 10 percent a year. Some premiums are higher because the law allows companies to pass on certain backup coverage costs to policyholders.

December deadline looms for homeowners with Chinese drywall

Wed, 11 Nov 2009 11:03:45 -0500

Homeowners with tainted Chinese drywall should find out ASAP whether their wallboards were made by Knauf Plasterboard Tianjin Co. The Chinese manufacturer has agreed to accept a class-action complaint for one month. Without this pact, homeowners who want to sue Knauf will have to spend tons of time and money to serve the company, says Boca Raton attorney Allison Grant. To participate in the class-action suit, homeowners must submit proof that they have Knauf drywall by Dec. 2. “This is a good opportunity,” Grant said. “It means that Knauf is looking at their total exposure. One could interpret that to mean a settlement is quite possible.” For more information on this, click here.

Regulators order PSC staff to beef up proposed energy conservation goals

Tue, 10 Nov 2009 14:08:42 -0500

The Public Service Commission voted unanimously today to postpone setting Florida utilities' energy conservation goals and send the agency's staff back to the drawing board to develop more aggressive targets. The staff's targets "seem to align with everything the utilities wanted," said Commissioner Nathan Skop, who proposed the move. Commissioner Nancy Argenziano said the state is moving "horribly slow" in promoting conservation despite a state law last year directing the commission to develop goals that lower energy use. The commissioners urged agency staff to explore the idea of providing rebates to customers for energy-saving products such as compact flourescent light bulbs and special air conditioning units. They said customers can’t afford some of the measures that could save them the most energy, especially during the recession. Senior citizens are choosing between paying for crucial items like medicine or more energy efficient appliances, said Chairman Matthew Carter. Commissioner David Klement -- who joined the commission last month -- said he'd like to see a detailed analysis of the impact on customers’ bills of different types of efficiency rebates and incentives. "If we're going to lead, we’re doing to have to do something to provide some additional money" to push consumers to conserve, he said.

Asking prices rising in South Florida

Tue, 10 Nov 2009 12:07:41 -0500

Listing prices are inching upward in South Florida, according to a monthly report from the California real estate firms Altos Research and Real IQ. My question to you: Are prices rising because buyers are willing to pay more or because of sellers’ wishful thinking? The September median asking price in Pam Beach, Broward and Miami-Dade counties was $485,472, up 0.3 percent from September. The only other markets in the country with an increase: The Bay Area towns of San Jose and San Francisco. Meanwhile, the number of single-family homes for sale in South Florida was 29,292, down 4 percent from September. But Palm Beach, Broward and Miami-Dade continue to lead the nation in the time it takes to sell a home. The average days on market in October was 244, down about 3 percent from September. But we’re well ahead of Chicago’s 180 days. Read the full report here.

Owing more than the house is worth

Mon, 09 Nov 2009 10:59:36 -0500

The number of “underwater” mortgages in South Florida declined in the third quarter, but only slightly. Real estate firm Zillow.com reports Monday that 46.2 percent of all single-family mortgage holders in Palm Beach, Broward and Miami-Dade counties (387,157 homeowners) owe more than their properties are worth. That’s down from 47 percent (393,473 homeowners) of homes with negative equity in the second quarter. Nice to see the number go down, but this remains a huge problem for the housing market as a whole. Many borrowers who owe more than the houses are worth put little or no money down and paid near-record prices in 2004, 2005 and 2006. Other third-quarter nuggets from the three counties, courtesy of Zillow: -- Home values fell roughly 17 percent year-over-year to a Zillow Home Value Index of $168,400. September marks the eighth consecutive month of decreasing year-over-year declines. The index measures the value of all homes, not just those that sold in a particular period. -- Half of all homes sold in September (50.4 percent) sold for a loss. -- 5.5 percent of homes actually saw increasing values over the past 12 months. You can view interactive charts and tables and identify trends in your neighborhoods by clicking here.

CFO Sink meets with employees of folded South Florida insurer

Fri, 06 Nov 2009 10:55:06 -0500

When Hialeah-based First Commercial Insurance Co. folded in August, a prominent Miami family came to the rescue. Pablo Cejas -- son of former Miami-Dade county school board member Paul Cejas, a major Democratic Party donor -- formed an insurance company called Ascendant Commercial Insurance. He hired the employees and took over the policies, providing workers compensation and commercial automobile fleet insurance. Florida CFO Alex Sink, a gubernatorial candidate, helped speed up the process of helping the insurer get licensed. Yesterday, she met with the 85 employees whose jobs were saved in Hialeah -- where the unemployment rate has hit 15 percent.

Ask a real estate professional: What's the best way to unload a timeshare?

