Miami Views

FALLS CHURCH, Va. – Feb. 1, 2012 – President Obama released more details today about a proposed housing plan first announced during his State of the Union address. The National Association of Realtors® (NAR) quickly backed the program, but it faces an uphill battle in Congress.

“As the nation’s leading advocate for homeownership and housing issues, NAR knows that stabilizing the housing market is key to the health of our economy and communities across the country,” says NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami and 2002 president of Florida Realtors. “We are pleased that the president released a plan to help America’s struggling housing market and homeowners. Improving access to simple, low-cost refinancing and streamlining the process will help hardworking families who have stayed current on their mortgage payments and will go a long way to helping keep more families in their homes.”

Obama’s plan would help eligible, underwater homeowners who are current on their mortgage payments to refinance or modify their loan into safer, more affordable mortgages at today’s historically low interest rates. Homeowners could potentially save hundreds of dollars each month, and it could reduce foreclosure rates.

The plan also announced a Federal Housing Finance Administration (FHFA) pilot program to transition Real Estate Owned (REO) properties into rental housing. However, NAR urged FHFA to proceed cautiously with any REO-to-rental program, pointing out that the nation’s housing markets are complex and varied. According to NAR, any REO-to-rental program should involve substantial participation of local market experts, especially licensed real estate professionals.

The plan needs Congress’ approval to move forward, however. To pay the $5 to $10 billion cost, Obama recommends a new fee on large banks that failed to pass when recommended earlier. Obama, though, says he’s also willing to consider other ways to pay for the program.

“Realtors are eager to work with Congress and the administration to put the plan into action,” said Veissi. “We hope that the president and Congress will work together to pass the necessary legislation.”

© 2012 Florida Realtors®

GAINESVILLE, Fla. – Feb. 1, 2012 – Consumer confidence among Floridians surged in January, up seven points to 77 from a revised December reading of 70, marking a steady rise in optimism, according to the University of Florida’s (UF) monthly survey.

Four of the five categories measured by the survey found increased optimism. One category that asks survey takers if they’re better off financially than they were a year ago rose four points to 60, its highest level since March 2008 when the U.S. economy began to falter. Expectations that their personal finances will improve by this time next year rose eight points to 86.

In addition, confidence in the nation’s economy over the next year went up dramatically by 14 points to 74. Trust in the U.S. economy over the next five years was upbeat, too, moving 10 points to 83. These figures parallel results of a University of Michigan study that show consumer confidence across the nation shot up from 69.9 in December to 75 in January.

Only one category dropped – whether or not it’s a good time to buy big-ticket items such as an automobile or a refrigerator, which fell four points to 81.

“Consumer confidence in Florida is now back to the level it was in January 2011,” says Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “We are beginning the year with the same pattern as last year where there were relatively steady increases in confidence from the end of the summer with a surge to 77 in January 2011. This was followed by seven months of decline with the low of 61 in August 2011 when Congress debated the debt ceiling.”

The UF survey shows these increases ranged across income and age groups, except for lower income respondents whose perceptions of current personal finances declined slightly. Results also indicate little difference in confidence among political parties, which indicate that the rising consumer confidence is most likely linked to perceptions of the economy rather than concern about the upcoming November elections, McCarty says.

Employment gains, especially in trade, transportation and utilities, may help explain the boost in confidence. However, McCarty says, the drop in unemployment may also reflect a decline in the labor force, along with adjustments the Bureau of Labor Statistics used to remove seasonal fluctuations in its unemployment calculations.

Encouraging news about housing prices and stock market investments, which are the major asset sources for most households, also may be helping to buoy Floridians’ spirits. For instance, the median price of a single-family home increased in December to $134,300, a $4,000 gain from the previous month. In addition, the stock market is near a post-recession high.

“Concrete plans to modify Social Security and Medicare have been shelved, at least temporarily, which is a relief to many seniors,” McCarty adds.

Finally, although gas prices have increased nearly 20 cents a gallon over the past month, inflation overall remains low. In addition, interest rates are at near record lows and the Federal Reserve has announced plans to keep them low for the next two years.

