HUD - No Down Payment Mortgages in Hurricane Regions
Topic: Mortgage News
WASHINGTON -- Oct. 13, 2005 -- The Department of Housing and Urban Development (HUD) announced that HUD has a mortgage financing program that requires no downpayment for people whose homes have been destroyed or damaged due to Hurricanes Katrina or Rita. In addition to requiring no downpayment, potential homeowners can live anywhere they choose in the United States.

"HUD is committed to helping people affected by these terrible disasters to re-establish their lives," says HUD Secretary Alphonso Jackson. "We want to give these families and individuals an opportunity to start over -- as homeowners -- whether they owned or rented their previous residences."

Under the special mortgage program, called Section 203(h), HUD, through the Federal Housing Administration (FHA), will insure mortgages for individuals or families in a presidentially declared disaster area whose residences were destroyed or damaged to such an extent that reconstruction or replacement is necessary.

Borrowers must be able to qualify for FHA mortgages, which are generally easier to qualify for than those on the private market, but they will not have to put any cash down. In addition, the FHA mortgage insurance premiums can be financed into the mortgage amount, so only minimal closing costs would be required.

An added benefit of the 203(h) mortgages, which are offered by any FHA-approved lender, is that they can be used anywhere in the U.S. For example, Katrina victims from Louisiana can choose to move wherever they wish. The mortgage amount is limited, but can be as much as $312, 895, depending on the average sales prices in the area.

For More Information on 203(h), contact a HUD-approved lender, the HUD National Servicing Center Hotline at 1 (888) 297-8685, or HUD's Web sites: www.hud.gov and espanol.hud.gov


? 2005 FLORIDA ASSOCIATION OF REALTORS?

Mortgage Rates Hit 6% and Climbing
Topic: Mortgage News
NEW YORK -- Oct. 14, 2005 -- Americans may have seen the last of long-term mortgage rates below 6 percent, and borrowing costs for home buyers likely will climb further, slowing frenetic demand that has stoked U.S. housing in recent years.

Realtors have spotted a drop in the appetite for housing in recent months, and a survey of lenders from Freddie Mac on Thursday found that rates for 30-year mortgages - a popular home loan - have crested 6 percent for the first time since March.

"The most likely pattern is for mortgage rates to gradually rise over time. It is likely that they'll hover at 6 percent or just a bit over," said Frank Nothaft, chief economist at Freddie Mac. He added that "will translate into somewhat weaker demand for housing, lower home sales volume and lower house price growth."

Douglas Duncan, chief economist at the Mortgage Bankers Association, an industry trade group said that "because of increased concerns about inflationary pressures, it will stay above 6 percent."

In raising interest rates last month, Federal Reserve policy makers expressed their concerns about inflation. And earlier this week, meeting minutes from those Fed officials hinted at more interest rate increases.

These concerns have been noticed in the broader financial markets, especially the U.S. Treasury securities market where interest rates have risen, tugging mortgage rates with them.

According to Freddie Mac, the U.S. housing agency which sells guarantees for home loans, this week's 6.03 percent for 30-year mortgages is the second highest level of the year. Thirty-year rates were at 6.04 percent in the March 31 week.

This week is also the third time this year mortgage rates are above 6 percent - an important psychological level. When rates were below 6 percent, this helped spur home buying and refinancings of home loans that allowed Americans to spend their way out of the most recent economic downturn.

The low mortgage rates have supported consumer spending on goods and services - which accounts two-thirds of the nation's gross domestic product - because low borrowing costs allowed home owners to draw money from properties that had appreciated in value.

Also, the steady rise in the cost of money is sure to limit home price appreciation because buyers won't be able to as readily bid up prices on homes for sale.

"It is going to definitely cause more of a slowdown," said Brenda Binczewski, a realtor at Carlson GMAC Real Estate in Palmer, Mass. Binczewski said she has seen a drop in business since July and has not had multiple offers for a home in three or four months.

By contrast, a year and a half ago a single home could have two or three offers, Binczewski recalled.

