Banks are again offering home equity loans.
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 difference will be the way the money is spent, says Frank Nothaft, chief economist at Freddie Mac. Most of it will go for necessary home improvements.
“Consumers are better at managing their own personal balance sheet as a result of the difficult recession we went through,” Nothaft says.
Source: Bloomberg, Kathleen M. Howley, Prashant Gopal, John Gittelsohn (03/11/2010)
© Copyright 2010 INFORMATION, INC. Bethesda, MD
Monday, March 15, 2010
Gov’t mortgage plan aids 16 percent of borrowers
The Obama administration’s mortgage relief plan has helped only about 16 percent of borrowers who signed up since its launch last year, while hundreds of thousands of homeowners remain in limbo.
The Treasury Department says that as of last month, about 170,000 homeowners had completed the application process and had their loan payments reduced permanently. That compares with nearly 1.1 million homeowners who have enrolled since the plan started.
The program is designed to lower borrowers’ monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years. To complete the process, homeowners need to make three payments and provide proof of their income, plus a letter documenting their financial hardship.
About 90,000 homeowners have dropped out so far.
Homeowners in two California metro areas – Los Angeles and Riverside – have received the most help, with a combined 18,000 homeowners receiving permanent modifications.
But only 3,900 borrowers in Las Vegas had completed the program, a dismal showing in a city hard-hit by the foreclosure crisis.
Many analysts have been warning for months that the majority of borrowers will not complete the process because they are found to be ineligible during the trial phase. Housing counselors complain that many homeowners are waiting many months for a decision.
Meg Reilly, a Treasury Department spokeswoman, said lenders are double-checking calculations on denied applications, and that has led to delays.
Nevertheless, dissatisfaction with the program is widespread. There have been behind-the-scenes talks in the nation’s capital about how to get it back on track.
The best solution, many analysts say, is an effort to reduce the outstanding balance for borrowers who owe far more on their homes than the properties are worth.
Copyright 2010 The Associated Press, Alan Zibel, AP real estate writer.
The Treasury Department says that as of last month, about 170,000 homeowners had completed the application process and had their loan payments reduced permanently. That compares with nearly 1.1 million homeowners who have enrolled since the plan started.
The program is designed to lower borrowers’ monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years. To complete the process, homeowners need to make three payments and provide proof of their income, plus a letter documenting their financial hardship.
About 90,000 homeowners have dropped out so far.
Homeowners in two California metro areas – Los Angeles and Riverside – have received the most help, with a combined 18,000 homeowners receiving permanent modifications.
But only 3,900 borrowers in Las Vegas had completed the program, a dismal showing in a city hard-hit by the foreclosure crisis.
Many analysts have been warning for months that the majority of borrowers will not complete the process because they are found to be ineligible during the trial phase. Housing counselors complain that many homeowners are waiting many months for a decision.
Meg Reilly, a Treasury Department spokeswoman, said lenders are double-checking calculations on denied applications, and that has led to delays.
Nevertheless, dissatisfaction with the program is widespread. There have been behind-the-scenes talks in the nation’s capital about how to get it back on track.
The best solution, many analysts say, is an effort to reduce the outstanding balance for borrowers who owe far more on their homes than the properties are worth.
Copyright 2010 The Associated Press, Alan Zibel, AP real estate writer.
Friday, March 12, 2010
Gov’t official warns on home downpayment hikes
The head of the Federal Housing Administration is warning that boosting the minimum downpayment borrowers must provide to qualify for home loans backed by the agency could threaten the housing market.
FHA commissioner David Stevens said at a House hearing Thursday that his agency would insure 300,000 fewer loans per year if the mandatory downpayment was hiked from the current level of 3.5 percent to 5 percent. That’s a 40 percent drop.
The result would a potential “double-dip in housing prices,” because fewer people would qualify for loans, Stevens told lawmakers.
The FHA does not make loans, but offers insurance against their default. It has been insuring roughly 30 percent of new loans, and is the largest backer of mortgages to first-time buyers.
The agency said in January it would raise fees and tighten lending standards to shore up its strapped finances in hopes of avoiding a taxpayer bailout. The government agency, which has faced rising losses from foreclosed homes, has seen its reserves sink below the minimum level required by Congress.
The agency, however, is facing pressure on both sides. Democrats fear that hiking standards too much will cut off many borrowers - particularly minorities - from being able to buy homes. Republicans, however, are pushing for even tighter standards than the agency has proposed - such as the 5 percent downpayment requirement.
