The financial plight of the nation’s 34 million renters has deteriorated rapidly since the beginning of the decade, yet they are rarely included in conversations about housing affordability.
Research shows 50 percent of all renters now spend at least 30 percent of their before-tax income on rent and utility payments. That’s up from about 40 percent in 2000, according to an analysis by the Associated Press. One in four shell out more than half of their income to cover those expenses, up from one in five.
And the AP’s analysis of census data through 2007, the latest available, doesn’t include the effects of the recession, which hammer renters harder than homeowners. Tough economic times also disproportionately affect minorities and the less educated – both groups are more likely to be financially burdened renters.
“In the next year or so, we’re going to see growing numbers of people who are literally homeless because they can’t afford their own home,” said Sheila Crowley, the president and CEO of the National Low Income Housing Coalition.
The median rent, including utilities, rose 7 percent to $775 between 2000 and 2007. But the increase felt worse because renters saw their median income drop 7 percent to $29,000 during that time.
After paying the landlord, what’s left for severely cost-burdened renters is a scant amount for the other basics of living like food, health care and clothing. Forget luxuries like transportation, retirement accounts, let alone a downpayment on a house.
“They sacrifice basic household stuff you and I take for granted like hygiene products and detergent. Money for laundry,” said Cicely Dove, the director family housing at Crossroads, an emergency housing shelter in Providence, R.I.
Government funding for renter assistance has been stagnant since 2000. At the same time, the number of affordable apartments has been shrinking and the cost of building new ones rarely pencils out.
During the past six years, about 3 million affordable apartments were destroyed, converted to for-sale condos or upgraded to higher-priced rental units, according to census data released this week.
The waiting lists for Housing Choice vouchers, formerly known as Section 8, are years long in many cities. The program currently serves 2 million families. Renters in this program put 30 percent of their income to rent and the voucher makes up the difference. As the economy worsens, voucher recipients are contributing less money. The program must make up the difference, which means reducing the number of new recipients, said Donna White, spokeswoman at the Housing and Urban Development Department. Fewer are moving onto self-sufficiency too, White said.
The federal Low Income Housing Tax Credit, which encourages developers to build affordable housing, has little funding because investors who buy these tax credits have disappeared, said Eric Belsky, executive director of Harvard University’s Joint Center for Housing Studies.
The National Housing Trust Fund created last July to increase the supply of affordable housing remains empty. Funds were supposed to come from Fannie Mae and Freddie Mac, but the government seized control of the companies five weeks later and has so far pumped $85 billion into them to keep them afloat.
“The problems here are costly to address. We’re going to see it get worse and create more hardships with renters spending less on pensions, savings and health care,” Belsky said. “These things cost us down the road.”
Hints of hope, however, are emerging as the country moves away from the homeownership mantra and recasts its housing priorities. President Barack Obama’s recent budget includes $1 billion for the National Housing Trust Fund and another $1.6 billion for 200,000 new housing vouchers.
But housing experts say that is nowhere enough to make a dent in the problem:
Sixty percent of single parents and senior citizens who rent spend at least 30 percent of their income on housing costs, while a third pay at least half.
Blacks and Hispanics face similar challenges. The unemployment rates for blacks and Hispanics are both outpacing the national rate and 30 percent of black renters and 27 percent of Hispanic renters spend half or more of their income on housing. This is happening at the same time that the foreclosure crisis batters these two groups the most.
Indiana is the least affordable for black renters, where 43 percent pay at least half their income to housing expenses. And a third of Hispanic renters in Massachusetts spend 50 percent of their income on rent and utilities, the worst showing in the country for Hispanics.
The least affordable areas for renters are the Deep South, the once red-hot housing states like California and Florida, and the beleaguered Midwest manufacturing states. But places like Hawaii and Vermont also rank high on the list.
Now the recession adds another obstacle.
The unemployment rate shot up to a 25-year high of 9.4 percent in May, but that percentage is even higher for those without a high school degree – almost 16 percent – and who are more likely to be renters. They predominantly work in service industries, clearing restaurant tables, cleaning homes and offices and taking care of children and elderly parents.
“We’re talking about the person who makes your latte in the morning,” said Crowley of the National Low Income Housing Coalition.
People cope with these housing situations by crowding in with family or friends or living in substandard housing or in dangerous neighborhoods. Others flock to shelters, and, in the worst cases, they sleep on the streets. For those who strain to make the rent, they are often one medical bill or car repair away from homelessness.
If affordability issues facing renters aren’t addressed, there will be social and economic consequences. Children of low-income renters who are forced to move multiple times usually fall behind in school, and later replace their parents as low-income renters. These renters will drag the nation as it faces other costly issues like Social Security, health care, ongoing wars and repairing a broken economy.
“In the long run, a society that doesn’t attend to fundamental human needs won’t succeed,” Crowley said.
We all have a stake in it.
Source AP
Monday, June 29, 2009
Tuesday, June 23, 2009
Florida’s existing home, condo sales up in May 2009
June 23, 2009 – Florida’s existing home sales rose in May – the ninth month in a row that sales activity increased in the year-to-year comparison, according to the latest housin May existing-home sales continue rising trend, says NAR
g data released by the Florida Association of Realtors® (FAR). Statewide sales showed gains over the previous month’s sales level in both the existing home and existing condominium markets. Also, for the first time in many months, the statewide median sales price in May for existing homes and for existing condos rose over the previous month’s figure.
Existing home sales rose 16 percent last month with a total of 13,921 homes sold statewide compared to 12,044 homes sold in May 2008, according to FAR. Statewide existing home sales in May increased 6.2 percent over April’s statewide activity. Florida Realtors also reported a 21 percent rise in statewide sales of existing condos in May; existing condo sales last month rose 3.8 percent over the total units sold in April.
