Monday, January 31, 2011
State Farm wants to raise average rates by 28%
TALLAHASSEE, Fla. – Jan. 31, 2011 – State Farm Florida Insurance, the state’s largest private property insurer, wants to raise rates by a statewide average of 28 percent.
Although Florida has dodged a direct hit by hurricanes the past five years, the company says the increase is needed to cover rising losses for claims unrelated to storms such as sinkholes. The increase comes after the company received approval in 2009 to raise average statewide rates by 28 percent and approval in November to raise them by 6.6 percent.
State Farm had 678,849 residential property insurance policies in the state as of late last year, including 128,506 in Broward, Palm Beach and Miami-Dade counties and 175,084 in the Orlando area.
The Office of Insurance Regulation will review the request at a hearing on Feb. 15. An actuary from the office wrote in an e-mail late Friday that it appears the proposal is driven by higher claims costs and a higher “profit and contingency” factor, which is, in part, for emergencies or unforeseen events. Just because the request was filed “does not necessarily mean the Office will approve it,” he wrote.
If approved, some policyholders would see increases that are higher than the state average, and others would see lower increases or even decreases.
In early 2009, State Farm threatened to leave Florida’s property insurance market after the state rejected its request for rate increases of either 47 percent or 67 percent. That year, legislators passed a measure to effectively allow the largest home insurers to charge as much as they wanted, but Gov. Charlie Crist vetoed the legislation.
In July 2009, regulators agreed to allow State Farm to eliminate some discounts it had been providing, which resulted in higher rates on average statewide. The company agreed to stay in the state in December 2009 if it was allowed to shed 125,000 policies over several years and raise rates by an average 14.8 percent.
Last year, regulators allowed the company to reduce some discounts it gives homeowners for fortifying their homes against hurricanes, effectively raising statewide average rates by 6.6 percent, said State Farm spokesman Michael Grimes.
Grimes said State Farm, which had reported its premiums weren’t keeping pace with claims and other expenses, helped improve its finances by dropping some policies. It now has about 130,000 fewer residential property insurance policies than it did in late 2009 when it agreed to stay in Florida.
The rate increase also would help, Grimes said. “To ensure State Farm Florida has the resources to sufficiently protect its customers’ property, the premiums need to adequately reflect the risk inherent in providing property insurance coverage in Florida,” he said. “Non-catastrophe loss per policy is up 94 percent the past three years. Much of the insurance losses can be attributed to sinkhole claims.”
The company spent $351 million to cover sinkhole claims from 2007 to October 2010, according to Grimes.
Information about the rate hearing is available at the Office of Insurance Regulation’s website.
Copyright © 2011 Sun Sentinel, Fort Lauderdale, Fla., Julie Patel. Distributed by McClatchy-Tribune Information Services.
Thursday, January 27, 2011
Brand New Listing in Palm Bay!
www.brevardmls.com
List Price: $60,900 - Firm: Keller Williams Rlty of Brvd - List Agent: Kenneth Gordon - Email: KenGordon.re@gmail.com - Perfect for the first time home buyer, young family, or recently retired. Close to schools, churches, shopping, and easy access to I-95. Quiet neighborhood, huge fenced yard, and an enclosed Florida room.
Friday, January 21, 2011
Florida’s existing home, condo sales up in Dec. and for 2010
ORLANDO, Fla. – Jan. 20, 2011 – Sales of existing homes and condominiums in Florida rose in December, a positive trend also reported at the close of 2010 as statewide sales activity posted gains over the previous year, according to the latest housing data released by Florida Realtors®.
A total of 15,550 existing single-family homes sold statewide in December, up 4 percent from the 14,923 homes sold in December 2009. The statewide existing home median sales price last month was $133,100; in December ’09 it was $139,800 for a 5 percent decrease, according to Florida Realtors’ data. However, December’s statewide existing home median price was higher than the $132,700 reported in November 2010. The national median existing single-family home price was $171,300 in November, according to the latest data available from the National Association of Realtors® (NAR). The median is the midpoint; half the homes sold for more, half for less.