“The question now is: Have we gone far enough?” said Rep Scott Garrett, R-N.J.
Under the proposed changes, many of which need to be approved by Congress, homebuyers would pay an upfront mortgage insurance premium of 2.25 percent of the total loan amount. That’s an increase from the current level of 1.75 percent. A borrower taking out a $200,000 mortgage would pay a $4,500 fee, for example, rather than the current fee of $3,500.
Credit score requirements also will be hiked. Many FHA lenders already require a higher score, but there had been no standard requirement across the program. Borrowers with a score lower than 580 now would need a downpayment of at least 10 percent.
Copyright © 2010 The Associated Press, Alan Zibel, AP real estate writer.
FHA commissioner David Stevens said at a House hearing Thursday that his agency would insure 300,000 fewer loans per year if the mandatory downpayment was hiked from the current level of 3.5 percent to 5 percent. That’s a 40 percent drop.
The result would a potential “double-dip in housing prices,” because fewer people would qualify for loans, Stevens told lawmakers.
The FHA does not make loans, but offers insurance against their default. It has been insuring roughly 30 percent of new loans, and is the largest backer of mortgages to first-time buyers.
The agency said in January it would raise fees and tighten lending standards to shore up its strapped finances in hopes of avoiding a taxpayer bailout. The government agency, which has faced rising losses from foreclosed homes, has seen its reserves sink below the minimum level required by Congress.
The agency, however, is facing pressure on both sides. Democrats fear that hiking standards too much will cut off many borrowers - particularly minorities - from being able to buy homes. Republicans, however, are pushing for even tighter standards than the agency has proposed - such as the 5 percent downpayment requirement.
“The question now is: Have we gone far enough?” said Rep Scott Garrett, R-N.J.
Under the proposed changes, many of which need to be approved by Congress, homebuyers would pay an upfront mortgage insurance premium of 2.25 percent of the total loan amount. That’s an increase from the current level of 1.75 percent. A borrower taking out a $200,000 mortgage would pay a $4,500 fee, for example, rather than the current fee of $3,500.
Credit score requirements also will be hiked. Many FHA lenders already require a higher score, but there had been no standard requirement across the program. Borrowers with a score lower than 580 now would need a downpayment of at least 10 percent.
Copyright © 2010 The Associated Press, Alan Zibel, AP real estate writer.
Government urges short sales, but experts aren’t sure they will help
With the highly touted federal mortgage-modification program falling short of its target numbers, the government has looked into alternatives to foreclosure and come up with a possible, though not original, solution: The short sale, a transaction in which the lender accepts less than the balance owed on the mortgage.
Beginning April 5, under new Treasury Department rules, short sales will be presented as the potential next step for homeowners who are rejected by or fail to make the grade for the federal Home Affordable Modification Program (HAMP).
RealtyTrac chief economist Rick Sharga suggested that offering the short-sale program is the administration’s acknowledgment that its current mortgage-modification effort “can’t solve the foreclosure problem by itself.”
Kevin Gillen, vice president of Econsult of Philadelphia, said there was both statistical and anecdotal evidence that lenders have been holding off on foreclosure proceedings. “No doubt that part of this is due to staff shortages relative to the volume of delinquencies, but it’s also due to uncertainty over near-term government policy,” he said.
Sharga sees positive elements in the new guidelines: Both homeowners and mortgage servicers will have financial incentive to participate in short sales; there are limited payouts for second lienholders, “and paperwork is standardized, which makes it easier for everyone to comply.”
The new Home Affordable Foreclosure Alternative program will run until Dec. 31, 2012. Among its provisions:
• The lender must offer a short sale in writing to the borrower within 30 days after the borrower either is ruled ineligible for mortgage modification under the HAMP program or has been ruled unable to sustain payments under a trial plan.
• A borrower may receive up to $1,500 to assist with relocation expenses.
• Incentives of $1,000 will be offered to lenders for each completed short sale. For each deed in lieu of foreclosure, in which the borrower voluntarily transfers the property to the lender, $1,000 will be paid to the lender.
• A lender with a second lien on the property will get up to $3,000 of the short-sale proceeds, or can pursue a short sale outside the program if it doesn’t agree to share.
• The lender will not be permitted to reduce the real estate agent’s commission after an offer on a property has been received.