“The improving sales of existing single family homes and condos is a trend we have been seeing for several months in Florida. What is new in this month’s data release is that we are seeing evidence of prices beginning to firm,” says Dr. Sean Snaith, director for the University of Central Florida’s Institute for Economic Competitiveness. “While one month of data does not a trend make, it is the first green shoot we have seen in some time as far as prices are concerned. Until prices stop declining, we cannot state with confidence that the housing market has stabilized. Sales have risen to levels we have not seen since 2006, though the economy still faces headwinds. As credit markets begin to thaw this will help speed along this process of recovery in the housing market.”
Thirteen of Florida's metropolitan statistical areas (MSAs) reported increased existing-home sales in May and 13 MSAs also showed gains in condo sales. A majority of the state's MSAs have reported increased sales for 11 consecutive months.
Florida’s median sales price for existing homes last month was $144,400; a year ago, it was $203,800 for a 29 percent decrease. However, the statewide existing home median price in May was higher than the statewide median price reported in each of the previous four months. According to housing industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to lower the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in April 2009 was $169,800, down 14.9 percent from a year earlier, according to NAR. In California, the statewide median resales price was $256,700 in April; in Massachusetts, it was $275,000; in Maryland, it was $255,587; and in New York, it was $185,000.
According to NAR’s latest housing industry outlook, buyers are responding to favorable market conditions. “The $8,000 first-time buyer tax credit is beginning to impact the market,” said NAR Chief Economist Lawrence Yun. “Since first-time buyers must finalize their purchase by Nov. 30 to get the credit, we expect greater activity in the months ahead and that should spark more sales by repeat buyers.” Many homebuyers are taking advantage of the bargain prices offered on foreclosed listings in states like Florida, California and Nevada, Yun noted, which should “set the stage for healthy market conditions going forward.”
In Florida’s year-to-year comparison for condos, 4,839 units sold statewide compared to 3,998 units in May 2008 for a 21 percent increase. The statewide existing condo median sales price last month was $113,400; in May 2008 it was $181,700 for a 38 percent decrease. May’s statewide existing condo median price was the same as January’s statewide median, and was higher than the median reported in February, March or April. The national median existing condo price was $173,900 in April 2009, according to NAR.
Interest rates for a 30-year fixed-rate mortgage averaged 4.86 percent last month, down significantly from the average rate of 6.04 percent in May 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s smaller markets, the Melbourne-Titusville-Palm Bay MSA reported a total of 584 homes sold in May compared to 491 homes a year ago for a 19 percent increase. The existing home median sales price was $123,700; a year ago, it was $163,100 for a 24 percent decrease. In the year-to-year comparison for the existing condo market, 123 units sold in the MSA last month, up 6 percent compared to 116 condos sold the previous May. The market’s existing condo median price last month was $134,400; a year earlier, it was $144,300 for a 7 percent decrease.
© 2009 FLORIDA ASSOCIATION OF REALTORS
g data released by the Florida Association of Realtors® (FAR). Statewide sales showed gains over the previous month’s sales level in both the existing home and existing condominium markets. Also, for the first time in many months, the statewide median sales price in May for existing homes and for existing condos rose over the previous month’s figure.
Existing home sales rose 16 percent last month with a total of 13,921 homes sold statewide compared to 12,044 homes sold in May 2008, according to FAR. Statewide existing home sales in May increased 6.2 percent over April’s statewide activity. Florida Realtors also reported a 21 percent rise in statewide sales of existing condos in May; existing condo sales last month rose 3.8 percent over the total units sold in April.
“The improving sales of existing single family homes and condos is a trend we have been seeing for several months in Florida. What is new in this month’s data release is that we are seeing evidence of prices beginning to firm,” says Dr. Sean Snaith, director for the University of Central Florida’s Institute for Economic Competitiveness. “While one month of data does not a trend make, it is the first green shoot we have seen in some time as far as prices are concerned. Until prices stop declining, we cannot state with confidence that the housing market has stabilized. Sales have risen to levels we have not seen since 2006, though the economy still faces headwinds. As credit markets begin to thaw this will help speed along this process of recovery in the housing market.”
Thirteen of Florida's metropolitan statistical areas (MSAs) reported increased existing-home sales in May and 13 MSAs also showed gains in condo sales. A majority of the state's MSAs have reported increased sales for 11 consecutive months.
Florida’s median sales price for existing homes last month was $144,400; a year ago, it was $203,800 for a 29 percent decrease. However, the statewide existing home median price in May was higher than the statewide median price reported in each of the previous four months. According to housing industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to lower the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in April 2009 was $169,800, down 14.9 percent from a year earlier, according to NAR. In California, the statewide median resales price was $256,700 in April; in Massachusetts, it was $275,000; in Maryland, it was $255,587; and in New York, it was $185,000.
According to NAR’s latest housing industry outlook, buyers are responding to favorable market conditions. “The $8,000 first-time buyer tax credit is beginning to impact the market,” said NAR Chief Economist Lawrence Yun. “Since first-time buyers must finalize their purchase by Nov. 30 to get the credit, we expect greater activity in the months ahead and that should spark more sales by repeat buyers.” Many homebuyers are taking advantage of the bargain prices offered on foreclosed listings in states like Florida, California and Nevada, Yun noted, which should “set the stage for healthy market conditions going forward.”
In Florida’s year-to-year comparison for condos, 4,839 units sold statewide compared to 3,998 units in May 2008 for a 21 percent increase. The statewide existing condo median sales price last month was $113,400; in May 2008 it was $181,700 for a 38 percent decrease. May’s statewide existing condo median price was the same as January’s statewide median, and was higher than the median reported in February, March or April. The national median existing condo price was $173,900 in April 2009, according to NAR.
Interest rates for a 30-year fixed-rate mortgage averaged 4.86 percent last month, down significantly from the average rate of 6.04 percent in May 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s smaller markets, the Melbourne-Titusville-Palm Bay MSA reported a total of 584 homes sold in May compared to 491 homes a year ago for a 19 percent increase. The existing home median sales price was $123,700; a year ago, it was $163,100 for a 24 percent decrease. In the year-to-year comparison for the existing condo market, 123 units sold in the MSA last month, up 6 percent compared to 116 condos sold the previous May. The market’s existing condo median price last month was $134,400; a year earlier, it was $144,300 for a 7 percent decrease.