In December, 12 of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales and 14 MSAs reported higher existing condos sales. In the year-to-year comparison for statewide existing condo sales, a total of 6,673 units changed hands last month, up 12 percent from the 5,955 condos sold in December 2009. The statewide existing condo median sales price in December was $88,100; in December ’09 it was $106,700 for a 17 percent decrease. The national median existing condo price was $165,300 in November, according to NAR.
Looking back on 2010, Florida’s existing home sales rose 5 percent for the year, with a total of 170,848 homes sold compared to 162,873 homes sold in 2009. Statewide existing home sales activity in 2010 also was 37.5 percent higher than 2008 statewide sales, records show. The statewide existing home median price for 2010 was $136,500; it was $142,500 in 2009 for a 4 percent decrease.
“It’s encouraging to close out the year for Florida’s housing market with increased sales activity,” said 2011 Florida Realtors President Patricia “Pat” S. Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound. “The homebuyer tax credits helped to fuel home and condo sales during the first half of 2010, while favorable affordability conditions and historically low mortgage rates continued to bring buyers into the market in the waning months of the year.
“Looking to the future, 2011 is going to be a year of opportunity for buyers and sellers,” Fitzgerald added. “Industry analysts report seeing steady economic improvements, including more jobs and stronger consumer confidence, which will have a positive, stabilizing impact on the housing market.”
In Florida’s condo market, a total of 72,050 units sold statewide in 2010, a gain of 29 percent compared to 55,900 units sold in 2009. Statewide existing condo sales activity in 2010 was up 90.6 percent over the 2008 sales level, records show. The statewide existing condo median price in 2010 was $91,300; it was $108,000 in 2009 for a 15 percent decrease.
The latest industry outlook from NAR offers positive predictions for 2011. “Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” said NAR Chief Economist Lawrence Yun. “All the indicator trends are pointing to a gradual housing recovery.”
In December, the interest rate for a 30-year fixed-rate mortgage averaged 4.71 percent, down from the 4.93 percent average during the same month a year earlier, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
© 2011 Florida Realtors®
A total of 15,550 existing single-family homes sold statewide in December, up 4 percent from the 14,923 homes sold in December 2009. The statewide existing home median sales price last month was $133,100; in December ’09 it was $139,800 for a 5 percent decrease, according to Florida Realtors’ data. However, December’s statewide existing home median price was higher than the $132,700 reported in November 2010. The national median existing single-family home price was $171,300 in November, according to the latest data available from the National Association of Realtors® (NAR). The median is the midpoint; half the homes sold for more, half for less.
In December, 12 of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales and 14 MSAs reported higher existing condos sales. In the year-to-year comparison for statewide existing condo sales, a total of 6,673 units changed hands last month, up 12 percent from the 5,955 condos sold in December 2009. The statewide existing condo median sales price in December was $88,100; in December ’09 it was $106,700 for a 17 percent decrease. The national median existing condo price was $165,300 in November, according to NAR.
Looking back on 2010, Florida’s existing home sales rose 5 percent for the year, with a total of 170,848 homes sold compared to 162,873 homes sold in 2009. Statewide existing home sales activity in 2010 also was 37.5 percent higher than 2008 statewide sales, records show. The statewide existing home median price for 2010 was $136,500; it was $142,500 in 2009 for a 4 percent decrease.
“It’s encouraging to close out the year for Florida’s housing market with increased sales activity,” said 2011 Florida Realtors President Patricia “Pat” S. Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound. “The homebuyer tax credits helped to fuel home and condo sales during the first half of 2010, while favorable affordability conditions and historically low mortgage rates continued to bring buyers into the market in the waning months of the year.
“Looking to the future, 2011 is going to be a year of opportunity for buyers and sellers,” Fitzgerald added. “Industry analysts report seeing steady economic improvements, including more jobs and stronger consumer confidence, which will have a positive, stabilizing impact on the housing market.”
In Florida’s condo market, a total of 72,050 units sold statewide in 2010, a gain of 29 percent compared to 55,900 units sold in 2009. Statewide existing condo sales activity in 2010 was up 90.6 percent over the 2008 sales level, records show. The statewide existing condo median price in 2010 was $91,300; it was $108,000 in 2009 for a 15 percent decrease.
The latest industry outlook from NAR offers positive predictions for 2011. “Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” said NAR Chief Economist Lawrence Yun. “All the indicator trends are pointing to a gradual housing recovery.”