Fri, 06 Nov 2009 10:22:52 -0500

Louis Spagnuolo of WCS Lending in Boca Raton answers questions from readers. Today's topics include: timeshares and the tax credit. To ask a question that Louis may answer next week, click here. Q: Louis, great answers. I have a timeshare in Orlando and owe about $2,440 and pay a bi-yearly maintenance fee of $660. My question is how can I get rid of it? I have read many articles on selling it, either by a company or eBay, Craigslist, etc. It’s not that easy. If I let it fall into foreclosure, would I take a big hit on my credit score? I have pulled out my credit report and don't see the finance company that's holding the loan anywhere on it. Can you give me any ideas of the best way to get rid of it? Ivan A: Ivan, thank you for the compliment! One resource you may want to consider is www.sellmytimesharenow.com. I personally have never worked with the site but have heard good things about it. Also, I would suggest continuing your efforts with Craigslist and other online media outlets. Typically, many timeshare lenders do not subscribe to the bureaus and thus do not report payment histories. Q: There has been a lot of conflicting news in the media, and I want to know whether or not the first-time home buyer tax credit has been extended. Sean A: The credit has been both extended and modified and is now just waiting on President Obama’s signature. The new tax credit will be 10 percent of the purchase price of a primary residence, up to a maximum of $8,000 for first-time homebuyers and $6,500 for repeat buyers. First-time homebuyers are defined as people who have not owned a home in the previous three years. Repeat buyers must have owned their current home at least five years. The credit cannot be used for houses costing more than $800,000. The deadline for qualifying purchase agreements must be signed by April 30, 2010, and closings must be final by June 30. Military deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009 to May 1, 2010. Income limits for individuals with annual incomes up to $125,000 and joint filers with incomes up to $225,000 qualify for the full credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits. Q: We bought a townhome in homestead in 2004 for $205,000, and this year the value is $90,000. We owe the bank $156,000. We are not in foreclosure or anything like that. A friend informed me that we can refinance through Obama’s program. She said if we refinance the difference between what we owe the bank and the value will be written off. I still have yet to find something like that online. Is it true? Kim A: Kim, unfortunately there is a lot of misinformation being circulated. Right now the only government program that helps homeowners who are “underwater” on their mortgages is the 125 percent Refi Plus program. To the best of my knowledge, there is no program currently on the market where you can refinance, and the bank will write off the difference. My suggestion would be for you to continue to monitor the news as time goes on and be on the lookout for new government stimulus programs. Q: Both my wife and I are foreign nationals and are looking to purchase a second home on Miami Beach. We were told that financing for foreign nationals no longer exists. Is this true? Does this mean we have to pay all cash? Nogiero A: Over the past year, the credit markets have tightened substantially, but niche financing for foreign nationals is still available. To the best of my knowledge, most of the major banks are not lending to foreign nationals, but local community banks that understand the area and feel comfortable lending on specific properties are still willing to lend. The criteria has become more onerous and document-intensive, but there are lenders still willing to lend at least 50 percent loan-to-value for designated properties.

South Florida ranks lowest in survey on auto insurance knowledge

Tue, 03 Nov 2009 12:20:07 -0500

An Allstate Insurance Co. poll quizzing about 600 insured drivers in 13 Florida cities on what their policies cover showed the areas that are the least knowledgeable are Miami, Fort Lauderdale and West Palm Beach. Allstate released some results of the survey -- conducted by Squier Knapp Dunn and Beck Research in August -- today. The poll showed those who are most knowledgeable live in Orlando, Daytona, Ft. Myers and Naples. People living in Tampa, St. Petersburg, Jacksonville, Gainesville, Pensacola, and Tallahassee fall in the middle. Test your awareness by taking this short quiz.

Auto Insurance Quiz

Foreclosure workshops scheduled

Tue, 03 Nov 2009 11:54:14 -0500

If you’re facing foreclosure and need help, you may want to attend one of a series of workshops in the days and weeks ahead. The Realtors Association of the Palm Beaches and the city of West Palm Beach will hold a Foreclosure 911 symposium on Wednesday, Nov. 4, at 6 p.m. at West Palm Beach City Hall, 401 N. Clematis St. A panel of experts will be available to assist residents at no cost. The city of Greenacres is holding similar events Nov. 17 and Dec. 15, both at 6 p.m. at the Greenacres Community Center, 501 Swain Blvd. For more information on the events, calls the Realtors’ group at (561) 585-4544, ext. 125.

'Three steps forward, two steps back' housing recovery on schedule

Mon, 02 Nov 2009 11:23:12 -0500

Pending home sales jumped more than 6 percent in September, the National Association of Realtors said Monday. It was the eighth consecutive monthly rise -- the longest streak since the Realtors' group started counting in 2001. With home prices more affordable, NAR estimates 3 million renters now are in position to buy a median-priced home. From Mike Larson, housing analyst with Weiss Research in Jupiter: “Clearly, buyers were eager to get business done before the ($8,000 tax) credit's November expiration. So I wouldn't be surprised to see some giveback in pending sales over the next month or two. But with Congress set to extend the credit through mid-2010, and expand it to a broader pool of potential buyers, the market should remain fairly well-supported. In other words, the 'three steps forward, two steps back' recovery in housing remains on track.”