© 2009 FLORIDA ASSOCIATION OF REALTORS
Wednesday, June 17, 2009
Chinese drywall lawsuits to be heard in New Orleans
Florida lost the fight for venue, and the U.S. District Court for the Eastern District of Louisiana will consolidate cases from around the nation, according to an order issued Monday by the Judicial Panel on Multidistrict Litigation (JPML). The order applies to pending and future cases.
JPML overrode Florida requests for venue based on the experience of Louisiana judge who would hear the case, Judge Eldon E. Fallon. Florida officials argued that the state had the highest number of Chinese drywall cases; therefore, it made sense to hold the trial in the Sunshine State. But the judge has experience in large-scale litigation, and recently oversaw a case involving the drug Vioxx.
The order immediately moves 10 lawsuits in Florida, Louisiana and Ohio to New Orleans. An additional 67 cases might also be included, and website Law.com estimates that as many as 1,000 cases may eventually be part of it.
“I really wish (the litigation) stayed in Florida,” says Kristin Culliton, a Florida homeowner and lead plaintiff in one of the cases now moving to New Orleans. “(This is) where most of us are. It’s where it all began and where it belonged.”
Multidistrict litigation (MDL) puts all cases under a single judge to make the process easier. It seeks to avoid inconsistent rulings, conserve the parties’ resources, and save time for the court and witnesses.
So far, 18 states have reported Chinese drywall problems, in which ingredients used to make the drywall give off a sulfur smell and damage metal, such as air conditioning coils. A study last month by the Environmental Protection Agency (EPA) found a higher level of sulfur in Chinese manufactured drywall, along with two organic compounds usually found in acrylic paint. None of those ingredients is found in American-made drywall.
The EPA did not, however, rule on whether those compounds can harm metal pipes or people.
Source: Newsinferno.com
JPML overrode Florida requests for venue based on the experience of Louisiana judge who would hear the case, Judge Eldon E. Fallon. Florida officials argued that the state had the highest number of Chinese drywall cases; therefore, it made sense to hold the trial in the Sunshine State. But the judge has experience in large-scale litigation, and recently oversaw a case involving the drug Vioxx.
The order immediately moves 10 lawsuits in Florida, Louisiana and Ohio to New Orleans. An additional 67 cases might also be included, and website Law.com estimates that as many as 1,000 cases may eventually be part of it.
“I really wish (the litigation) stayed in Florida,” says Kristin Culliton, a Florida homeowner and lead plaintiff in one of the cases now moving to New Orleans. “(This is) where most of us are. It’s where it all began and where it belonged.”
Multidistrict litigation (MDL) puts all cases under a single judge to make the process easier. It seeks to avoid inconsistent rulings, conserve the parties’ resources, and save time for the court and witnesses.
So far, 18 states have reported Chinese drywall problems, in which ingredients used to make the drywall give off a sulfur smell and damage metal, such as air conditioning coils. A study last month by the Environmental Protection Agency (EPA) found a higher level of sulfur in Chinese manufactured drywall, along with two organic compounds usually found in acrylic paint. None of those ingredients is found in American-made drywall.
The EPA did not, however, rule on whether those compounds can harm metal pipes or people.
Source: Newsinferno.com
Monday, June 15, 2009
Renegotiating home loan requires patience, prep work
If you know you’re headed for trouble with your mortgage or you already are there, brace yourself.
It’s a mess for borrowers trying to renegotiate the terms of their mortgages right now. That’s despite a highly publicized, $75 billion, Obama administration program that pays lenders to modify loans.
If you need to get a new deal on your mortgage – as millions of people do – the best thing you can do is to arm yourself with information, about the problems you’ll face and what you can do to get around them.
“People are confused,” said Kevin Walker, president and chief executive of MortgageReport.com, a new website that helps borrowers learn whether they are eligible for loan modifications. “Frankly, lenders are still trying to figure out the procedures they’re supposed to follow to implement these programs.”
Not many loans are being modified under the Making Home Affordable program, which was announced in February.
By mid-May, the Treasury Department reported the program had resulted in 55,000 loan modifications so far.
Lenders can modify loans on their own, not using the program. Hope Now, an industry coalition trying to combat the flood of foreclosures nationwide, said its members had independently modified 127,000 loans in April and made 143,000 new repayment plans, a record number.
But even those figures combined are a drop in the bucket against the Obama program’s stated goal of helping as many as 9 million homeowners refinance or modify their loans.
Nothing has turned back the tidal wave of foreclosures. About 1 million new foreclosures were filed in the nation between January and the end of May, the Center for Responsible Lending estimated. Moody’s Economy.com expects 1.54 million new foreclosures this year, after 1.44 million foreclosures last year.
In South Florida, Allen Robinson, managing partner of First Trust Mortgage Corp., said lenders don’t seem interested in drastically altering mortgages. They aren’t reducing the principal owed, he said, but are cutting rates or extending terms.
And there’s the problem of loan servicers handling a flood of applications. Jessica Cecere of the Consumer Credit Counseling Service of Palm Beach said she thinks fewer than 2 percent of loans are being modified.
Lenders say they’re trying to keep up with the demand, but the number of troubled borrowers is huge and still growing. In April, almost 3 million home loans nationwide were 60 days or more delinquent, according to the Hope Now alliance.
“The pipeline of people requesting loan modifications has grown tremendously since March,” said JP Morgan Chase spokeswoman Nancy Norris.
Chase has opened five offices in Florida, including one in Aventura and one in Miami, devoted only to loan modifications. Norris said Chase can modify loans from Chase, Washington Mutual and a small lender named EMC. Those loan offices are open evenings and weekends.