In December, the interest rate for a 30-year fixed-rate mortgage averaged 4.71 percent, down from the 4.93 percent average during the same month a year earlier, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
© 2011 Florida Realtors®
Thursday, January 20, 2011
Housing Starts Expected to Climb in 2011
New home construction is looking up this year. During an economic update Wednesday at the International Builders' Show in Orlando David Crowe, chief economist of the National Association of Home Builders, projected single-family housing starts to rise by 21 percent in 2011, reaching 575,000 units.
The estimate is slightly more conservative than the Dec. 30 projection of 716,000 housing starts this year by Lawrence Yun, chief economist of the National Association of REALTORS®. Both estimates assume sustained job growth, increasing U.S. population, as well as continued low interest rates driving construction.
Yun expects about 2 million jobs to be added in 2011. However, as NAHB presenter Frank Nothaft, chief economist for Freddie Mac, pointed out, 2011 got off to a slow start with nonfarm payrolls rising only by 103,000 in December. He called the figure weaker than expected.
Credit is another factor. Lending remains tight, but if it opens up with safe underwriting standards for creditworthy buyers, Yun says there would be a bigger boost to the housing market with spillover benefits for the broader economy. The 30-year fixed-rate mortgage is forecast to rise gradually to 5.3 percent around the end of 2011; at the same time, unemployment should drop to 9.2 percent, according to NAR.
In addition, over the past 10 years the U.S. has added 27 million people. Continued population growth will also spur home construction and sales. “All the indicator trends are pointing to a gradual housing recovery,” Yun says.
An even more conservative projection of 492,000 housing starts in 2011 was released by the Portland Cement Association during the International Builders Show Wednesday. Edward Sullivan, PCA chief economist, does not expect significant increases until 2012 due to tight lending standards, a high home inventory count, and unstable housing prices. He also says that new home construction will vary considerably by region.
-- Erica Christoffer, REALTOR® Magazine
The estimate is slightly more conservative than the Dec. 30 projection of 716,000 housing starts this year by Lawrence Yun, chief economist of the National Association of REALTORS®. Both estimates assume sustained job growth, increasing U.S. population, as well as continued low interest rates driving construction.
Yun expects about 2 million jobs to be added in 2011. However, as NAHB presenter Frank Nothaft, chief economist for Freddie Mac, pointed out, 2011 got off to a slow start with nonfarm payrolls rising only by 103,000 in December. He called the figure weaker than expected.
Credit is another factor. Lending remains tight, but if it opens up with safe underwriting standards for creditworthy buyers, Yun says there would be a bigger boost to the housing market with spillover benefits for the broader economy. The 30-year fixed-rate mortgage is forecast to rise gradually to 5.3 percent around the end of 2011; at the same time, unemployment should drop to 9.2 percent, according to NAR.
In addition, over the past 10 years the U.S. has added 27 million people. Continued population growth will also spur home construction and sales. “All the indicator trends are pointing to a gradual housing recovery,” Yun says.
An even more conservative projection of 492,000 housing starts in 2011 was released by the Portland Cement Association during the International Builders Show Wednesday. Edward Sullivan, PCA chief economist, does not expect significant increases until 2012 due to tight lending standards, a high home inventory count, and unstable housing prices. He also says that new home construction will vary considerably by region.
-- Erica Christoffer, REALTOR® Magazine
Monday, January 17, 2011
Free Federal Reserve brochure explains credit decisions
WASHINGTON – Jan. 17, 2011 – Lenders usually consider a consumer’s credit history or credit score when deciding whether to extend credit and at what interest rate. A new Federal Reserve publication available online helps consumers understand the new notices they may receive from lenders when credit reports or credit scores affect a decision to grant credit.
The publication, “What You Need to Know: New Rules about Credit Decisions and Notice,” describes the types of notices consumers may receive. It includes links to sample notices, information on what consumers should do if they receive a notice, and instructions on how to dispute credit report errors.
The notices are now required by rules issued by the Federal Reserve Board and the Federal Trade Commission. The new rules took effect Jan. 1, 2011.
Under the rules, a creditor must provide a notice to the consumer when, based on the consumer’s credit report, the creditor offers loan terms that are less favorable than terms provided to other consumers. Consumers who receive this “risk-based pricing” notice have a right to get a free credit report to check the lender’s accuracy.