Freddie Mac's Nothaft pointed out that he does not expect a sharp drop in home prices or home sales because the rise in mortgage rates has been gradual. "It would be different if we had a spike in mortgage rates," said Nothaft.

Duncan noted that some home buyers may resort to adjustable rate mortgages (ARMs) which initially have lower borrowing costs.

"As fixed rates rise, ARMs will become a bigger factor," said Stephen LaDue, president of Affiliated Mortgage of Wauwatosa, Wisconsin. "The rate of increase in home values will slow or will start to stagnate" because of higher rates, he said.

In its survey, Freddie Mac found that adjustable rate mortgages, which are linked to one-year Treasury rates, were offered 4.85 percent this week. That is up from 4.77 percent a week ago and 4.01 percent 12 months ago.

Further interest rate increases by the Federal Reserve probably will push ARM rates even higher, analysts said.

At the same time, a few consumers prospecting for properties - especially those prequalified by lenders - may be spurred into action by the rising interest rates.

"People may start buying before it (the mortgage rate) goes up any more," Binczewksi said. "They would make offers because they have rate locks. Now, with rates increasing, they won't want to lose rate locks."

Associated Press Economics Writer Martin Crutsinger in Washington, D.C., contributed to this report.

Copyright ? 2005 Associated Press, Aleksandrs Rozens. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

NHAB RELEASES STUDY ON IMPACT OF KATRINA
Topic: New Homes

(Washington September 2nd 2005) - Economists for the Nationa Association of Homebuilders (NAHB) today released the following report on how the destruction spawned by Hurricane Katrina could affect the price and supply of building materials...

Impact of Hurricane Katrina on Building Materials and Prices

The full extent of the impact of Hurricane Katrina on the overall economy and on the housing market is still unclear, and the immediate focus is properly on human life and health, but the number of homes destroyed by this catastrophe is almost certain to dwarf the losses from any previous U.S. natural disaster. Past experience, together with the visible devastation, provides some basis for projecting the effects on construction activity, the supply and cost of building materials and construction labor, and other implications for the housing market.

The number of housing units destroyed (made uninhabitable and beyond economically-justified repair) by Hurricane Andrew in 1992 was estimated at over 28,000. The combined effect of Hurricanes Jeanne, Ivan, Frances, and Charley in 2004 was almost as large, with nearly 27,500 housing units destroyed, according to estimates compiled by the American Red Cross. In those cases, most of the destruction was caused by winds or the immediate force of the storm surge. The number of homes with major but reparable damage was more than twice the number destroyed. The 1906 San Francisco earthquake/fire reportedly destroyed 28,000 "buildings."

Katrina also caused widespread immediate damage in Louisiana, Mississippi, and Alabama, but the flooding in New Orleans, Mobile, and elsewhere is likely to translate into much larger numbers of homes destroyed. Although the floods generally did not tear off roofs or walls or cause structures to collapse, many homes will be permanently uninhabitable. The flood waters carried contaminants that cannot easily be removed, and even if the water were clean, prolonged submersion would cause structures to be damaged beyond repair. This is likely to be the fate of a large share of the more than 200,000 homes in the city of New Orleans.

Of necessity, rebuilding will have to wait. The immediate need will be to clean up and repair damage to structures that are still viable. The repair process will absorb much of the construction labor near the affected area and several key materials that would otherwise have been used to build new homes. The materials that will be most affected include roofing and wood panels (plywood and OSB). Demand for other materials, such as concrete, is likely to decline initially, as planned projects are cancelled or delayed during the initial recovery period.

The storm will have impacts on the supply of materials as well as demand. The areas affected by the storm have a significant number of wood product facilities that may have been damaged or destroyed. On the other hand, trees that have been blown down will need to be harvested on an accelerated basis, perhaps helping to lower wood product prices in the medium term.