Wells Fargo, which owns Wachovia, has put details of the program on a website, www.wellsfargo.com/homeassist.
What can you do if you need to rework your loan? Here’s some advice:
Get informed
This is easier than you think. Start at makinghomeaffordable.gov, the official Treasury Department website for the program.
You can refinance your loan using the program if you are current on your payments, but if you have fallen behind, you will need to seek a loan modification.
The site notes that loans that are “under water” – where the value of the home is less than the current mortgage – can qualify, for loans that are as much as 105 percent of the home’s current value. Moody’s Economy.com estimates that as many as 15.9 percent of all home loans are “under water” to some degree this year.
Get help
Some websites will show you the terms of the loan modification program and figure out whether you qualify.
One is MortgageReport.com, which comes from the same firm that created SimpleTuition.com, a student loan comparison tool. MortgageReport.com gives borrowers a “diagnosis” for their loans. There is no charge to borrowers, who input their loan amounts and other debts.
Users who qualify for a modification will be provided with a list of lenders. Borrowers can then decide whether to send on their own information.
Another site gives borrowers a free credit score. Fair Isaac, the company that produces the FICO credit score that is commonly used for mortgages, started MortgageReliefOnline.com in April. The site, also free to users, allows you to see whether you qualify and then refers you to mortgage counselors
You also can get help the old-fashioned way, by talking to someone.
You can find thousands of counselors trained by the U.S. Department of Housing and Urban Development by calling the local consumer credit counseling service or through the federal Hope Now program, 888-995- Hope (4673).
Get organized
“Be prepared,” said Dale Vermillion, a mortgage industry consultant and author of Navigating the Mortgage Maze. “Have your credit report available and know your credit score.”
Expect to be asked for copies of recent tax returns or pay stubs, information on your loan and any other loans, including a car loan, student loans and personal debts.
Don’t give up
“The first three or four people [you speak to] don’t have any power at all,” said Ryan Smart, vice president of RightTrack Financial Services, a Delray Beach firm that negotiates loan modifications. “The whole system exists to keep people away. They give you ‘negotiators’ who have no power to negotiate the loans.”
Keep going until you get to someone who does have the authority to change your loan.
Copyright © 2009 Sun Sentinel, Fort Lauderdale, Fla., Harriet Johnson Brackey. Distributed by McClatchy-Tribune Information Services.
It’s a mess for borrowers trying to renegotiate the terms of their mortgages right now. That’s despite a highly publicized, $75 billion, Obama administration program that pays lenders to modify loans.
If you need to get a new deal on your mortgage – as millions of people do – the best thing you can do is to arm yourself with information, about the problems you’ll face and what you can do to get around them.
“People are confused,” said Kevin Walker, president and chief executive of MortgageReport.com, a new website that helps borrowers learn whether they are eligible for loan modifications. “Frankly, lenders are still trying to figure out the procedures they’re supposed to follow to implement these programs.”
Not many loans are being modified under the Making Home Affordable program, which was announced in February.
By mid-May, the Treasury Department reported the program had resulted in 55,000 loan modifications so far.
Lenders can modify loans on their own, not using the program. Hope Now, an industry coalition trying to combat the flood of foreclosures nationwide, said its members had independently modified 127,000 loans in April and made 143,000 new repayment plans, a record number.
But even those figures combined are a drop in the bucket against the Obama program’s stated goal of helping as many as 9 million homeowners refinance or modify their loans.
Nothing has turned back the tidal wave of foreclosures. About 1 million new foreclosures were filed in the nation between January and the end of May, the Center for Responsible Lending estimated. Moody’s Economy.com expects 1.54 million new foreclosures this year, after 1.44 million foreclosures last year.
In South Florida, Allen Robinson, managing partner of First Trust Mortgage Corp., said lenders don’t seem interested in drastically altering mortgages. They aren’t reducing the principal owed, he said, but are cutting rates or extending terms.
And there’s the problem of loan servicers handling a flood of applications. Jessica Cecere of the Consumer Credit Counseling Service of Palm Beach said she thinks fewer than 2 percent of loans are being modified.
Lenders say they’re trying to keep up with the demand, but the number of troubled borrowers is huge and still growing. In April, almost 3 million home loans nationwide were 60 days or more delinquent, according to the Hope Now alliance.
“The pipeline of people requesting loan modifications has grown tremendously since March,” said JP Morgan Chase spokeswoman Nancy Norris.
Chase has opened five offices in Florida, including one in Aventura and one in Miami, devoted only to loan modifications. Norris said Chase can modify loans from Chase, Washington Mutual and a small lender named EMC. Those loan offices are open evenings and weekends.
Wells Fargo, which owns Wachovia, has put details of the program on a website, www.wellsfargo.com/homeassist.
What can you do if you need to rework your loan? Here’s some advice:
Get informed
This is easier than you think. Start at makinghomeaffordable.gov, the official Treasury Department website for the program.
You can refinance your loan using the program if you are current on your payments, but if you have fallen behind, you will need to seek a loan modification.
The site notes that loans that are “under water” – where the value of the home is less than the current mortgage – can qualify, for loans that are as much as 105 percent of the home’s current value. Moody’s Economy.com estimates that as many as 15.9 percent of all home loans are “under water” to some degree this year.
Get help
Some websites will show you the terms of the loan modification program and figure out whether you qualify.
One is MortgageReport.com, which comes from the same firm that created SimpleTuition.com, a student loan comparison tool. MortgageReport.com gives borrowers a “diagnosis” for their loans. There is no charge to borrowers, who input their loan amounts and other debts.
Users who qualify for a modification will be provided with a list of lenders. Borrowers can then decide whether to send on their own information.
Another site gives borrowers a free credit score. Fair Isaac, the company that produces the FICO credit score that is commonly used for mortgages, started MortgageReliefOnline.com in April. The site, also free to users, allows you to see whether you qualify and then refers you to mortgage counselors
You also can get help the old-fashioned way, by talking to someone.