“While many aspects of the economy are better this year, it remains to be seen whether this level of confidence will be sustained,” McCarty says. “The biggest threat to the U.S. economy, and therefore Florida, is the recession in Europe, which would affect Floridians primarily as decreased demand for Florida tourism, decreased demand for houses from foreign investors, and the stock market portfolios of workers and retirees whose investments would include companies with exposure to much of Europe. However, barring a very negative outcome to the turmoil over European debt, this pattern of confidence, if sustained, bodes well for Florida.”

The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150. The UF survey was conducted between Jan. 2 and Jan. 25, and reflects the responses of 420 individuals statewide.

© 2012 Florida Realtors®

WASHINGTON – Feb. 1, 2012 – According to the Department of Veterans Affairs, VA home loans continue to have the lowest serious delinquency and foreclosure rates in the mortgage industry. And in the past fiscal year, veterans have taken out VA home loans in record numbers, with originations at their highest level in eight years.

“The continued strong performance and high volume of VA loans are a testament to the importance of VA’s home loan program and a tribute to the skilled VA professionals who help homeowners in financial trouble keep their homes,” said Secretary of Veterans Affairs Eric K. Shinseki.

Last year, VA helped 72,391 veterans and service members avoid foreclosure, an increase from 66,030 from the prior year. At the same time, foreclosures on VA guaranteed loans dropped by 28 percent.

According to the Mortgage Bankers Association National Delinquency Survey, VA’s foreclosure rate for the last 14 quarters and serious delinquency rate for the last 11 quarters have been the lowest of all measured loan types, even prime loans.

In fiscal year 2011, VA guaranteed 357,594 loans, an increase of nearly 14 percent over the previous year. There are currently over 1.5 million active VA home loans.

VA loans make homeownership more affordable for U.S. veterans, active duty service members and eligible surviving spouses. Buyers get a no-downpayment loan, and lenders receive a guarantee from loss if a borrower fails to repay the loan.

The VA advises veterans and service members in trouble on their mortgage to first contact the lender that services the loan. Depending on the situation, however, VA’s loan specialists can intervene on a veteran’s behalf to help pursue repayment plans, forbearances and loan modifications. Veterans and service members can call VA toll-free at (877) 827-3702 to speak with a VA specialist concerning foreclosure avoidance.

Veterans may obtain a certificate of eligibility and sign up for eBenefits through the VA’s web portal at www.ebenefits.va.gov. Service members may enroll in eBenefits using their Common Access Card at any time during their military service or before they leave during their Transition Assistance Program briefings. Veterans may also enroll in eBenefits and obtain a premium account by verifying their identity in-person at the nearest regional office or online, depending on their status, or calling VA’s toll free number at (800) 827-1000.

For more information, visit the VA’s website.

© 2012 Florida Realtors®

WASHINGTON – Jan. 31, 2012 – The Conference Board Consumer Confidence Index, which had increased in December, retreated slightly in January. The Index now stands at 61.1, down from 64.8 in December. The Present Situation Index that gauges respondents’ outlook about things today declined to 38.4 from 46.5. The Expectations Index that gauges expectations about short-term conditions edged down to 76.2 from 77.0 in December.

“Consumer confidence retreated in January after large back-to-back gains in the final two months of 2011,” says Lynn Franco, director of The Conference Board Consumer Research Center. “Consumers’ assessment of current business and labor market conditions turned more downbeat and is back to November 2011 levels. Regarding the short-term outlook, consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects. Recent increases in gasoline prices may have consumers feeling a little less confident this month.”

Consumers claiming current business conditions are “good” decreased to 13.3 percent from 16.3 percent, while those stating business conditions are “bad” increased to 38.7 percent from 33.5 percent. Consumers’ assessment of the labor market was also less positive. Those saying jobs are “plentiful” decreased to 6.1 percent from 6.6 percent, while those claiming jobs are “hard to get” increased to 43.5 percent from 41.6 percent.

Consumers’ short-term outlook was slightly weaker than last month. The proportion of consumers anticipating business conditions to improve over the next six months decreased to 16.6 percent from 16.8 percent, while those expecting business conditions to worsen increased to 15.1 percent from 13.4 percent.