Currently, short sales don’t make up a big piece of the real estate market, either regionally or nationwide, for a variety of reasons. One is they tend to be difficult and time-consuming.
“I handled a short sale of a condo in Bensalem (Pa.) that took a year,” said real estate broker Christopher J. Artur. Typically, there is “so much aggravation and red tape involved that some buyers get so fed up they walk away.”
Nationally, just 14 percent of all existing-home transactions in January were short sales, the National Association of Realtors says. In the Philadelphia region, they made up 6.9 percent of total homes for sale at the end of January, said Art Herling, regional vice president at Long & Foster Real Estate.
“I call short sales ‘organized chaos,’ “ said Noelle Barbone, office manager of Weichert Realtors’ Media office. Each lender works short sales differently, “at their own pace, and it depends on how behind (the homeowners) are on mortgage payments, if the house is worth less than they owe, and whether or not foreclosure paperwork has been filed.”
The new program is unlikely to make short sales easier, even as an alternative to foreclosure. “What one needs in a short sale is time,” Barbone said.
But these days, as buyers race to meet the April 30 agreement-of-sale deadline for the federal tax credit, time is money.
“I had first-time buyers this weekend with 20 percent down, and we found two houses they liked,” said Cheryl Miller of Long & Foster’s Blue Bell office. Both were short sales, however, and neither the seller nor the agent could give a definite timeline for even seeing an executed agreement of sale, she said.
“Timing is pretty critical for the first-time buyer, and viable houses that are short sales are remaining unsold” as a result, Miller said.
Sharga doesn’t think the new short-sale program will be the answer the government seeks. “While we’ll likely see an increase in the number of short sales, I doubt that the reality will live up to the hype.”
Copyright © 2010 The Philadelphia Inquirer; distributed by McClatchy-Tribune Information Services
Beginning April 5, under new Treasury Department rules, short sales will be presented as the potential next step for homeowners who are rejected by or fail to make the grade for the federal Home Affordable Modification Program (HAMP).
RealtyTrac chief economist Rick Sharga suggested that offering the short-sale program is the administration’s acknowledgment that its current mortgage-modification effort “can’t solve the foreclosure problem by itself.”
Kevin Gillen, vice president of Econsult of Philadelphia, said there was both statistical and anecdotal evidence that lenders have been holding off on foreclosure proceedings. “No doubt that part of this is due to staff shortages relative to the volume of delinquencies, but it’s also due to uncertainty over near-term government policy,” he said.
Sharga sees positive elements in the new guidelines: Both homeowners and mortgage servicers will have financial incentive to participate in short sales; there are limited payouts for second lienholders, “and paperwork is standardized, which makes it easier for everyone to comply.”
The new Home Affordable Foreclosure Alternative program will run until Dec. 31, 2012. Among its provisions:
• The lender must offer a short sale in writing to the borrower within 30 days after the borrower either is ruled ineligible for mortgage modification under the HAMP program or has been ruled unable to sustain payments under a trial plan.
• A borrower may receive up to $1,500 to assist with relocation expenses.
• Incentives of $1,000 will be offered to lenders for each completed short sale. For each deed in lieu of foreclosure, in which the borrower voluntarily transfers the property to the lender, $1,000 will be paid to the lender.
• A lender with a second lien on the property will get up to $3,000 of the short-sale proceeds, or can pursue a short sale outside the program if it doesn’t agree to share.
• The lender will not be permitted to reduce the real estate agent’s commission after an offer on a property has been received.
Currently, short sales don’t make up a big piece of the real estate market, either regionally or nationwide, for a variety of reasons. One is they tend to be difficult and time-consuming.
“I handled a short sale of a condo in Bensalem (Pa.) that took a year,” said real estate broker Christopher J. Artur. Typically, there is “so much aggravation and red tape involved that some buyers get so fed up they walk away.”
Nationally, just 14 percent of all existing-home transactions in January were short sales, the National Association of Realtors says. In the Philadelphia region, they made up 6.9 percent of total homes for sale at the end of January, said Art Herling, regional vice president at Long & Foster Real Estate.
“I call short sales ‘organized chaos,’ “ said Noelle Barbone, office manager of Weichert Realtors’ Media office. Each lender works short sales differently, “at their own pace, and it depends on how behind (the homeowners) are on mortgage payments, if the house is worth less than they owe, and whether or not foreclosure paperwork has been filed.”