You can find thousands of counselors trained by the U.S. Department of Housing and Urban Development by calling the local consumer credit counseling service or through the federal Hope Now program, 888-995- Hope (4673).
Get organized
“Be prepared,” said Dale Vermillion, a mortgage industry consultant and author of Navigating the Mortgage Maze. “Have your credit report available and know your credit score.”
Expect to be asked for copies of recent tax returns or pay stubs, information on your loan and any other loans, including a car loan, student loans and personal debts.
Don’t give up
“The first three or four people [you speak to] don’t have any power at all,” said Ryan Smart, vice president of RightTrack Financial Services, a Delray Beach firm that negotiates loan modifications. “The whole system exists to keep people away. They give you ‘negotiators’ who have no power to negotiate the loans.”
Keep going until you get to someone who does have the authority to change your loan.
Copyright © 2009 Sun Sentinel, Fort Lauderdale, Fla., Harriet Johnson Brackey. Distributed by McClatchy-Tribune Information Services.
Bad drywall leaves owners frustrated, fearful
Kent Burkman and Rosie Puello-Burkman and their two kids live in a rental house in Boca Raton while their two-story dream home 20 miles away is stripped to the bare slats to remedy a homeowner’s horror: defective Chinese drywall.
Their builder, GL Homes, is fixing their house and at least two dozen others in the 500-home Canyon Isles development off Lyons Road west of Boynton Beach. For that, the Burkmans consider themselves fortunate. But they worry. They don’t know when the house will be finished. They don’t know whether the home they bought for $890,882 in late 2006 will be safe and structurally sound. And they don’t know whether their once-pristine neighborhood will ever be the same.
“Our family has been turned upside down,” Kent Burkman said. “It’s horrible to think that it’s no longer your home, it’s your problem.”
After hurricanes, foreclosures and dizzying price declines, contaminated drywall from China is the latest hardship facing homeowners. Not all Chinese drywall is bad, but as many as 36,000 homes in Florida and 100,000 nationwide may contain defective wallboard, which can give off a sulfurous “rotten egg” odor, tarnish metals and ruin appliances and electronics by corroding pipes and wires.
Complaints in Broward and Palm Beach counties generally have come from Parkland, Pompano Beach, Davie and communities west of Delray Beach and Boynton Beach. But local officials fear the problem is more widespread. Scores of bank-owned houses and condominiums may have the defective drywall and the lenders don’t know it because no one lives in the homes.
Homeowners insist the drywall is making them sick, causing nosebleeds, headaches, sore throats and respiratory issues. State and federal agencies have yet to determine whether the wallboard poses a health threat. The Florida Department of Health is waiting for results after testing the air quality of a house in Parkland last week.
Most complaints involve homes built from 2002 to 2006 during the housing boom that caused a shortage of materials. Builders then began using imports. Homes rebuilt after the busy 2004 and 2005 hurricane seasons also are at risk for the defective drywall.
Some homeowners are filing suits, accusing builders and Chinese drywall manufacturers of running from the problem. Others are moving out of the homes and don’t know when or if they’ll be fixed.
Parkland resident Holly Krulik moved her family of four in with her parents in April after she discovered her house in Heron Bay had defective Chinese drywall.
“I’m lucky I have parents here,” she said. “Many of my neighbors don’t have the financial means to seek a rental.”
Her builder, WCI Communities Inc., has yet to fix the house, and she realizes it could be months or years before WCI steps up. If ever.
A spokeswoman for WCI did not return calls last week. The builder has said it is responding to complaints by inspecting homes but is limited in what it can do to solve the problem because it has filed for Chapter 11 bankruptcy protection.
The Burkmans say they’re grateful GL is working with them and paying for their rental home, but they’re still concerned because there are no uniform standards for fixing a home that has the defective wallboard.
“They’re learning as they go and concluding what needs to be done,” Kent Burkman, 44, said of GL. “There’s no certification that their process is complete and correct.”
GL Homes executives declined to be interviewed. In a statement, the Sunrise-based builder said workers installed Chinese drywall in a “limited number” of homes between February and November 2006.
GL said it has hired independent experts to ensure the homes are being repaired correctly. The builder said it has exceeded the experts’ recommendations and is giving one-year warranties against defects in materials and workmanship. The company did not say who the experts are or how it is going beyond their recommendations. After discovering the Chinese drywall in the Burkmans’ home in April, GL said it planned to rip out all the drywall, insulation, air-conditioning duct work and the copper plumbing. Essentially, the home would be stripped to its bones.
The Burkmans said GL gave them $3,000 a month to move to temporary quarters. The couple moved out of their house May 1 and signed a four-month lease for the rental. The company didn’t say what will happen after that.
The builder said the Burkmans would be back in their home in eight to 16 weeks. But they aren’t counting on it.
“We’ll be amazed if we’re back in by Christmas,” said Rosie Puello-Burkman, 42, a marketing vice president for JM Family Enterprises in Deerfield Beach.
They said they took days off from work and spent several hundred dollars to pack and move into the rental house that’s half the size of their Canyon Isles home. Everything they left behind was put into storage at GL’s expense.
The Burkmans are trying to limit the strain on their 9-year-old son and 7-year-old daughter, telling them simply that their house is being renovated.
Kent Burkman, a real estate agent, stops by the house each day to check on the progress. The family is still responsible for mowing the yard and paying the quarterly homeowner association fees of $924.
The couple hasn’t had any luck getting their lender to suspend mortgage payments while they’re out of the house. They declined to say what their monthly mortgage payment is.
The Burkmans insist they won’t walk away from the home because they have too much invested in it. But they can see why homeowners without equity would choose to hand the keys back to the bank.
Their gated development looks like a construction site. Huge Dumpsters and portable toilets sit in the front yards of the houses with the defective drywall. Passers-by can see from the streets the exposed framework.
In response to mounting drywall complaints, the Florida Association of Realtors has added an optional disclosure form for sellers of homes built during the past few years. The Consumer Product Safety Commission advises prospective homebuyers to inspect exposed drywall.