Consumers’ outlook for the labor market, however, was moderately more favorable. Those expecting more jobs in the months ahead increased to 16.2 percent from 14.0 percent, while those anticipating fewer jobs declined to 19.5 percent from 20.2 percent. The proportion of consumers expecting an increase in their incomes declined to 13.8 percent from 16.3 percent.

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was Jan. 19.

© 2012 Florida Realtors®

WASHINGTON – Jan. 31, 2012 – U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan announced new regulations to ensure that HUD’s core housing programs are open to all eligible persons, regardless of sexual orientation or gender identity.

“The Obama Administration has viewed the fight for equality on behalf of the LGBT community as a priority and I’m proud that HUD has been a leader in that fight,” said Donovan at the 24th National Conference on Lesbian, Gay, Bisexual and Transgender (LGBT) Equality. “With this historic rule, the administration is saying you cannot use taxpayer dollars to prevent Americans from choosing where they want live on the basis sexual orientation or gender identity – ensuring that HUD’s housing programs are open, not to some, not to most, but to all.”

The new regulations, to be published as final in the Federal Register next week, will go into effect 30 days after publication. The final rule, published as “Equal Access to Housing in HUD Programs – Regardless of Sexual Orientation or Gender Identity,” makes the following provisions:

• Requires owners and operators of HUD-assisted housing, or housing whose financing is insured by HUD, to make housing available without regard to the sexual orientation or gender identity of an applicant for a dwelling, whether renter- or owner-occupied. HUD will institute this policy in its rental assistance and homeownership programs, which include the Federal Housing Administration (FHA) mortgage insurance programs, community development programs, and public and assisted housing programs.

• Prohibits lenders from using sexual orientation or gender identity as a basis to determine a borrower’s eligibility for FHA-insured mortgage financing.

• Clarifies that all otherwise eligible families, regardless of marital status, sexual orientation or gender identity, will have the opportunity to participate in HUD programs. In the majority of HUD’s rental and homeownership programs the term “family” already has a broad scope, and includes a single person and families with or without children. HUD’s rule clarifies that otherwise eligible families may not be excluded because one or more members of the family may be an LGBT individual, have an LGBT relationship, or be perceived to be so.

• Prohibits owners and operators of HUD-assisted housing or housing insured by HUD from asking about an applicant’s sexual orientation and gender identity. In response to comments, however, HUD says this provision doesn’t prohibit voluntary and anonymous reporting of sexual orientation or gender identity pursuant to state, local or federal data requirements.

HUD published the final rule (PDF format) on its website.

© 2012 Florida Realtors®

WASHINGTON – Jan. 31, 2012 – If a home is energy efficient and conserves energy, the monthly utility bills won’t be as high. And if the bills aren’t as high, a buyer can afford to pay more each month on the mortgage.

That’s the theory behind Energy Efficient Mortgages (EEMs). EEMs allow borrowers to qualify for a larger loan and a better, more energy-efficient home.

EEMs are typically used to purchase a new home that is already energy efficient, such as an ENERGY STAR qualified home. However, the term EEM refers to all types of energy mortgages, including Energy Improvement Mortgages (EIMs), which can be used to purchase an existing home that the buyer plans to improve with energy efficient upgrades. EIMs allow borrowers to roll the cost of the upgrades into the mortgage without increasing the downpayment.

Both EEMs and EIMs typically require that a home energy rating – an estimate of monthly energy savings – be given to the lender before the loan can be approved.

Conventional Energy Efficient Mortgages

Lenders who sell loans to Fannie Mae and Freddie Mac can offer conventional EEMs. Conventional EEMs increase the borrower’s income by a dollar amount equal to the estimated energy savings. The Fannie Mae loan also adjusts the value of the home to reflect the value of the energy efficiency measures. For more information about Fannie Mae’s EEM you can call 1-800-7FANNIE (732-6643).

FHA Energy Efficient Mortgages

The mortgage loan amount for an FHA EEM can be increased by the cost of effective energy improvements. The maximum amount of the portion of the EEM for energy efficient improvements is the lesser of 5 percent of the value of the property, or 115 percent of the median area price of a single family dwelling, or 150 percent of the conforming Freddie Mac limit.