The new program is unlikely to make short sales easier, even as an alternative to foreclosure. “What one needs in a short sale is time,” Barbone said.
But these days, as buyers race to meet the April 30 agreement-of-sale deadline for the federal tax credit, time is money.
“I had first-time buyers this weekend with 20 percent down, and we found two houses they liked,” said Cheryl Miller of Long & Foster’s Blue Bell office. Both were short sales, however, and neither the seller nor the agent could give a definite timeline for even seeing an executed agreement of sale, she said.
“Timing is pretty critical for the first-time buyer, and viable houses that are short sales are remaining unsold” as a result, Miller said.
Sharga doesn’t think the new short-sale program will be the answer the government seeks. “While we’ll likely see an increase in the number of short sales, I doubt that the reality will live up to the hype.”
Copyright © 2010 The Philadelphia Inquirer; distributed by McClatchy-Tribune Information Services
Property insurance hot topic in Legislature
A bill that would let property insurance companies pay claims in installments to make sure homeowners are actually using the money for repairs and make other changes survived its first committee vote Wednesday after efforts to change the bill were unsuccessful.
Property insurers say the measure (SB 2044) approved 7-3 by the Senate Banking and Insurance Committee is necessary for their survival.
The bill would allow insurers to withhold up to 50 percent of payments for roof replacements, structural repairs and the loss of personal property. Companies must now pay 100 percent of replacement costs upfront, a procedure insurers say raises costs because some homeowners receive the money but don’t have the work done.
The bill also allows insurance companies to raise rates up to 10 percent to account for inflation and other factors determined by the Office of Insurance Regulation without having to receive OIR’s approval.
Lawmakers have been trying to give the industry more autonomy in rate making, complaining the agency has been too tight-fisted in its approach to rates that company officials say are artificially low and inadequate to allow them to raise the surpluses they need in advance of a storm.
Critics say the measure makes too many concessions to the insurance industry and would prevent homeowners of moderate means and credit access from completely replacing their belongings. Opponents also don’t buy the argument that the changes are needed to prevent an industry-wide meltdown.
“This is a freight train heading for consumers,” Waldo Faura Sr. a community activist with Miami-based Floridians in Action, which works for lower insurance rates, said in testimony Wednesday.
Others complained that it changes rules on policies already in place.
“People were given a policy and told what (insurers) would do if they had a claim,” said Sen. Mike Fasano, R-New Port Richey, who voted against the bill. “Under this, that would no longer be the case.”
Committee chairman Sen. Garrett Richter, R-Naples, said reducing private insurers’ costs would ultimately translate into more stable rates for policyholders. Richter called inaccurate claims that insurance companies would somehow be off the hook for replacement cost repayments. Timing of the payment is the only change.
“In no way does this bill present barriers for consumers,” Richter said.
Industry representatives say lawmakers went too far after the 2004/2005 hurricane seasons to ensure policyholders got their money quickly. In 2005, lawmakers prevented companies from holding back any reimbursement amount. The result, they contend, is that some homeowners don’t use the home repair check to pay for home repairs.
“We know that there are items that will not be replaced,” said Mark Delegal, a lobbyist for State Farm, who cited “Barney the Dinosaur” videotapes as items a homeowner may not want to replace as the kids head off to college.
The bill now travels to the Senate General Government Appropriations Committee. There is currently no House companion.
Source: News Service of Florida, Michael Peltier.
Property insurers say the measure (SB 2044) approved 7-3 by the Senate Banking and Insurance Committee is necessary for their survival.
The bill would allow insurers to withhold up to 50 percent of payments for roof replacements, structural repairs and the loss of personal property. Companies must now pay 100 percent of replacement costs upfront, a procedure insurers say raises costs because some homeowners receive the money but don’t have the work done.
The bill also allows insurance companies to raise rates up to 10 percent to account for inflation and other factors determined by the Office of Insurance Regulation without having to receive OIR’s approval.
Lawmakers have been trying to give the industry more autonomy in rate making, complaining the agency has been too tight-fisted in its approach to rates that company officials say are artificially low and inadequate to allow them to raise the surpluses they need in advance of a storm.
Critics say the measure makes too many concessions to the insurance industry and would prevent homeowners of moderate means and credit access from completely replacing their belongings. Opponents also don’t buy the argument that the changes are needed to prevent an industry-wide meltdown.