At a recent drywall litigation conference in Orlando, scientists, government officials, lawyers and property insurers agreed there are more questions than answers. And real estate agents say it’s unclear what effect the drywall will have on the beleaguered housing market.
“It’s just too new,” said Marla Martin, a spokeswoman for the state Realtors’ group. “But if you’re a buyer, this has to be on your radar.”
Kent Burkman said he’s not aware of any Canyon Isles homes selling since the drywall was discovered. He said he doesn’t blame buyers for staying away.
The Burkmans get by as best they can, all the while wondering: Will their home regain its value? Will Canyon Isles overcome the stigma? Will they ever get to resume the lifestyle they chose when they bought there?
“I’d like to say we’ll get all that back,” Kent Burkman said. “But at this point, you have to ask, ‘How?’”
Copyright © 2009 Sun Sentinel, Fort Lauderdale, Fla., Paul Owers. Distributed by McClatchy-Tribune Information Services.
Their builder, GL Homes, is fixing their house and at least two dozen others in the 500-home Canyon Isles development off Lyons Road west of Boynton Beach. For that, the Burkmans consider themselves fortunate. But they worry. They don’t know when the house will be finished. They don’t know whether the home they bought for $890,882 in late 2006 will be safe and structurally sound. And they don’t know whether their once-pristine neighborhood will ever be the same.
“Our family has been turned upside down,” Kent Burkman said. “It’s horrible to think that it’s no longer your home, it’s your problem.”
After hurricanes, foreclosures and dizzying price declines, contaminated drywall from China is the latest hardship facing homeowners. Not all Chinese drywall is bad, but as many as 36,000 homes in Florida and 100,000 nationwide may contain defective wallboard, which can give off a sulfurous “rotten egg” odor, tarnish metals and ruin appliances and electronics by corroding pipes and wires.
Complaints in Broward and Palm Beach counties generally have come from Parkland, Pompano Beach, Davie and communities west of Delray Beach and Boynton Beach. But local officials fear the problem is more widespread. Scores of bank-owned houses and condominiums may have the defective drywall and the lenders don’t know it because no one lives in the homes.
Homeowners insist the drywall is making them sick, causing nosebleeds, headaches, sore throats and respiratory issues. State and federal agencies have yet to determine whether the wallboard poses a health threat. The Florida Department of Health is waiting for results after testing the air quality of a house in Parkland last week.
Most complaints involve homes built from 2002 to 2006 during the housing boom that caused a shortage of materials. Builders then began using imports. Homes rebuilt after the busy 2004 and 2005 hurricane seasons also are at risk for the defective drywall.
Some homeowners are filing suits, accusing builders and Chinese drywall manufacturers of running from the problem. Others are moving out of the homes and don’t know when or if they’ll be fixed.
Parkland resident Holly Krulik moved her family of four in with her parents in April after she discovered her house in Heron Bay had defective Chinese drywall.
“I’m lucky I have parents here,” she said. “Many of my neighbors don’t have the financial means to seek a rental.”
Her builder, WCI Communities Inc., has yet to fix the house, and she realizes it could be months or years before WCI steps up. If ever.
A spokeswoman for WCI did not return calls last week. The builder has said it is responding to complaints by inspecting homes but is limited in what it can do to solve the problem because it has filed for Chapter 11 bankruptcy protection.
The Burkmans say they’re grateful GL is working with them and paying for their rental home, but they’re still concerned because there are no uniform standards for fixing a home that has the defective wallboard.
“They’re learning as they go and concluding what needs to be done,” Kent Burkman, 44, said of GL. “There’s no certification that their process is complete and correct.”
GL Homes executives declined to be interviewed. In a statement, the Sunrise-based builder said workers installed Chinese drywall in a “limited number” of homes between February and November 2006.
GL said it has hired independent experts to ensure the homes are being repaired correctly. The builder said it has exceeded the experts’ recommendations and is giving one-year warranties against defects in materials and workmanship. The company did not say who the experts are or how it is going beyond their recommendations. After discovering the Chinese drywall in the Burkmans’ home in April, GL said it planned to rip out all the drywall, insulation, air-conditioning duct work and the copper plumbing. Essentially, the home would be stripped to its bones.
The Burkmans said GL gave them $3,000 a month to move to temporary quarters. The couple moved out of their house May 1 and signed a four-month lease for the rental. The company didn’t say what will happen after that.
The builder said the Burkmans would be back in their home in eight to 16 weeks. But they aren’t counting on it.
“We’ll be amazed if we’re back in by Christmas,” said Rosie Puello-Burkman, 42, a marketing vice president for JM Family Enterprises in Deerfield Beach.
They said they took days off from work and spent several hundred dollars to pack and move into the rental house that’s half the size of their Canyon Isles home. Everything they left behind was put into storage at GL’s expense.
The Burkmans are trying to limit the strain on their 9-year-old son and 7-year-old daughter, telling them simply that their house is being renovated.
Kent Burkman, a real estate agent, stops by the house each day to check on the progress. The family is still responsible for mowing the yard and paying the quarterly homeowner association fees of $924.
The couple hasn’t had any luck getting their lender to suspend mortgage payments while they’re out of the house. They declined to say what their monthly mortgage payment is.
The Burkmans insist they won’t walk away from the home because they have too much invested in it. But they can see why homeowners without equity would choose to hand the keys back to the bank.
Their gated development looks like a construction site. Huge Dumpsters and portable toilets sit in the front yards of the houses with the defective drywall. Passers-by can see from the streets the exposed framework.
In response to mounting drywall complaints, the Florida Association of Realtors has added an optional disclosure form for sellers of homes built during the past few years. The Consumer Product Safety Commission advises prospective homebuyers to inspect exposed drywall.
At a recent drywall litigation conference in Orlando, scientists, government officials, lawyers and property insurers agreed there are more questions than answers. And real estate agents say it’s unclear what effect the drywall will have on the beleaguered housing market.
