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By Christopher Lyon | Real Estate Pro in Venice, FL
  • Allstate Sues Bank of America Over Countrywide Mortgage Losses

    Posted Under: Financing in Sarasota  |  December 29, 2010 11:39 AM  |  457 views  |  No comments

    Allstate Corp. has sued Bank of America Corp., its Countrywide lending unit and 17 other defendants for allegedly misrepresenting the risks on more than $700 million of mortgage securities it bought from Countrywide.

    Allstate, the largest publicly traded U.S. home and auto insurer, alleged it suffered "significant losses'' after Countrywide misled it into believing the securities were safe, and the quality of home loans backing them was high.

    The lawsuit also names several former Countrywide officials as defendants, including longtime Chief Executive Angelo Mozilo. Countrywide was the largest U.S. mortgage lender before Bank of America bought it in July 2008.

    Allstate said that starting in 2003, Countrywide quietly decided to boost market share and ignore its own underwriting standards by approving any mortgage product that a competitor was willing to offer, in a "proverbial race to the bottom.''

    Countrywide then passed on the added risks to investors who bought debt backed by the mortgages, Allstate said.

    "Defendants knew the loans offloaded onto Allstate were a toxic mix of loans given to borrowers that could not afford the properties, and thus were highly likely to default,'' said the 150-page complaint filed Monday in Manhattan federal court.

    Allstate seeks to undo its securities purchases, which took place between 2005 and 2007, plus unspecified damages.

    Read more: http://www.insurancejournal.com/news/national/2010/12/28/115976.htm#ixzz19WyEdRIw
  • Allstate says "Thanks for all the home owners insurance premiums. See you later"

    Posted Under: Home Insurance in Sarasota County  |  November 30, 2010 8:42 AM  |  461 views  |  No comments

    A reader by the name of Kathie sent us this recently:

    My 90 year old mother's homewoners insurance with Allstate was recently cancelled.  All they are insuring is contents only and minimal at that.  She has had her auto, property and jewelry policies with Allstate since 1969.   Several other tenants in her condo have Allstate and they were not cancelled.  She was offered Univeral, but with no policy form or pricing as to what to expect.  She is on fixed income as is most of the elderly people in Florida.  Please advise what I can do to ensure my mother can keep Allstate as her insurance carrier.

  • Extremely Active Atlantic Hurricane Season was a 'Gentle Giant' for U.S.

    Posted Under: Home Insurance in Sarasota County  |  November 30, 2010 8:30 AM  |  427 views  |  No comments

    The 2010 Atlantic hurricane season, which ends tomorrow, was one of the busiest on record, according to the National Oceanic and Atmospheric Administration. In contrast, the eastern North Pacific season had the fewest storms on record since the satellite era began.

    In the Atlantic Basin a total of 19 named storms formed – tied with 1887 and 1995 for third highest on record. Of those, 12 became hurricanes – tied with 1969 for second highest on record. Five of those reached major hurricane status of Category 3 or higher.

    These totals are within the ranges predicted in NOAA's seasonal outlooks issued on May 27 (14-23 named storms; 8-14 hurricanes; 3-7 major hurricanes) and August 5 (14-20 named storms; 8-12 hurricanes; 4-6 major hurricanes). An average Atlantic season produces 11 named storms, six hurricanes and two major hurricanes.

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    Large-scale climate features strongly influenced this year's hurricane activity, as they often do. This year, record warm Atlantic waters, combined with the favorable winds coming off Africa and weak wind shear aided by La Niña energized developing storms. The 2010 season continues the string of active hurricane seasons that began in 1995.

    But short-term weather patterns dictate where storms actually travel and in many cases this season, that was away from the United States. The jet stream's position contributed to warm and dry conditions in the eastern U.S. and acted as a barrier that kept many storms over open water. Also, because many storms formed in the extreme eastern Atlantic, they re-curved back out to sea without threatening land.

    "As NOAA forecasters predicted, the Atlantic hurricane season was one of the most active on record, though fortunately most storms avoided the U.S. For that reason, you could say the season was a gentle giant," said Jack Hayes, director of NOAA's National Weather Service.