Additionally, imports of building materials will be disrupted by the damage to port facilities. New Orleans was the top destination for imports of cement and a number of other building materials into the U.S. in 2004. Cement imports, in particular, involve the use of specialized terminal facilities. The New Orleans and Mobile customs districts reported about 12 percent of national cement imports in 2004.

Congestion caused by diversion of shipping to other ports will also probably disrupt some supplies of materials, as will land transportation problems caused by damage to roads, rail, and reload centers.

From July 1992 to September 1992, largely as a consequence of Hurricane Andrew, the average price for plywood increased from about $222 per 1,000 square feet to $321, and the price of Southern pine framing lumber rose from $264 per 1,000 board feet to $308. The hurricanes in 2004 did not trigger a similar increase, and prices actually fell during the relevant period, after soaring during the preceding year. The combination of greater (partly speculative) demand and disrupted supply produced a spike in lumber and panel prices in the final days of August 2005. With production already running at full capacity for wood panels, further increases for those products, as well as for roofing, are likely.

Although the loss of tens of thousands of homes implies increased demand for, and construction of, new homes, past experience has shown that there is no massive surge in home building in affected areas. Replacing units destroyed by the storm will not begin for many months and will take place slowly, over a number of years.

In Dade County (now called Miami-Dade), the number of residential permits was 9,026 or 7.8 percent of the state total in 1993, the year following Hurricane Andrew. That share of the state was slightly lower than the county's 7.9 percent share in 1991. By 1995, there was an increase to 14,718 or 12.0 percent of the state, but that number still wasn't much greater than what might have been expected if there hadn't been a hurricane.

The experience in other areas, such as Alameda County, Calif. following the 1991 fires and Charleston, S.C., after Hurricane Hugo in 1989, was similar. Homes were rebuilt or replaced very slowly.

About NAHB - The National Association of Home Builders is a Washington-based trade association representing more than 220,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. Known as "the voice of the housing industry," NAHB is affiliated with more than 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the more than 1.93 million new housing units projected for 2005, making housing one of the largest engines of economic growth in the country.

Home Sales Forecast
Topic: Real Estate Market
WASHINGTON -- Oct. 13, 2005 -- The forecast for home sales has trended up as the year progressed, fueled lately by added demand resulting from the impact of recent hurricanes, according to the National Association of Realtors? (NAR).

David Lereah, NAR's chief economist, said that at the beginning of the year it was thought that 2005 would be the second best total for both existing- and new-home sales, but by June it was apparent that another record was in the works.

"Post-Katrina, our sales projections for this year have moved even higher," Lereah says. "Short-term momentum is very strong, and our Pending Home Sales Index just set a record. In addition to the housing needs of hurricane victims, we may be seeing some 'fence jumping' from homebuyers who are getting into the market before interests rates move higher."

Existing-home sales are forecast to rise 4.2 percent to 7.07 million in 2005, while new-home sales are expected to increase 7.1 percent to 1.29 million. Total housing starts -- single-family and multifamily -- should be up 4.5 percent, to 2.04 million units this year -- the best showing since 1973 -- and single-family starts are seen at a record of 1.70 million.

"Inflationary pressures -- driven by higher energy costs -- have become a concern, so we anticipate two more hikes in the fed funds rate by the end of the year. In addition, long-term interest rates also are rising at a faster clip," Lereah says. The 30-year fixed-rate mortgage is projected to reach 6.2 percent in the fourth quarter and trend up to 6.7 percent by the end of next year.

The national median existing-home price for all housing types is forecast to increase 12.5 percent in 2005 to $208,400, while the median new-home price should rise 3.9 percent to $229,700.

NAR President Al Mansell says some easing in home sales is expected in 2006. "The rise in mortgage interest rates is likely to have a slight braking action on the housing market, and the upside of that is it would help to bring the market closer to balance between home buyers and sellers," he adds. "As a result, there should be a cooling in the rate of price growth -- on balance, the overall market should continue to favor sellers with price appreciation remaining above the high end of historic norms. The investment fundamentals for housing remain solid."