“It’s just too new,” said Marla Martin, a spokeswoman for the state Realtors’ group. “But if you’re a buyer, this has to be on your radar.”
Kent Burkman said he’s not aware of any Canyon Isles homes selling since the drywall was discovered. He said he doesn’t blame buyers for staying away.
The Burkmans get by as best they can, all the while wondering: Will their home regain its value? Will Canyon Isles overcome the stigma? Will they ever get to resume the lifestyle they chose when they bought there?
“I’d like to say we’ll get all that back,” Kent Burkman said. “But at this point, you have to ask, ‘How?’”
Copyright © 2009 Sun Sentinel, Fort Lauderdale, Fla., Paul Owers. Distributed by McClatchy-Tribune Information Services.
Thursday, June 11, 2009
Florida tests air in house with Chinese drywall
The Florida Department of Health has completed air-quality tests at a home built with Chinese drywall.
Officials collected air samples from the Parkland home over three days through Wednesday. The samples were sent to laboratories in Lakeland and Atlanta for analysis. The homeowners had complained about coughing and feeling dizzy.
A state toxicologist, David Krause, says the testing cost the state between $40,000 and $50,000.
State and federal officials say no testing yet has confirmed the drywall poses health risks, though homeowners nationwide have complained about nose bleeds, headaches, sore throats and other ailments.
As many as 36,000 homes in Florida are estimated to have the defective drywall.
Source: AP
Officials collected air samples from the Parkland home over three days through Wednesday. The samples were sent to laboratories in Lakeland and Atlanta for analysis. The homeowners had complained about coughing and feeling dizzy.
A state toxicologist, David Krause, says the testing cost the state between $40,000 and $50,000.
State and federal officials say no testing yet has confirmed the drywall poses health risks, though homeowners nationwide have complained about nose bleeds, headaches, sore throats and other ailments.
As many as 36,000 homes in Florida are estimated to have the defective drywall.
Source: AP
Wednesday, June 10, 2009
Foreclosure crisis bleeds into prime loans
The pace of prime borrowers going into foreclosure is accelerating, especially in states with mounting unemployment or property values that saw a big run-up during the housing boom.
It’s a marked shift from earlier this year, when foreclosures were driven by defaults on subprime loans. And it has major implications – ravaging the credit scores of borrowers who once had unblemished records and dragging down property values in more affluent neighborhoods.
It also threatens to undermine the housing recovery.
“It’s definitely a concern,” says Brian Bethune at IHS Global Insight. “(Unemployment) is a major driver of foreclosures, and it will frustrate the housing recovery process.”
In the first quarter, almost half of the overall increase in the start of foreclosures was due to the increase in prime, fixed-rate loans, according to the Mortgage Bankers Association (MBA). At the end of the fourth quarter, 2.4 percent of prime mortgages were seriously delinquent, more than double the 1.1 percent at the end of March 2008, according to a report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision.
“In the beginning, the higher-end (homes) were a bit isolated,” says Kevin Marshall, president of Clear Capital, a provider of real estate asset valuation. “But in the last several months, we’re seeing a significant erosion in the higher-end homes. It’s reached into the prime loans.”
California, Florida, Arizona and Nevada represent 56 percent of the increase in foreclosure starts, including half of the increase in prime fixed-rate foreclosure starts, according to the MBA.
That coincides with states reporting some of the highest unemployment rates. In California, the unemployment rate in April was 11 percent, according to the Department of Labor. In Nevada, it was 10.6 percent.
Economists fear that further increases in unemployment could lead to more defaults on prime, fixed-rate loans.
That’s what happened to Marvin Clayton, 47, of Waco, Texas. He lost income after his wife had a stroke and was unable to work. Then he lost his job a year ago. He’s now behind on his 30-year, 5.78 percent prime loan and is facing foreclosure in July. He is currently trying to get another job in retailing.
“I was trying to make it off one income but was struggling to make payments,” Clayton says. “I’m still hoping for a modification from my bank.”
Copyright © 2009 USA TODAY, a division of Gannett Co. Inc.
It’s a marked shift from earlier this year, when foreclosures were driven by defaults on subprime loans. And it has major implications – ravaging the credit scores of borrowers who once had unblemished records and dragging down property values in more affluent neighborhoods.
It also threatens to undermine the housing recovery.
“It’s definitely a concern,” says Brian Bethune at IHS Global Insight. “(Unemployment) is a major driver of foreclosures, and it will frustrate the housing recovery process.”
In the first quarter, almost half of the overall increase in the start of foreclosures was due to the increase in prime, fixed-rate loans, according to the Mortgage Bankers Association (MBA). At the end of the fourth quarter, 2.4 percent of prime mortgages were seriously delinquent, more than double the 1.1 percent at the end of March 2008, according to a report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision.
“In the beginning, the higher-end (homes) were a bit isolated,” says Kevin Marshall, president of Clear Capital, a provider of real estate asset valuation. “But in the last several months, we’re seeing a significant erosion in the higher-end homes. It’s reached into the prime loans.”
California, Florida, Arizona and Nevada represent 56 percent of the increase in foreclosure starts, including half of the increase in prime fixed-rate foreclosure starts, according to the MBA.
That coincides with states reporting some of the highest unemployment rates. In California, the unemployment rate in April was 11 percent, according to the Department of Labor. In Nevada, it was 10.6 percent.
Economists fear that further increases in unemployment could lead to more defaults on prime, fixed-rate loans.
That’s what happened to Marvin Clayton, 47, of Waco, Texas. He lost income after his wife had a stroke and was unable to work. Then he lost his job a year ago. He’s now behind on his 30-year, 5.78 percent prime loan and is facing foreclosure in July. He is currently trying to get another job in retailing.
“I was trying to make it off one income but was struggling to make payments,” Clayton says. “I’m still hoping for a modification from my bank.”
Copyright © 2009 USA TODAY, a division of Gannett Co. Inc.