    Other parts of the Atlantic basin weren't as fortunate. Hurricane Tomas brought heavy rain to earthquake-ravaged Haiti, and several storms, including Alex, battered eastern Mexico and Central America with heavy rain, mudslides and deadly flooding.

    Though La Niña helped to enhance the Atlantic hurricane season, it also suppressed storms from forming and strengthening in the eastern North Pacific. Of that region's seven named storms this year, three grew into hurricanes and two of those became major hurricanes. This is the fewest named storms (previous record low was eight in 1977) and the fewest hurricanes (previous record low was four in 1969, 1970, 1977 and 2007) on record since the satellite era began in the mid-1960s. An average eastern North Pacific season produces 15 named storms, nine hurricanes and four major hurricanes.

    NOAA's National Weather Service is the primary source of weather data, forecasts and warnings for the United States and its territories

  • The Time is Not Right to Drop Real Estate Professionals E&O

    Posted Under: Home Buying in Sarasota County, Home Selling in Sarasota County  |  November 30, 2010 8:25 AM  |  474 views  |  No comments

    By Jim Donovan
    November 29, 2010

    The ongoing downturn in the real estate market is forcing many professionals to make tough choices on where to trim expenses. While during a hot real estate market realtors would not consider dropping their errors and omissions (E&O) coverage, when business is slow and earnings are down, some professionals question the need for — and the cost of — E&O insurance. The fallacy in that reasoning is the assumption that E&O insurance is valuable only when client contact is high. Yet the coverage is also crucial when former clients have become dissatisfied with their earlier transactions.

    Understandably, the current financial situation is foremost in the minds of many real estate professionals. According to the 2010 National Association of Realtors (NAR) Commercial Member Profile, realtors' median annual income swooned nearly 31 percent in 2009. The earnings picture does not look brighter this year. While home prices nationally did rise 3.6 percent for the 12-month period ending Aug. 31, according to the S&P/Case-Shiller Home Price Index, offsetting that good news are several persistent problems.

    The recent pricing gain follows a plunge since 2007 of 22.6 percent in the median price of previously owned homes, dropping prices to 2003 levels, according to the NAR. In especially hard-hit regions, prices have dropped more than 50 percent since the real estate bubble burst in 2006. Meanwhile, millions of additional foreclosures are anticipated in the next few years, which would add to the existing oversupply of homes and drive down prices further. Some 11 million homeowners currently have mortgages exceeding the value of their homes, and 4.8 million of them are more than 60 days past due on payments, a 30 percent increase from a year ago.

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    Fearful of their job security in an economy with its highest unemployment rate in a generation, many potential buyers are staying out of the market. In July, following the expiration of a federal tax credit for homebuyers, home sales fell a record 26 percent from July 2009 levels. August sales rebounded but still were 19 percent below August 2009 levels, the NAR reported. Given those conditions, many real estate experts are predicting additional drops in home prices over the next few years, until the home inventory glut has been eliminated.

    Liability Problems Ahead

    Real estate professionals should keep in mind that all these factors can signal E&O liability problems ahead. Because claims can take three to five years to develop, fallout from today's transactions will not appear immediately. Clients upset about the plummeting value of their recent real estate investments may file suit against any professional involved in the real estate transaction, starting with the real estate agent and broker.

    In those lawsuits, the two hot-button allegations are:

    • Failure to disclose pertinent information and misrepresentation of other information, all of which eventually harmed the plaintiffs financially.
    • Upselling where plaintiffs allege they were talked into buying an unaffordable house. They claim their agent facilitated a loan that provided affordable payments initially until the buyer could flip the property, which the agent assured could be done at a substantial profit.

    Of course, many of those claims are frivolous. Markets heat up and markets cool down. Some buyers and sellers are either skilled or lucky in timing their transactions to take advantage of those market cycles, and some are not.