In 2006, NAR expects the median existing-home price to grow by 5.2 percent and the median new-home price to rise 7.1 percent. Historic home-price gains are 1.5 percentage points above the rate of inflation, which is seen at 2.6 percent next year.

"Although energy prices are the chief culprit in current inflation concerns, we project oil prices to settle early next year -- that would cause inflation to quickly dissipate," Lereah said. The Consumer Price Index is forecast to rise 3.5 percent for all of 2005 before easing early next year.

Inflation-adjusted disposable personal income is expected to grow by 1.4 percent for 2005. The U.S. gross domestic product (GDP) is seen at 3.5 percent for all of 2005, with the GDP picking up early next year as hurricane rebuilding accelerates. The unemployment rate is projected to average 5.2 percent for the next three quarters, then decline to 5.0 percent in the second half of next year.

? 2005 FLORIDA ASSOCIATION OF REALTORS?

Your Access to Free Credit Reports
Topic: Credit Issues
A recent amendment to the federal Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies to provide you with a free copy of your credit report, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of information in the files of the nation’s consumer reporting companies. The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the FCRA with respect to consumer reporting companies.

A credit report contains information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home. There are three nationwide consumer reporting companies — Equifax, Experian, and Trans Union.

The three nationwide consumer reporting companies have set up one central website, toll-free telephone number, and mailing address through which you can order your free annual report. To order, click on , call 877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can print the form from . Do not contact the three nationwide consumer reporting companies individually. They are only providing free annual credit reports through www.annualcreditreport.com, 877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Florida continues to lead nation in job growth
ORLANDO, Fla.- Florida ranks first in the nation in job growth, with 251,800 jobs created during the year-over-year period ended in August. The state's 3.6 percent unemployment rate is considerably less than the national jobless rate.

Most Florida jobs were created in the professional and business services sector, leisure and hospitality sector and construction sector. The robust job market and low mortgage rates are partly responsible for the state's housing boom.

Though home sales in Central Florida appear to have peaked, experts believe ongoing job and population gains provide a safeguard against a market collapse. Sales are slowing down, however. During the 12 months ended in July, new-home sales slipped 22 percent in Orange County, 22 percent in Flagler County, 11 percent in Brevard County, 10 percent in Seminole County, 8 percent in both Osceola and Lake counties, and 5 percent in Volusia County.

Source: Charlotte Sun-Herald (FL) (09/23/05) Fishkind, Hank

New Energy Efficiency Laws
Topic: Energy Efficiency
Department of Energy (DOE) is requiring new residential air conditioners and heat pumps manufactured after Jan. 23, 2006 to operate at a 13 SEER (seasonal energy efficiency rating). The new standard is 30% more stringent than the current requirement for an energy efficiency rating of 10, which has been in effect since 1992.
The department made its decision last year, after the U.S. Court of Appeals for the Second Circuit rejected efforts of the Bush Administration to lower the new standard to a SEER 12.
With the support of the Air Conditioning & Refrigeration Institute(ARI), NAHB challenged the SEER 13 standard when it was first proposed by DOE at the start of 2001.
NAHB soundly objected to the higher SEER requirement at a public hearing, testifying that in most parts of the country, especially the northern states, the energy savings from the higher standard would never pay for the higher cost of the product, thus creating an undue burden on working families striving to afford to buy a home.
NAHB's efforts to overturn the proposed standard included additional meetings and letters to DOE arguing that entry-level home buyers would derive no value from the equipment upgrades if they could not afford their cost.
NAHB demonstrated that the efficiency increases could only be considered cost-effective in very specific parts of the country with certain climatic conditions. The association said that 75% of the consumers purchasing a 13 SEER would never realize sufficient cost savings in energy consumption over the life of the product to offset its higher price.
Major equipment manufacturers decided last March to retool the industry rather than mount another challenge to the DOE regulation, effectively bringing NAHB's fight against the SEER 13 requirement to an end.