For more information on FHA EEM loans, visit HUD.gov. Additional information is available from HUD’s Office of Single Family Housing by calling (800) 569-4287.

VA Energy Efficient Mortgages

The Veteran’s Administration (VA) EEM is available to qualified military personnel, reservists and veterans, and caps energy improvements at $3,000 – $6,000. Borrowers should ask their lender about a VA EEM at the beginning of the lending process. More information about VA EEMs can be obtained from the website for the U.S. Department of Veteran’s Affairs or by calling (800) 827-1000.

© 2012 Florida Realtors®

WASHINGTON – Jan. 30, 2012 – The National Association of Realtors® conducts a monthly study on Realtors outlooks about the housing market, and the Realtors Confidence Index for single-family home sales in December increased to 31.6 from November’s 30.4. However, it increased 7.1 points in one year – since December 2010 – when it was 24.5. Overall, the Index has shown a slowly improving market outlook.

The index for townhouses was 18.5 in December down slightly down from November’s 18.7. A year earlier, however, it was 12.6. The index for condos also decreased to 14.3 from November’s 15.3, but one year earlier it was only 10.3.

The index also measured Realtors’ outlooks by region. Overall, the West had the highest outlook at 35.0, but the South – which includes Florida – came in second at 33.3. One year earlier, the South’s index stood at 25.1.

Overall, 55 percent of Realtors surveyed expect prices to rise over the next year, an increase from 50 percent only one month earlier; and 7 percent of Realtors expect prices to rise 5 percent or more compared to November’s 6 percent. On the flip side, 38 percent of Realtors expect prices to fall, but that’s less than the 43 percent who said the same thing one month earlier.

In an analysis, NAR Chief Economist Lawrence Yun said 2012 kicks off with “a significant amount of good news. … Existing home sales in December were up from a year ago. Pending sales – that is, contract signings – were 5 percent ahead of a year ago. Housing inventory – the number of homes available for sale – has declined (both for existing and newly built homes). Housing affordability continues at record high levels.”

Yun says that one major problem still hangs over the housing market, however: Many middle-class buyers have been shut out of the market because they cannot obtain a mortgage.

“Loan qualifications have become so strict since 2009 that only borrowers with super-high credit scores and spotless credit history are able to obtain mortgages,” Yun says. According to one-third of the Realtors surveyed, access to credit was the most important factor limiting clients’ ability to buy a home.

The complete Realtors Confidence Index is available online.

© 2012 Florida Realtors®

WATERSOUND, Fla. – Jan. 30, 2012 – The St. Joe Company announced Friday that its Board of Directors adopted a new real estate investment strategy. To reduce costs, it will focus on lowering risk.

Going forward, St. Joe says it will cut back on infrastructure and amenities in developing its master-planned communities. It will also reposition its communities to increase sales, which could include selling properties in bulk, selling undeveloped parcels and lowering sales prices.

The move, according to St. Joe, will reduce expenditures by about $190 million over the next 10 years.

“In 2011, the new board directed management to reduce expenses,” says Brady. “We have met that goal and, as a result, we currently expect to have positive operating cash flow in 2012, excluding discretionary capital expenditures.”

Brady says the board also wanted him to evaluate assets and development with an eye to minimizing risk and maximize profit in an uncertain real estate environment. “We believe that this new strategy will fulfill that request,” says Brady.

St. Joe says it has not yet completed its analysis, but based on work performed so far, it will incur a non-cash charge of $325 to $375 million in the fourth quarter of 2011. It expects a final estimate by the end of February.

St. Joe is a Florida-based real estate developer and manager. It owns about 573,000 acres of land concentrated primarily in Northwest Florida.