    Regardless of the legitimacy of those claims, real estate agents or brokers who represented their clients professionally and conducted themselves ethically with other agents and their clients could still find themselves named as defendants in E&O lawsuits. The cost of defending those cases typically starts at $10,000 and has been known to reach $30,000. Some claims are more difficult for agents and brokers to successfully defend, and in those cases the transactions can have the appearance of impropriety, even if the professionals represented the clients as well as possible.

    One example of a typical claim is if an agent or broker was a party in a transaction and did not disclose that information to all the other parties in the deal.

    Another example is if an agent or broker did not inform a buyer client that the property involved in the transaction was being flipped quickly at a significant profit, even though the current owner made no substantial improvements to the property.

    This is not the time for real estate professionals to drop or weaken their professional liability coverage. The premium savings would be a small fraction of the defense and settlement costs that the uninsured professional might have to shoulder.

    Claims-Made and Prior Acts

    Some professionals consider dropping their E&O insurance, mistakenly believing that the premiums they have paid for years have secured them future coverage for claims arising from past transactions. However, that is not how professional liability insurance works as it is written on a claims-made form.

    At the end of a policy year, there often is no indication whether a claim will arise from a transaction that was completed during that period. A claim might not be filed for years. However, unlike occurrence-based insurance, claims-made coverage generally applies only to claims made against the insured during the time the coverage is in effect and requires the policyholder to notify the insurer of the claim within the policy period or during the 30- to 90-day tail period after the policy period ends.

    Since the policyholder often will not become aware of a claim during the 14- to 15-month combined policy and tail period, E&O insurers offer prior-acts coverage. This policy provides insurance coverage for claims arising from transactions completed years earlier, as long as the policyholder has maintained continuous coverage with prior-acts coverage during that entire period.

    Another E&O coverage problem sometimes occurs even when agents and brokers do not drop their E&O coverage, but instead switch insurers for cheaper rates. During negotiations over the new policy, various coverage options are typically reviewed, sometimes including eliminating prior-acts coverage. Dropping that coverage can be tempting because of the resulting reduction in premium. However, that could be a costly mistake since neither the new policy nor the expiring policy would cover claims relating to past transactions if those claims arose after the original policy's tail period had expired.

    The financial constraints of a tough economy don't provide an excuse to skimp on professional liability coverage. Doing so can be as dangerous for real estate professionals as would neglecting fraying nets for high-wire acts just because they are performing for smaller audiences.

    Donovan is senior vice president of professional liability for Liberty International Underwriters.

    Read more: http://www.insurancejournal.com/news/national/2010/11/29/115230.htm#ixzz16mcWQ8j3

  • Good News for Citizens Insurance Customers in Sarasota & Manatee Counties

    Posted Under: Home Insurance in Sarasota County  |  November 30, 2010 8:19 AM  |  430 views  |  No comments

    Some Florida residents whose mobile home insurance is provided by Citizens Property Insurance will be enjoying lower premiums soon as the firm has announced that it will provide decreased premiums to its policyholders despite recently receiving news that state regulators have approved a 10% increase for the insurance company's policies.

    Homeowners who live in counties like Sarasota and Manatee who have Citizens Property policies not including catastrophic coverage like hurricanes and sinkholes will be provided with a rate lowered by 3.4%. This is despite the fact that the Florida Office of Insurance Regulation has recently approved a 10.3% increase for property policies statewide and an increase of 9.2% for mobile property policies.

    Citizens Property reportedly requested for a 9.7% rate increase. However, state insurance regulators approved rates that are higher than what the firm had requested because, according to them, they used a different method of calculating the needed rate. They added that the Florida Hurricane Catastrophe Fund was not included in regulators' calculation of new rates.

    Meanwhile, mobile home insurance rates among Citizens Property clients in Sarasota and Manatee will also enjoy certain amounts of savings. The firm has revealed that policy rates for mobile properties will decline by 14%, excluding catastrophic coverage. The 14% decline will cover the coastal areas of Manatee, while non-coastal Manatee areas, and the whole Sarasota County region, will be given a 17.3% decrease in their mobile property policies.