“This is a freight train heading for consumers,” Waldo Faura Sr. a community activist with Miami-based Floridians in Action, which works for lower insurance rates, said in testimony Wednesday.
Others complained that it changes rules on policies already in place.
“People were given a policy and told what (insurers) would do if they had a claim,” said Sen. Mike Fasano, R-New Port Richey, who voted against the bill. “Under this, that would no longer be the case.”
Committee chairman Sen. Garrett Richter, R-Naples, said reducing private insurers’ costs would ultimately translate into more stable rates for policyholders. Richter called inaccurate claims that insurance companies would somehow be off the hook for replacement cost repayments. Timing of the payment is the only change.
“In no way does this bill present barriers for consumers,” Richter said.
Industry representatives say lawmakers went too far after the 2004/2005 hurricane seasons to ensure policyholders got their money quickly. In 2005, lawmakers prevented companies from holding back any reimbursement amount. The result, they contend, is that some homeowners don’t use the home repair check to pay for home repairs.
“We know that there are items that will not be replaced,” said Mark Delegal, a lobbyist for State Farm, who cited “Barney the Dinosaur” videotapes as items a homeowner may not want to replace as the kids head off to college.
The bill now travels to the Senate General Government Appropriations Committee. There is currently no House companion.
Source: News Service of Florida, Michael Peltier.
Foreclosure rates up by smallest amount in 4 years
The foreclosure crisis isn’t over, but the pace of growth may finally be slowing down.
RealtyTrac Inc. said Thursday that the number of U.S. households facing foreclosure in February grew 6 percent from the year-ago level, the smallest annual increase in four years.
More than 308,000 households, or one in every 418 homes, received a foreclosure-related notice, the Irvine, Calif.-based foreclosure listings company reported. That was down more than 2 percent from January
Still, fears remain about the hundreds of thousands of homeowners who are still being evaluated for help under loan modification programs. Many analysts say most of those borrowers will eventually lose their homes, sparking a new round of foreclosures later this year.
“It’s premature to declare victory just yet,” said Rick Sharga, a senior vice president for RealtyTrac. He did, however, allow that, “If this is the beginning of a slowdown in growth rates, that would be a good thing.”
Banks repossessed nearly 79,000 homes last month, down 10 percent from January but still up 6 percent from February 2009.
The RealtyTrac report follows an encouraging report last month from the Mortgage Bankers Association. It said the percentage of borrowers who had missed just one payment on their home loans fell to 3.6 percent in the October to December quarter, down from 3.8 percent in the third quarter.
While that was a surprising piece of positive news, foreclosures were still at record high levels. The number of borrowers who have either missed a payment or are in foreclosure was at 15 percent.
A record 2.8 million households were threatened with foreclosure last year, RealtyTrac said, and the number is expected to rise to more than 3 million homes this year.
The foreclosure crisis forced the federal government and several states to come up with plans to prolong the process so delinquent borrowers can try to find help. But those efforts have barely dented the problem. Case in point: The Obama administration’s $75 billion foreclosure prevention program has helped only 116,300 homeowners in the past year.
Foreclosed homes are typically sold at steep discounts, lowering the value of surrounding properties. Cities lose property tax dollars from homes that sit empty and lower property values.
Economic woes, such as unemployment or reduced income, are expected to be the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.
Among states, Nevada posted the nation’s highest foreclosure rate, though foreclosures there were down 7 percent from January and down more than 30 percent from a year earlier. It was followed by Arizona, Florida, California and Michigan. Rounding out the top 10 were Utah, Idaho, Illinois, Georgia and Maryland.
The metro area with the highest foreclosure rate in February was Las Vegas. Though one in every 90 homes there received a foreclosure filing, foreclosures were down 9 percent from a month earlier. Foreclosures in the No. 2 metropolitan area, the Cape Coral-Fort Myers area in Florida, were up 31 percent from a month earlier.
Also topping the list of foreclosure hot spots were the California metro areas of Modesto, Riverside-San Bernardino-Ontario and Stockton.
Copyright © 2010 The Associated Press, Alan Zibel, AP real estate writer
RealtyTrac Inc. said Thursday that the number of U.S. households facing foreclosure in February grew 6 percent from the year-ago level, the smallest annual increase in four years.