© 2012 Florida Realtors®

GAINESVILLE, Fla. – Nov. 30, 2011 – The consumer confidence index among Floridians remained at 65 in November, a ranking that matches a revised mark set in October and is six points higher than the record low of 59 set in June 2008.
The index used by University of Florida researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.
The November survey reveals a mixture of positive and negative perceptions.
“Consumers are slightly less optimistic about current conditions than they were last month and slightly more optimistic about long-run conditions,” says Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research, which conducted the survey.
McCarty noted that of the five categories used to measure consumer confidence, two decreased, two increased and one remained unchanged. A measurement of respondents’ attitudes about current finances compared to one year earlier, for example, fell two points to 52. However, expectations that personal finances will improve a year from now went up three points to 79.
Respondents’ overall view that the U.S. economy will improve over the coming year fell two points to 52, but their expectation that the economy will improve over the next five years remained unchanged at 67.
Finally, the perception that now is a good time to buy big-ticket consumer items, such as televisions and laptop computers, rose four points to 75.
If consumer confidence attitudes are mixed, so, too, are reports of economic activity. The jobless rate for Florida, for example, remains high at 10.3 percent, though there was an encouraging three-tenths of a percent decline in unemployment from September to October. Some of the new hiring occurred in the health and education sectors. An uptick in Florida tourism also spurred job creation in the leisure and hospitality sectors.
Meanwhile, Florida’s consumer confidence continues to be shaken by a slump in housing activity. The median price for a single-family home at $131,550 is down from both September and October of last year.
The gloomy housing outlook is accompanied by modest good news on gasoline prices, which command a larger share of lower income consumers’ spending. They dropped 7 cents in November from the previous month to $3.35 for a gallon of regular gas.
McCarty anticipates mixed prospects in the future. “The Gross Domestic Product (the nation’s annual product and an indicator of economic health), though revised downward for the third quarter, was still positive at 2 percent nationally,” he says. “Florida’s gross state product is forecast to be low, but positive.”
Although the U.S. and Florida may avoid experiencing the effects of negative GDP, most economic indicators “suggest sluggish growth for the next few quarters,” McCarty says. In addition, worsening economic problems in Europe may drag the U.S. into a lower GDP.
Even though retail sales were down in October and consumer confidence levels are low, McCarthy predicts modest growth this holiday season compared with 2010.
© 2011 Florida Realtors®

WASHINGTON – Dec. 1, 2011 – While mortgage giant Freddie Mac changed affidavit rules for short sales as previously reported, it also made other adjustments to short sales that lenders must follow.
According to Freddie Mac’s latest bulletin, those changes also include:
• Short sale negotiation fees cannot be deducted from the proceeds of the sale or charged to the seller…
• Amounts paid to any party in connection with the short sale transaction must be reflected on the HUD-1, with the amount and recipients clearly identified.
• A seller may receive a payment after the sale only if it’s is offered by the servicer, approved by Freddie Mac, and reflected on the HUD-1.
The full content of Freddie Mac Bulletin No. 2011-23 is available online.
© 2011 Florida Realtors®

