Lakewood Ranch, FL Blog

Thank you to all of my customers who responded so favorably to the Five Star Independent Survey of Customer Service for 2010.  Although this recognition can be used as an advertising vehicle (I chose not to take advantage), it remains an independent research study of past customers and recognizes the top 7 percent of all real estate agents in Sarasota based on customer satisfaction.

That is my focus and my greatest concern and, frankly, it feels great that my customers recognize it through all of my efforts!

Apparently, we have learned nothing.  There are a number of reasons for the housing meltdown but clearly one aspect of the mess was the government's requirement of lenders to make loans to people who had no business getting into loans they couldn't afford.  To no one's surprize, many of those loans have gone into default.

So, what should we have learned from this?  Make sure people really can afford the homes they purchase and the loans they take to get them, right?  Anyone?  Anyone?  Well, not so fast.  The USDA (the people who inspect meat?) backs a loan product for lenders that doesn't require any downpayment for the purchase of a single family home.  Funding for these loans is running out but Congress is working to generate new funding for these loans by increasing fees.  If this was limited to farming-related property or was limited to military members and first responders, I guess I wouldn't have a problem with it.  However, as I understand it, the product can be used to purchase property in such rural areas as....Lakewood Ranch.

I am a Realtor so obviously I am for anything that responsibly puts people in homes but I am also a citizen of the US who cares about my country's future.  I hope that Congress learns from the banking fiasco we've been through and smartly works to eliminate the loopholes found in programs like this one.  Otherwise, they are swapping one mess for another.

I often hear from buyers that prices are likely to stay down because there is "another wave" of foreclosures on the horizon. I'm not sure from where this information originates but I've heard the same thing myself on the various news and business news TV shows.  That's why I was very interested to read an article today that said the share of homeowners behind on their mortgages fell in the first quarter, the first drop in four years and a possible sign that the foreclosure crisis has peaked.

The portion of mortgages that were delinquent 30 days or more fell to 6.57 percent in the first quarter from 6.60 percent in the last three months of 2009, according to Equifax and Moody’s Economy.com.

That’s a drop of about 16,630 delinquent loans and, though modest, it is the first decline in the delinquency rate since early 2006.  I am not an economist but I look at that and I see yet another sign of a turn around.  If we really have peaked with foreclosures (and it must happen sometime) we will finally begin the process of relieving the downward pressure on market values and that, combined with the evidence we are seeing now of increased market activity in terms of sales and pending sales, should eventually equate to reduced inventories and higher prices.  Maybe not great for buyers but really great news for those who are underwater and struggling.

No doubt there are still many hurdles to overcome before the economy turns around and (if I may politically editorialize for a moment) government MUST stop spending like there's an unending source of money out there but I'm beginning to think that the light at the end of the tunnel is no longer a gorilla with a flashlight!

These days, it almost feels like an archaic term: "home equity loan".  With the media focusing so much attention on homeowners who are "underwater", the idea of getting a home equity loan (or finding a lender who will offer a home equity loan for that matter) seems like an unlikely proposition.  However, there are many property owners who don't need to sell anytime soon and who have equity in their homes now.  If that's you and you have a need for the money, you might want to talk with a lender.

I just read an article that said lenders are expected to make about $36 billion in new home equity loans over the next year, according to Moody’s Economy.com. That’s actually more than the $34 billion in home equity loans made in 2008.  The article goes on to say that lenders prefer to see the money go toward projects that will enhance the value of the property such as updating a bathroom or kitchen, or replace a roof...that sort of thing. 

So, it was that time of the year again...time to renew my homeowners insurance policy.  I'll admit that normally I don't give a great deal of thought to such things but, this year, the price increase of about 30% got my attention.  I called my agent and suggested it was time to shop around for a new insurer.  She came up with one that I had never heard of but the price was right so I said OK.  However, as I read the material, I discovered that they wouldn't cover a property if there was a breed of dog found on the "bad dog" list.  Just my luck, my sheepish German Shepherd (who fears her own shadow) disqualified me from the new company so, again, my agent searched around and found a new company that was, apparently, less concerned with my dog and so, I signed.  Even better, the price was lower than the first replacement company!   What could be better?

A few days later, the Sarasota Herald Tribune reported that Florida has a number of smallish insurance companies which technically meet the legal requirements the state demands but, in the case of a major disaster (like, I dunno, a hurricane?), would be incapable of covering all of their claims!  Naturally, they had a lineup of the 6 or 8 worst of the worst companies and, wouldn't you know it, there was my bright, shiny, new insurance company listed among the weaklings.  Although they are A-rated by Demotech, a company that specializes in that sort of thing, the researchers at the newspaper were able to determine that these companies would not be able to handle a widespread disaster. 

Sound familiar?  Doesn't that sound just like the mess we've been going through in this country for the past few years because the people responsible for making sure that the banking system was sound were, in fact, asleep at the wheel?  Are we about to have yet another fianancial shoe drop here in Florida?  It sure sounds possible.

To her credit, I read that Alex Sink, Florida's Chief Financial Officer, has called upon the State Insurance Commish Kevin McCarty to get to the bottom of this potentially horrific situation before the 2 million families covered by these companies find themselves at a complete loss.  Another positive sign...the Florida Senate Insurance Committee is supporting legislation to raise the minimum capital contribution requirement for Florida insurers from $4 million to $15 million.  That will help assure that insurers are stronger and better equipped to handle major claims but I have a feeling much more will be needed before we are really safe.  Remember, even if you are not insured by one of these weak companies, you are still facing major losses to your net worth if your property is surrounded by homes that won't be fixed following a hurricane because your neighbor's insurance company can't cover their insured's losses.