As an alternative to providing risk-based pricing notices, creditors can choose to give credit applicants a free credit score and information about their score.
Today, most consumers must pay a fee to obtain their credit score. While the free credit reports contain information about payment history and other details used to create a credit score, they do not include the numbers that lenders use to determine an interest rates.
To download the report that can be given to homebuyers, go to the Federal Reserve’s website.
© 2011 Florida Realtors®
The publication, “What You Need to Know: New Rules about Credit Decisions and Notice,” describes the types of notices consumers may receive. It includes links to sample notices, information on what consumers should do if they receive a notice, and instructions on how to dispute credit report errors.
The notices are now required by rules issued by the Federal Reserve Board and the Federal Trade Commission. The new rules took effect Jan. 1, 2011.
Under the rules, a creditor must provide a notice to the consumer when, based on the consumer’s credit report, the creditor offers loan terms that are less favorable than terms provided to other consumers. Consumers who receive this “risk-based pricing” notice have a right to get a free credit report to check the lender’s accuracy.
As an alternative to providing risk-based pricing notices, creditors can choose to give credit applicants a free credit score and information about their score.
Today, most consumers must pay a fee to obtain their credit score. While the free credit reports contain information about payment history and other details used to create a credit score, they do not include the numbers that lenders use to determine an interest rates.
To download the report that can be given to homebuyers, go to the Federal Reserve’s website.
© 2011 Florida Realtors®
Rate on 30-year fixed mortgage dips to 4.71%
Mortgage Rate Trend Index
Expect little change in mortgage rates over the short term, say 56% of the industry experts polled by Bankrate.com this week. The remaining 44% predict a rise – and none expect further declines.
NEW YORK (AP) – Jan. 14, 2011 – Rates on fixed mortgages dipped for the second straight week as Treasury yields fell.
Freddie Mac said Thursday the average rate on the 30-year mortgage dropped to 4.71 percent this week from 4.77 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year loan slipped to 4.08 percent from 4.13 percent. It reached 3.57 percent in November, the lowest level on records starting in 1991.
Treasury yields dropped after the December employment report came in weaker than expected. That drove investors to buy safer Treasury bonds, driving up prices and lowering the yields. Mortgage rates tend to track the yield on the 10-year Treasury note.
Rates had been rising since November. Investors shifted money out of Treasurys and into stocks on expectations of faster economic growth and higher inflation. Yields tend to rise on inflation fears.
The recent dip in rates has persuaded some borrowers to refinance, but would-be buyers remain hesitant. The number of homeowners looking to refinance rose last week, the Mortgage Bankers Association said Wednesday. But the ranks of people applying for a purchase mortgage slipped from the week before.
Mortgage rates aren’t expected to revisit last year’s historically low rates, unless the economy takes a sharp turn for the worst. And even if they do, low mortgage rates did little last year to spark flagging home sales.
Higher rates are just another obstacle facing the beleaguered housing market. High unemployment, elevated foreclosures and falling home prices are other drags on the market’s recovery.
RealtyTrac Inc. said Thursday that banks took back more than 1 million homes last year, the highest tally on records dating back to 2005. One in 45 U.S. households received a foreclosure filing in 2010, up 1.67 percent from the year before. The foreclosure listing firm expects bank repossessions to peak this year at 1.2 million.
Foreclosures typically sell at a steep discount of up to 50 percent in some of the hardest-hit regions. That lowers prices of similar homes in the area. Experts predict prices will drop nationally another 5 to 10 percent before bottoming out midyear.
To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.
The average rate on a five-year adjustable-rate mortgage slipped to 3.72 percent from 3.75 percent. The five-year hit 3.25 percent last month, the lowest rate on records dating back to January 2005.
The average rate on one-year adjustable-rate home loans fell to 3.23 percent from 3.24 percent.
The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year loan in Freddie Mac’s survey was 0.8 point. The average fee for the 15-year fixed loan and the five-year ARM was 0.7 point, and the fee for the 1-year ARM was 0.6 point.
Copyright © 2011 The Associated Press, Janna Herron, AP real estate writer.
Thursday, January 13, 2011
Foreclosure rate took a dive at end of year
WASHINGTON – Jan. 13, 2011 – The pace of foreclosures in the U.S. has dropped since revelations that thousands of foreclosure documents may have been improperly prepared.