CoreLogic: Fewer U.S. homes have negative equity

SANTA ANA, Calif. – Dec. 1, 2011 – CoreLogic released data yesterday that showed 10.7 million residential properties with a mortgage, or 22.1 percent, had negative equity at the end of third quarter 2011. That’s down slightly from 10.9 million properties, or 22.5 percent, in the second quarter. Florida ranks third in percentage of homeowners with negative equity behind Nevada and Arizona.
An additional 2.4 million borrowers nationwide had less than 5 percent equity, referred to as near-negative equity, in the third quarter. Together, negative equity and near-negative equity mortgages accounted for 27.1 percent of all residential properties with a mortgage nationwide in the third quarter, down from 27.5 percent in the previous quarter.
Negative equity, often referred to as “underwater” or “upside-down,” is the condition in which borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.
“Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness,” said Mark Fleming, chief economist with CoreLogic. “The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy.”
Data highlights
• Nevada has the highest negative equity percentage with 58 percent of all of its mortgaged properties underwater, followed by Arizona (47 percent), Florida (44 percent), Michigan (35 percent) and Georgia (30 percent). This is the first quarter that Georgia entered the top five, surpassing California which had been in the top five since tracking began in 2009.
• The top five states combined have an average negative equity ratio of 41.4 percent, while the remaining states have a combined average negative equity ratio of 17.6 percent.
• There are nearly 22 million borrowers, or 45 percent of all borrowers, that have mortgages with an 80 percent or more loan-to-value (LTV) ratio, and 69 percent of those mortgages have above-market interest rates of 5 percent or more. Conversely, only 54 percent of borrowers who have less than 80 percent LTV have above-market interest rates. While above-market interest rates make refinancing at today’s historically low rates a cost-effective step for qualified homeowners, it can be more difficult for borrowers with above-average LTV ratios to qualify for refinancing.
• Of the 10.7 million borrowers in negative equity, there are 6.3 million first liens without home equity loans that have an average mortgage balance of $222,000. They are underwater by an average of $52,000, which equates to an average LTV ratio of 131 percent. The negative equity share for the first lien-only borrowers was 18 percent, and 40 percent had an LTV of 80 percent or higher.
• The remaining 4.4 million negative equity borrowers hold first liens and home equity loans with an average mortgage balance of $309,000. These borrowers are underwater by an average of $84,000 and have an average LTV of 137 percent.
• The negative equity share for first lien borrowers with home equity loans is 38 percent, or twice the share for first lien-only borrowers. Over 60 percent of borrowers with home equity loans have combined LTVs of 80 percent or higher.
• Of the total $699 billion in aggregate negative equity, first liens without home equity loans account for $329 billion aggregate negative equity, while first liens with home equity loans account for $370 billion. CoreLogic estimates that of the $370 billion first liens with home equity loans, $190 billion is due to the first lien component.
• There are 8.6 million conventional loans in a negative equity position that have an average mortgage balance of $272,000 and are underwater by an average of $70,000.
• There are 1.5 million FHA loans in a negative equity position that have an average mortgage balance of $170,000 and are underwater by an average of $26,000.
• Given that bank portfolios account for 15 percent of all first lien mortgage loans, CoreLogic estimates that 1.6 million properties valued at $105 billion of aggregate negative equity are in bank portfolios.
© 2011 Florida Realtors®

WASHINGTON – Dec. 2, 2011 – The Federal Housing Administration (FHA) mortgage insurance program plays an important and vital role in the nation’s housing financing system, and FHA has shown tremendous leadership and strength during the economic crisis, National Association of Realtors® (NAR) President Moe Veissi testified before the U.S. House Financial Services Committee yesterday.
“As the leading advocate for homeownership, NAR believes in the importance of the FHA mortgage insurance program and applauds FHA for continuing to serve the needs of hard-working Americans who want to purchase a home,” said Veissi, broker-owner of Veissi & Associates Inc., in Miami. “FHA has insured loans for more than 37 million families since 1934 and ensures access to safe and stable mortgage financing in all markets, particularly in recent years when private financing evaporated.”
Since the collapse of the private mortgage market, FHA has been one of the primary sources of mortgage financing for responsible, qualified borrowers, who need a downpayment to qualify as low as 3.5 percent. The program is held as a standard for solid underwriting and responsible lending practices. Without FHA, many families – especially those traditionally underserved by the private market – would be unable to purchase a home, and communities would further suffer from foreclosures and blight.
Veissi praised FHA for its financial stability. While FHA has been criticized for having a capital reserve fund below the congressionally mandated level, Veissi said the agency has taken adequate steps to ensure its long-term financial soundness. He noted that FHA continues to have significant resources – enough to pay 30 years’ worth of expected claims on its portfolio – and $2.5 billion in additional cash reserves.
“FHA has shown its considerable strength during the economic and housing downturn, filling the gap when the private market is not engaged in the market. The agency is not subsidized and has never required a federal bailout; actual total reserves are higher than they have ever been,” Veissi said.
Veissi also recommended ways to ensure FHA’s continued strength and availability to homeowners:
• Enhance FHA’s condominium rules.
• Make the reinstated FHA mortgage loan limits permanent.
• Increase the FHA multifamily loan limits in high-rise properties.
Ensuring adequate liquidity for homebuyers and investors will further the housing and economic recoveries, said Veissi.
While NAR supports efforts to strengthen FHA and reduce its current market share, Veissi urged Congress to use caution before making changes to the program because it’s one of today’s primary sources of mortgage financing and critical to the nation’s housing finance system. He said that changes should not be made at consumers’ expense by artificially increasing the cost of homeownership and disenfranchising families, especially while the housing market recovery remains fragile and the private mortgage market is only tentatively engaged.
“We wholeheartedly support the FHA program and we stand ready to work with Congress to enhance FHA’s mission, service and purpose,” Veissi said.
© 2011 Florida Realtors®