Flood insurance program may need more funds
Topic: Insurance
WASHINGTON -- Sept. 2, 2005 -- Flood insurance claims from Hurricane Katrina will run into the billions of dollars and probably will require the federal flood insurance program to seek additional funds from the Treasury.
The National Flood Insurance Program is tentatively estimating 150,000 claims from areas of Louisiana, Mississippi, Alabama and Florida affected by the hurricane, said Ed Pasterick, a program analyst with the Federal Emergency Management Agency, which administers the program.
He said it was too early to predict what the final claim figure will be, but it is clear that the NFIP will need more than the $1.5 billion it is authorized to borrow from the Treasury.
Homeowners' policies cover water damage caused by rain, but flood damage, from rising surface waters, is generally available only through the NFIP.
The program, established by Congress in 1968, currently covers around 4.5 million policyholders in more than 20,000 communities located in flood plains and other low-lying areas.
Participation is based on agreements between local communities and the NFIP under which the program offers protection at lower than full-risk rates in exchange for commitments from the communities that they will carry out steps to reduce flood damage risks in new structures.
The program, generally financed by premiums, has paid $12.7 billion in flood insurance claims and related costs since 1969. In 2003 it awarded $601 million in flood claims.

Turtle Patrol Protests
Topic: Environmental
Bunnell - Turtle Patrol Volunteers staged a protest in front of the county courthouse. They were protesting the county's ban on all terrain vehicles being used to check turtle nesting sites. The demonstration was organized by the Flagler County Beach Environmental Preservation Council, and they carried signs reading: "Prosecute Perverts, not Turtle Patrol" and "Fight Drugs, not Turtles".Without their ATV's, patrol volunteers say they are unable to check the nesting sites in unincorporated Flagler Beach. They are allowed to use their ATV's within city limits. The volunteers say they need their ATV's because they have too much terrain to cover by foot and too much equipment to carry.
Volunteers have to check nests every day when hatchlings begin to emerge and help them to get through the sand to the sea. Other nests are made too close to the sea and have to be moved to higher ground until the turtles hatch.

Florida insurers consider options for covering hurricane wind damage
Topic: Insurance

TALLAHASSEE --The trade group representing Florida's insurance agents announced Tuesday it will study another avenue for covering hurricane wind damage in the state.
With insurers cutting their Florida exposure and state-backed Citizens Property Insurance Corp. levying a 6.8-percent assessment on home insurance policies, "it's time that we look for solutions that consider the needs of both insurers and consumers," said Jeff Grady, president of the Florida Association of Insurance Agents, in a written statement.
The agents association will pay for the study that will be led by Jay Newman, a former insurance commissioner in Virginia and the former executive director for Citizens who is now an adjunct professor at Florida State University. The study will look at whether Florida can create a vehicle to insure its windstorm risk that would be similar to the National Flood Insurance Program, the federally backed program that covers flood damage.
Anyone who buys flood insurance buys that coverage from an insurance agent or from an insurer, and files damage claims through their insurer. But the actual policy comes from the flood insurance program.
The association plans to have its study completed sometime in October, and plans to submit a copy to a state task force charged with crafting fixes to Florida's hurricane insurance market, said Scott Johnson, executive vice president of the Florida Association of Insurance Agents.
The Task Force on Long-Term Solutions for Florida's Hurricane Insurance Market will meet for the first time today in Tallahassee for an organizational session. The Legislature created the task force as part of its legislation passed in May to make changes to Florida's insurance industry.
Gov. Jeb Bush, Chief Financial Officer Tom Gallagher, Senate President Tom Lee and House Speaker Allan Bense each named three people to the task force. The group is required to deliver a report and recommendations to state leaders by April 1.
The group will likely have hearings in various parts of the state to get input from as many Floridians as possible, said Florida Insurance Commissioner Kevin McCarty, who will sit on the task force but will not be a voting member.
The task force will address a number of issues, from future demands on Florida's insurance industry to Citizens' operations and role in the state's insurance market.
Copyright ? 2005, South Florida Sun-Sentinel, Kathy Bushouse. Distributed by Knight Ridder/Tribune Business News.