Friday, June 5, 2009
BECKER & POLIAKOFF TO HOST FREE WEBINARS ON HURRICANE PREPAREDNESS & RECOVERY
Live Presentations Provide Opportunity to Interact with Attorneys of Firm’s New Hurricane Preparedness & Claims Recovery Team
FT. LAUDERDALE, FL, June 1, 2009 – Becker & Poliakoff, P.A., a diversified commercial law firm with more than 120 attorneys in 13 Florida offices, New York City, Nassau, Prague and affiliated international offices, today announced a series of free interactive Hurricane Preparedness & Recovery Webinars for board members, professional managers and residents of condominium and homeowners associations.
The Web-based presentations on “best practices” in hurricane preparation, reconstruction and the insurance claims processes will be conducted by the firm’s Hurricane Preparedness & Claims Recovery Team. Comprised of Community Association law, Construction law and Insurance & Claims Recovery law attorneys with decades of experience representing associations through previous storms, the team can provide legal advice on all of the issues facing communities before, during and after a storm.
“The Webinars will expose Community Association residents and managers to our comprehensive integrated approach to natural disaster-related matters,” said Ken Direktor, the attorney who heads the firm’s Community Association practice. “Participants will be able to interact with our attorneys in real time and download educational materials to guide them through the hurricane season.”
Added Steve Lesser, leader of the Construction Law practice, “For many communities, decisions made after a storm can have more disastrous consequences than the hurricane itself. The Hurricane Preparedness and Claims Recovery team draws on knowledge and experience across the firm to provide tools that communities need to made smart decisions in all phases of dealing with the effects of a major storm.”
The Internet-based series will include the following programs:
§ June 11 – 10:00 AM – 11:15 AM (EST) “Hurricane Season 2009: Are You Ready to Weather the Storm?” Covers disaster planning, insurance coverage review, building & facility hardening, financial planning, and rules relating to securing property, emergency powers and disaster plan activation.
§ June 30 – 12 PM Noon – 1:15 PM (EST) “Don't Let This Happen to You: Avoiding Pitfalls in Construction Contracts. The program addresses property damage and reconstruction issues, including contractor selection, engineer vs. public adjuster selection, contract forms & terms, and lien laws.
§ July 20 – 3:00 PM – 4:15 PM (EST) “The Insurance Company is Not Your Friend –Preparing and Presenting an Insurance Claim for Maximum Recovery” Covers strategies for proper reporting and preparation of claim, appraiser selection, mediation & litigation options when insurer rejects claim, and strategies for reopening a claim for newly discovered damage.
Association property managers, board members and residents interested in participating can pre-register in advance online at www.becker-poliakoff.com/events/seminars.html.
About Becker & Poliakoff P.A.
Becker & Poliakoff is a diverse commercial law firm with more than 120 attorneys in 13 Florida offices, New York City, Nassau, Prague and affiliated international offices. Celebrating its thirty sixth (36th) year of serving clients, the firm has seven primary areas of practice: Real Estate, Construction, Community Association, Customs & International Trade, Commercial Litigation, Corporate, Tax & Securities, and Government Law & Lobbying.
FT. LAUDERDALE, FL, June 1, 2009 – Becker & Poliakoff, P.A., a diversified commercial law firm with more than 120 attorneys in 13 Florida offices, New York City, Nassau, Prague and affiliated international offices, today announced a series of free interactive Hurricane Preparedness & Recovery Webinars for board members, professional managers and residents of condominium and homeowners associations.
The Web-based presentations on “best practices” in hurricane preparation, reconstruction and the insurance claims processes will be conducted by the firm’s Hurricane Preparedness & Claims Recovery Team. Comprised of Community Association law, Construction law and Insurance & Claims Recovery law attorneys with decades of experience representing associations through previous storms, the team can provide legal advice on all of the issues facing communities before, during and after a storm.
“The Webinars will expose Community Association residents and managers to our comprehensive integrated approach to natural disaster-related matters,” said Ken Direktor, the attorney who heads the firm’s Community Association practice. “Participants will be able to interact with our attorneys in real time and download educational materials to guide them through the hurricane season.”
Added Steve Lesser, leader of the Construction Law practice, “For many communities, decisions made after a storm can have more disastrous consequences than the hurricane itself. The Hurricane Preparedness and Claims Recovery team draws on knowledge and experience across the firm to provide tools that communities need to made smart decisions in all phases of dealing with the effects of a major storm.”
The Internet-based series will include the following programs:
§ June 11 – 10:00 AM – 11:15 AM (EST) “Hurricane Season 2009: Are You Ready to Weather the Storm?” Covers disaster planning, insurance coverage review, building & facility hardening, financial planning, and rules relating to securing property, emergency powers and disaster plan activation.
§ June 30 – 12 PM Noon – 1:15 PM (EST) “Don't Let This Happen to You: Avoiding Pitfalls in Construction Contracts. The program addresses property damage and reconstruction issues, including contractor selection, engineer vs. public adjuster selection, contract forms & terms, and lien laws.
§ July 20 – 3:00 PM – 4:15 PM (EST) “The Insurance Company is Not Your Friend –Preparing and Presenting an Insurance Claim for Maximum Recovery” Covers strategies for proper reporting and preparation of claim, appraiser selection, mediation & litigation options when insurer rejects claim, and strategies for reopening a claim for newly discovered damage.
Association property managers, board members and residents interested in participating can pre-register in advance online at www.becker-poliakoff.com/events/seminars.html.
About Becker & Poliakoff P.A.
Becker & Poliakoff is a diverse commercial law firm with more than 120 attorneys in 13 Florida offices, New York City, Nassau, Prague and affiliated international offices. Celebrating its thirty sixth (36th) year of serving clients, the firm has seven primary areas of practice: Real Estate, Construction, Community Association, Customs & International Trade, Commercial Litigation, Corporate, Tax & Securities, and Government Law & Lobbying.
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