WASHINGTON – Jan. 10, 2012 – The number of housing markets showing measurable improvement nearly doubled in January with the addition of 40 new metros to the National Association of Home Builders/First American Improving Markets Index (IMI). The IMI now shows 76 improving markets, up from 41 in December, with 31 states and the District of Columbia represented by at least one entry.
In Florida, three cities made it onto IMI’s improved list: Jacksonville, Cape Coral and Punta Gorda.
“The fact that the list of improving housing markets nearly doubled this month shows that a significant, positive trend is developing, and is even more relevant when you consider the expanding geographic distribution of the list – which now includes 31 states and the District of Columbia,” says NAHB Chairman Bob Nielsen. “This trend could be even stronger if not for the numerous impediments that continue to slow a housing and economic recovery, including overly restrictive lending policies and the growing inventory of distressed properties in certain markets.”
The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau.
NAHB uses the latest available data from these sources to generate a list of improving markets. A metropolitan area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.
“While relatively small metropolitan areas continue to dominate the list of improving housing markets, it’s important to note that several major metros in diverse parts of the country have now joined the field as well – including such metros as Dallas, Denver, Honolulu, Indianapolis, Nashville and Philadelphia,” says NAHB Chief Economist David Crowe. “This is an encouraging sign that gradually strengthening economic conditions are starting to take hold across a broader swath of America.”
Five metropolitan areas dropped from the IMI in January, though none in Florida. A complete list of all 76 metropolitan areas currently on the IMI is available on NAHB’s website.
© 2012 Florida Realtors®

TALLAHASSEE, Fla. – Jan. 23, 2012 – An issue discussed at the recent Florida Realtors Mid-Winter Meetings appears resolved, at least for now. Citizen’s Property Insurance Corp. – the state-owned insurer of last resort – relied on a single vendor, 360Value, to estimate a building’s replacement costs that, in turn, impact the amount of property insurance an owner had to buy.
A number of Realtors and homeowners, however, felt that 360Value overestimated replacement costs, forcing owners to overpay for insurance. Consequently – and in response to criticism from Florida Realtors, homeowners, the media and others – Citizens says it will now consider other sources when calculating replacement cost, including other software firms, appraisers, contractors and more.
“Florida Realtors has followed Citizens’ actions closely, and we discussed replacement costs at the recent Mid-Winter Business Meetings,” says Florida Realtors Senior Vice President of Public Policy John Sebree. “This issue is important to Realtors, homeowners and buyers, and we’re pleased with Citizens’ decision to expand replacement cost appraisals.”
As a state-owned insurer, Citizens cannot raise rates beyond 10 percent per year; but critics of the replacement cost appraisals claimed Citizens found a way to raise rates by skirting the yearly cap – simply force policyholders to buy more coverage than needed.
In response, Citizens said that wasn’t true, and that replacement cost differs from market value. Buying a foreclosed home, for example, many times costs less than the money it would take to build that same home.
The problem started in late 2010 when Citizens started to use 360Value exclusively. Homeowners could not get alternative appraisals if they disagreed with the values released by the vendor. Effective now, however, Citizens will still use data from 360Value, but it will also accept the following to calculate replacement costs:
• Estimates from other vendors, such as MSB and e2Value
• An appraisal from someone licensed to estimate insurance reconstruction costs, which can be different than market value
• A general contractor, architect or engineer estimate, providing it includes a contract price for reconstruction and an itemized list of features in the home
• A property inspection report, providing it’s been conducted within the previous 12 months
Citizens officials have not said how they will deal with past problems, however. Some owners balked when their insurance premiums went up based on new and higher replacement cost estimates, but they continued to pay the higher premiums anyway. Under the updated rules, it’s not clear if Citizens will make a new estimate retroactive, and, if so, whether a property owner can expect reimbursement for premiums already paid.
© 2012 Florida Realtors®