    Citizens has over 23,000 policyholders in the county of Manatee and over 54,000 policyholders in the county of Sarasota. According to the insurance firm, the request for increase was due to rising sinkhole claims and other property risk factors. Insurance industry observers have stated that the increased rates are needed to allow Citizens, a state-backed provider, to avoid any competition with private insurance firms and to allow the firm to be self-sufficient.

    Insurance experts have also added that the 10% rise in rates granted by regulators will greatly help the program, but sooner or later, further increases will be needed to keep the program going. Meanwhile, residents in covered counties are thankful that they were given some breathing space in the form of lower mobile home insurance and regular property insurance rates
  • HomePath Financing for HomePath Homes

    Posted Under: Home Buying  |  March 3, 2010 12:11 PM  |  359 views  |  No comments

    More and more home buyers are looking for REO properties since short sales can take forever to even get an answer.  One of the best sources for REO properties is www.homepath.com.  These are Fannie Mae owned homes that offer special financing and incredible deals.  There are literally hundreds of homes listed on the site and more are added weekly. 

    Many buyers and Realtors have questions regarding the financing that is available for HomePath Homes so lets start at the beginning. There are two types of financing available depending on the property.  

    HomePath Mortgage is available on most properties and requires as little as 3% down with no Appraisal or Mortgage Insurance.   These properties can be bought as a Primary Residence, Second Home or Investment Property. Fannie Mae is currently paying 3.5% of the sales price for owner occupied properties and if negotiated correctly the "Seller" can pay up to 9% of the sales price depending on the Loan to Value.  This program is great for First Time Home Buyers and Buyers looking for a second home or future retirement home.  I recently closed a loan for a customer that had been working with Bank of America for two months who need two extensions in two weeks after I received a request from his Realtor for help and he was an out of state buyer.

    The second type is the HomePath Renovation Mortgage that will allow up to $30,000 of repairs to be added to the purchase price to renovate the home.  This program also allows you to put as little as 3% down with no Mortgage Insurance but it does require an Appraisal.  This program is only available for Primary Residences and does require some specific requirements.  A Full Appraisal "subject to repairs" with interior and exterior inspection is required and can be valued "As - Completed" or the sum of the sales price and the total renovation cost and allowable fees.  The work must be completed by a Licensed Contractor and the work must be completed within 3 months.  These loans are handled more like a construction loans with "draws" disbursed as work is completed.  There are very few lenders offering this program so it is very important to work with an experienced local lender to make sure the process goes smoothly.

    HomePath Mortgage and HomePath Renovation Mortgage are both great programs but it is important to work with an experienced HomePath approved lender that knows how the programs work.  It is always better to work with a local lender instead of a large national company that just hands you off to a processing department that takes days to return phone calls.  I have closed a HomePath Mortgage in 2 weeks because I take the time to make sure the loan is handled properly and professionally.  If you would like to see if you or your clients would qualify for HomePath Financing or you have questions regarding the program give me a call or email me.  I have almost 20 years of experience and can help you with all of your financing needs. 

  • Florida Home Sales Rise

    Posted Under: Home Buying  |  March 3, 2010 12:04 PM  |  336 views  |  No comments

    Florida’s existing home sales rose in January, marking 17 months that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®.

    Existing home sales increased 24 percent last month with a total of 10,465 homes sold statewide compared to 8,444 homes sold in January 2009, according to Florida Realtors

    Sixteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales in January.

    “Now is the time for anyone thinking of buying a home in Florida to make that decision,” said 2010 Florida Realtors President Wendell Davis, a broker and regional vice president with Watson Realty Corp. in Jacksonville. “Markets across the state are seeing increased sales, yet conditions remain very favorable with still-low mortgage rates, a range of housing inventory and attractive prices. As an added incentive, buyers need to accelerate their plans because a purchase contract must be in place by the end of April to take advantage of the extended and expanded federal tax credit. To find out more, consult a Realtor about options, qualification criteria and opportunities in your local housing market.”

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