More than 308,000 households, or one in every 418 homes, received a foreclosure-related notice, the Irvine, Calif.-based foreclosure listings company reported. That was down more than 2 percent from January
Still, fears remain about the hundreds of thousands of homeowners who are still being evaluated for help under loan modification programs. Many analysts say most of those borrowers will eventually lose their homes, sparking a new round of foreclosures later this year.
“It’s premature to declare victory just yet,” said Rick Sharga, a senior vice president for RealtyTrac. He did, however, allow that, “If this is the beginning of a slowdown in growth rates, that would be a good thing.”
Banks repossessed nearly 79,000 homes last month, down 10 percent from January but still up 6 percent from February 2009.
The RealtyTrac report follows an encouraging report last month from the Mortgage Bankers Association. It said the percentage of borrowers who had missed just one payment on their home loans fell to 3.6 percent in the October to December quarter, down from 3.8 percent in the third quarter.
While that was a surprising piece of positive news, foreclosures were still at record high levels. The number of borrowers who have either missed a payment or are in foreclosure was at 15 percent.
A record 2.8 million households were threatened with foreclosure last year, RealtyTrac said, and the number is expected to rise to more than 3 million homes this year.
The foreclosure crisis forced the federal government and several states to come up with plans to prolong the process so delinquent borrowers can try to find help. But those efforts have barely dented the problem. Case in point: The Obama administration’s $75 billion foreclosure prevention program has helped only 116,300 homeowners in the past year.
Foreclosed homes are typically sold at steep discounts, lowering the value of surrounding properties. Cities lose property tax dollars from homes that sit empty and lower property values.
Economic woes, such as unemployment or reduced income, are expected to be the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.
Among states, Nevada posted the nation’s highest foreclosure rate, though foreclosures there were down 7 percent from January and down more than 30 percent from a year earlier. It was followed by Arizona, Florida, California and Michigan. Rounding out the top 10 were Utah, Idaho, Illinois, Georgia and Maryland.
The metro area with the highest foreclosure rate in February was Las Vegas. Though one in every 90 homes there received a foreclosure filing, foreclosures were down 9 percent from a month earlier. Foreclosures in the No. 2 metropolitan area, the Cape Coral-Fort Myers area in Florida, were up 31 percent from a month earlier.
Also topping the list of foreclosure hot spots were the California metro areas of Modesto, Riverside-San Bernardino-Ontario and Stockton.
Copyright © 2010 The Associated Press, Alan Zibel, AP real estate writer
Wednesday, March 10, 2010
Sink calls for report on Fla. insurers
Florida Chief Financial Officer Alex Sink has called upon State Insurance Commissioner Kevin McCarty to take a public account of the state’s property insurers’ financial status at a cabinet meeting on March 23.
“Florida’s homeowners and policyholders deserve nothing less than accurate information about the protection they’ve been paying for, especially as we head into hurricane season,” Sink wrote in a letter to McCarty. She notes that Florida insurers have posted financial losses and some others are failing, even though the state has not been hit by a hurricane.
The request from Sink follows a Sarasota Herald Tribune report that the insurers that exhibiting signs of financial distress cover more than 2 million Florida families. The Florida Office of Insurance Regulation is currently collecting and examining 2009 year-end financial statements from Florida’s insurers and has previously conducted spot audits of smaller insurers.
Meanwhile, Florida Senate Insurance Committee Chair Garrett Richter supports legislation under consideration to raise minimum capital requirements for Florida insurers from $4 million to $15 million.
Source: Sarasota Herald-Tribune (FL) (03/10/10) P. 1A; St. John, Paige
© 2010 Florida Realtors®
“Florida’s homeowners and policyholders deserve nothing less than accurate information about the protection they’ve been paying for, especially as we head into hurricane season,” Sink wrote in a letter to McCarty. She notes that Florida insurers have posted financial losses and some others are failing, even though the state has not been hit by a hurricane.
The request from Sink follows a Sarasota Herald Tribune report that the insurers that exhibiting signs of financial distress cover more than 2 million Florida families. The Florida Office of Insurance Regulation is currently collecting and examining 2009 year-end financial statements from Florida’s insurers and has previously conducted spot audits of smaller insurers.
Meanwhile, Florida Senate Insurance Committee Chair Garrett Richter supports legislation under consideration to raise minimum capital requirements for Florida insurers from $4 million to $15 million.
Source: Sarasota Herald-Tribune (FL) (03/10/10) P. 1A; St. John, Paige
© 2010 Florida Realtors®
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