WASHINGTON – Jan. 23, 2012 – Acting Federal Housing Administration (FHA) Commissioner Carol J. Galante announced the latest in a series of steps designed to strengthen FHA’s Mutual Mortgage Insurance Fund. FHA issued a final rule governing its lenders and announced a new rule, which it has not yet published, to “reduce the maximum allowable seller concession from its current level to one more in line with industry norms.”
Under current law, a seller may contribute 6 percent toward the buyer’s closing costs, which include prepaid expenses, discount points and other financing concessions. FHA previously proposed a lower rate in July 2010 and says its soon-to-be-released rule proposal will be based, in part, on comments received following that recommendation. The new proposal will also have a 30-day comment period once published in the Federal Register. FHA says a final rule will become effective after all comments are analyzed.
Any rule change remains controversial. If a seller cannot contribute more than 3 percent or 4 percent to closing costs, a buyer must bring more money to the table. The change could impact a housing market still finding its feet after the recent meltdown.
FHA, however, says the change is needed to keep FHA funding viable. According to FHA, the 6 percent cap creates “incentives to inflate appraised value.”
Lender requirements
The tighter lender rules call for FHA-approved banks, which insure more than 80 percent of all FHA forward mortgage loans, to meet stricter performance standards.
HUD may require indemnification for ‘serious and material’ violations of FHA origination requirements. A lender must also show a low delinquency rate. FHA says it will monitor lender performance on an ongoing basis.
The new lender rules have been published by HUD and are available online.
© 2012 Florida Realtors®

ORLANDO, Fla. – Jan. 24, 2012 – Response time can be the No. 1 deal breaker when securing business with a client.
Craig Grant drove that point home during his “How to Become a Realty Mobile Warrior” presentation at Florida Realtors Mid-Winter Meetings in January. If an agent responds within one hour, there’s an 84 percent chance of securing the business, he said. Wait 24 hours, and the percentage drops to 11 percent.
However, mobile technology needs vary. If an agent just wants to stay in touch, check email and use apps to monitor the local market, the mobile setup will be much different than a fully functional “office” at your fingertips.
The bottom line: You need to be in touch with the world. A good starting point before buying or upgrading to a mobile office is to set a budget, and make a list of the features and requirements needed now and in the foreseeable future.
To that end, Grant offers these suggestions:
• Do you want to run your entire office remotely? If so, you need a laptop, notebook or ultra portable computer with lots of performance power. Compare size, price, weight and portability of each device. Tablet computers, such as iPads, are designed for mobile productivity but require workarounds for compatibility issues.
• Do you just want to take calls, use email and apps? Smartphones serve many purposes, but because of their size, processor and browser limitations, be clear about what functions you need to access. What sites do you visit with your mobile device? Do they have mobile dashboards?
• Before buying hardware or software, read online reviews, which can be found using Google – or any search engine.
• Talk to salespeople/geeks – don’t depend on the advice of a friend’s 16-year-old techno whiz. Pay special attention to the ones who ask you: What are you using this equipment for?
• Make sure your existing equipment is compatible with upgrades. Microsoft.com and Apple.com can show you if a potential new computer would run your old programs.
• What type of tech support does it need? The Florida Realtors Technology Helpline is a free resource for members and available six days a week as a support backup to answer questions. Manufacturers also offer online support – but be ready to hang on the line for a long time.
• Consider battery life, number of ports and other functionality features. Closely study phone data plans for the devices. For instance, video presentations and live streaming eat up data usage on a Smartphone or iPad pretty fast if you don’t have WiFi access. Speaking of WiFi, PDAnet software and apps can turn your smart phone into a wireless router so you can connect to your computer (MAC or PC) and iPad. • Depending on the device, you may need workaround solutions to access forms and MLS data. Form Simplicity users, for instance, can view forms but can’t open or modify contents on an iPad. However, remote desktop-sharing software solves that issue. The Florida Realtors Technology Helpline suggests using TeamViewer software so that the iPad essentially owns your remote computer and can use functions from there.
Working out of the office is just part of the way Realtors do business. Get the right tools, and you’re on the road to success.
© 2012 Florida Realtors®