In December, U.S. foreclosure filings were off 26 percent from December 2009, RealtyTrac reported today. In November, filings were down 14 percent year over year. The December drop was the biggest in at least five years. December’s foreclosure filings are the lowest monthly total since June 2008, RealtyTrac says.
Lenders and mortgage servicers imposed delays on foreclosure processes in October after reports in September that some servicers did not follow legal procedures in tens of thousands of foreclosures. Mortgage servicers say they’re resuming stalled foreclosures, but RealtyTrac estimates that up to 250,000 may have been delayed by the controversy. Those foreclosures will likely be restarted and added to the numbers in early 2011, says James Saccacio, RealtyTrac CEO.
The Department of Justice and the state attorneys general are investigating. “Lenders have been spanked. They’re spending money to make sure every ‘i’ is dotted and every ‘t’ is crossed,” says Christopher Thornberg, of Beacon Economics. The pace of foreclosures “will pick back up,” he says.
Whether it’ll go back to the torrid pace of the past is unclear. Some states have recently added speed bumps. New York now requires lawyers for firms bringing foreclosures to sign an affirmation that they reviewed court documents – and asked servicers to verify their accuracy. Since that requirement started in October, foreclosure filings have “dropped like a rock,” says Paul Lewis, chief of staff to New York State Deputy Chief Administrative Judge Ann Pfau. They’re running about 150 a month, down from 900, Lewis says. He speculates lawyers need time to get information from banks.
In addition to taking longer to make sure paperwork is correct, companies may be slowing foreclosures so that they don’t glut the market with homes for sale, which would depress prices, says Patrick Butler, head of asset disposition for Foreclosure.com. They may also be delaying foreclosures to avoid the cost of maintaining properties while others remain unsold, Butler says.
In December, bank repossessions nationwide totaled 69,847, down 24 percent from December 2009 but up 4 percent from November.
For the year, almost 2.9 million U.S. properties received foreclosure filings, a record high and up 2 percent from 2009. Nationwide, 1 in 45 homes received at least one foreclosure filing during the year.
Source: USA Today
In December, U.S. foreclosure filings were off 26 percent from December 2009, RealtyTrac reported today. In November, filings were down 14 percent year over year. The December drop was the biggest in at least five years. December’s foreclosure filings are the lowest monthly total since June 2008, RealtyTrac says.
Lenders and mortgage servicers imposed delays on foreclosure processes in October after reports in September that some servicers did not follow legal procedures in tens of thousands of foreclosures. Mortgage servicers say they’re resuming stalled foreclosures, but RealtyTrac estimates that up to 250,000 may have been delayed by the controversy. Those foreclosures will likely be restarted and added to the numbers in early 2011, says James Saccacio, RealtyTrac CEO.
The Department of Justice and the state attorneys general are investigating. “Lenders have been spanked. They’re spending money to make sure every ‘i’ is dotted and every ‘t’ is crossed,” says Christopher Thornberg, of Beacon Economics. The pace of foreclosures “will pick back up,” he says.
Whether it’ll go back to the torrid pace of the past is unclear. Some states have recently added speed bumps. New York now requires lawyers for firms bringing foreclosures to sign an affirmation that they reviewed court documents – and asked servicers to verify their accuracy. Since that requirement started in October, foreclosure filings have “dropped like a rock,” says Paul Lewis, chief of staff to New York State Deputy Chief Administrative Judge Ann Pfau. They’re running about 150 a month, down from 900, Lewis says. He speculates lawyers need time to get information from banks.
In addition to taking longer to make sure paperwork is correct, companies may be slowing foreclosures so that they don’t glut the market with homes for sale, which would depress prices, says Patrick Butler, head of asset disposition for Foreclosure.com. They may also be delaying foreclosures to avoid the cost of maintaining properties while others remain unsold, Butler says.
In December, bank repossessions nationwide totaled 69,847, down 24 percent from December 2009 but up 4 percent from November.
For the year, almost 2.9 million U.S. properties received foreclosure filings, a record high and up 2 percent from 2009. Nationwide, 1 in 45 homes received at least one foreclosure filing during the year.
Source: USA Today
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