Cape Coral Florida's Real Estate Guide

FHA: Changes system for selling HUD homes

WASHINGTON - June 15, 2010 - The U.S. Department of Housing and Urban Development (HUD) announced that 23 companies will serve as Asset Managers (AM) and 32 other firms will serve as Field Service Managers (FSM) under its Management and Marketing (M&M) program, known as M&M III.

Under M&M III, the functions of maintaining and selling the property have been separated. The Field Service Managers will be responsible for property maintenance and preservation and the Asset Managers will be responsible for the sale of the homes. HUD hopes the change will reduce risk, increase sale prices and accelerate the pace of reselling HUD's inventory of foreclosed FHA homes.

Under prior agreements, M&M contractors were responsible for both maintenance and marketing of the Department's real estate-owned (REO) properties, but each function requires significantly different skill sets, thereby increasing the effectiveness of the program.

"These new contracts epitomize FHA's continuing effort to reduce risk, increase net returns, decrease holding times and improve efficiency in the resale of its inventory of foreclosed properties," said HUD Secretary Shaun Donovan. "It is critically important that FHA successfully and efficiently sell its inventory of these properties, and these contractors will help us do that."
 
HUD's current inventory of foreclosed FHA property is approximately 44,000 homes. That is up from the usual average level of 35,000 to 40,000.

© 2010 Florida Realtors®

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Buyers often overlook insurance costs

WASHINGTON May 17, 2010 Insurance is usually the last thing people worry about when they're buying a new home. According to the Insurance Information Institute, that's a mistake, because it will be an expense a buyer will have as long as they own the property. Here are some key issues that the institute urges every buyer to consider:

* How far is the home from the fire department? A location close to the station usually means lower insurance costs. * What is the condition of the plumbing and electrical systems? Older and poorly maintained systems cost more to insure.

* Does the property meet current building codes? Up-to-date properties are safer and also cheaper to insure. * What about wind damage? If insurance against windstorms is required, is private insurance available or will the buyer have to rely on a state-run program? If there a windstorm deductible, how high is it?

* Is the home vulnerable to flooding? Floods aren't covered under a standard homeowner policy, although most major insurers will provide it through the National Flood Insurance program. How much the insurance costs depends on where the property is located. More information is available at FloodSmart.gov.

* Is there earthquake risk? Earthquake insurance also requires an endorsement or a separate policy.

Source: Insurance Information Institute (05/06/2010) © Copyright 2010 INFORMATION, INC. Bethesda, MD (301) 215-4688

Foreclosures down 2 percent from last year

WASHINGTON - May 13, 2010 - Millions of Americans are still likely to lose their homes in the coming years, but the foreclosure crisis is finally showing signs of subsiding.

The number of households facing foreclosure in April fell 2 percent from a year ago, the first annual decline in five years, RealtyTrac Inc. said Thursday.

But the data aren't all sunny. While the number of new delinquencies is dropping, the number of borrowers losing their homes is still rising. Banks seized a record 92,000 homes last month.

And there are millions more potential foreclosures ahead. Nearly 7.4 million borrowers, or 12 percent of all households with a mortgage, had missed at least one month of payments or were in foreclosure as of March, according to Lender Processing Services Inc., a mortgage data research firm.

RealtyTrac, a foreclosure-listing firm in Irvine, Calif., reported that nearly 334,000 households, or one in every 387 homes, received a foreclosure-related notice in April. That was down more than 9 percent from March.

Economic woes, such as unemployment or reduced income, are 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 now the fastest growing group of foreclosures.

As the economy turns around, "you will see an improvement in housing markets and in foreclosure activity," said Rick Sharga, a RealtyTrac senior vice president. "The problem is that there's such a backlog right now."

Lenders are offering a variety of programs to help homeowners modify their loans, but their success rates vary. Hundreds of thousands of homeowners can't qualify or fall back into default.

The Obama administration is managing a $75 billion program that so far has helped about 231,000 homeowners with permanent reductions to their monthly mortgage bills. That's about 20 percent of the 1.2 million borrowers who started the program over 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.

Among states, Nevada posted the highest foreclosure rate in April, with one in every 69 households receiving a foreclosure notice. Foreclosures there were up 10 percent from March, but unchanged from a year earlier. Next on the list were Arizona, Florida, California and Michigan.

Las Vegas continued to be the city with the nation's highest foreclosure rate, but activity there was down 3 percent from a year earlier.

And in another sign the problem is receding, nine out of the top 10 cities with the highest foreclosure rates posted annual declines. The exception was Reno, Nev., where foreclosures were up 16 percent from a year ago.

Copyright © 2010 The Associated Press, Alan Zibel, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  

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