Monthly Archives: September 2019

Gov. DeSantis Unveils His Environmental Proposals

DeSantis wants lawmakers to double fines for sewage spills into waterways and lock an environmental-funding pledge into state budgets for at least the next three years. He says he’ll also roll out more environmental proposals before the 2020 Fla. Legislature meets in Jan.

TALLAHASSEE, Fla. – Gov. Ron DeSantis wants lawmakers to double fines for sewage spills into waterways and lock an environmental-funding pledge into state budgets for at least the next three years.

The proposals are the first of a series the governor said he will make before the 2020 session of the Florida Legislature, which starts in January. However, lawmakers return to Tallahassee on Monday to hold committee meetings as they prepare for the session.

Doubling fines for sewage spills would eliminate what DeSantis described as a “slap me on the wrist” approach to penalizing local governments. Civil penalties are now up to $10,000 a day, DeSantis said during an appearance Wednesday at the Conservancy of Southwest Florida Nature Center in Naples.

“What we end up seeing happening is, you have some of these municipalities, it’s cheaper for them to pay a fine and spew all this sewage into the waterways, because it’s the cost of doing business,” DeSantis said. “They’d rather do that than invest in the infrastructure they need to make sure the waterways surrounding them are safe and clean.”

DeSantis noted, for example, spills that have occurred into Tampa Bay.

Florida Realtors is dedicated to environmentally sound development and the preservation of Florida’s natural resources.

Rep. Randy Fine, R-Palm Bay, proposed a similar measure targeting spills during the 2019 legislative session. Fine’s proposal, aimed at Brevard County for a sewage spill into the Indian River Lagoon in 2017 that lasted 35 days, sought to impose a $2 fee for every gallon of raw sewage released. Fine’s proposal did not pass.

DeSantis also would like the Legislature to include $625 million per year over the next three annual state budgets for environmental projects. The amount would equal what he requested heading into the 2019 session and allow him to claim victory for his previously stated goal of $2.5 billion over four years in funding for the Everglades, natural springs, combating blue-green algae and red tide outbreaks, and carrying out other water projects.

That total would also represent a $1 billion increase over what the state spent over the previous four years under former Gov. Rick Scott, now a U.S. senator.

Noah Valenstein, secretary of the Department of Environmental Protection, said recurring funds would ensure ongoing efforts aren’t slowed by “a pause as you wait for more funding.”

Most of the money would continue to come from a 2014 voter-approved constitutional amendment that requires 33% of revenues from a tax on real-estate documentary stamps to go to land and water conservation. That money goes into what is known as the Land Acquisition Trust Fund.

Since the passage of the amendment, legislators each year have directed at least $200 million to the Everglades, $64 million to a reservoir in the Everglades Agricultural Area, $50 million to natural springs and $5 million to Lake Apopka.

With more than $906 million available from the trust fund for the current year, lawmakers at the end of the 2019 session repeatedly pointed to exceeding DeSantis’ environmental-spending request by about $55 million.

Senate Appropriations Chairman Rob Bradley, R-Fleming Island, said Wednesday he’s excited to work with DeSantis on the environmental proposals.

“Our character is defined by its waters, its rivers, the Everglades, that river of grass, the beaches. Water is central to who we are and what we are as a people,” Bradley said. “If we were to neglect those precious natural resources that God has given us, then the people of the state of Florida would be angry – and they would have a right to be.”

Bradley has in the past proposed using the trust fund money to increase funding for the restoration of the St. Johns River, its tributaries and the Keystone Heights lake region in North Florida, as well as the Florida Forever land-preservation program.

Source: News Service of Florida, Jim Turner

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Report: Inventory and List Prices Drop Unexpectedly

According to realtor.com, its total number of listings declined 1.8% year-to-year in Aug., but median list prices also surprisingly dropped 1.8% month-to-month.

CHICAGO – Housing inventories grew tighter in August following what had been a year of improvement – and median listing prices saw their largest July-to-August drop since 2012, according to realtor.com’s latest housing report.

The August 2019 housing trend report suggests that the drop occurred because some consumers are growing cautious about the economy.

Inventories of homes for sale fell 1.8% year-over-year in August, the first time in a year that inventories have dropped.

“The state of the housing market as we head into the latter half of 2019 is a tug of war between increased affordability and economic anxiety,” says George Ratiu, senior economist for realtor.com. “We’re starting to see this tension play out in our August data. On the one hand, lower interest rates have given buyers more purchasing power, which is contributing to August’s decline in national inventory. However, concerns over trade wars and cutbacks in corporate spending are causing some buyers to postpone their search. This is contributing to both the slowdown in prices, as well as the inventory decline, as buyers stay put in their current homes.”

The U.S. median listing price in August was $309,000, up 4.9% from a year ago but 1.8% lower than July. The 1.8% drop is the largest drop from July to August in seven years. Home prices usually increase from June until September.

“The size of this drop points to an earlier than usual deceleration of prices, likely attributed to recent concerns over economic uncertainty,” realtor.com notes.

A separate survey by realtor.com found that 11% of buyers expect a recession to strike by the end of the year, and 33% expect one in 2020. When a recession does hit, 56% of home shoppers said they would pause their home search until the economy recovered.

“These strong but opposing forces make it more difficult to predict what will happen in the second half of this year,” Ratiu says. “If the headwinds of economic uncertainty intensify, it could prompt a decrease in buyer demand and shift housing inventory’s current trajectory. But if increased purchasing power prevails, we could see even more inventory declines and intensified competition between buyers.”

© 2019 Florida Realtors®

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Floridians Support Affordable Housing – but Not Next Door

While Florida residents want more affordable housing options, NIMBY (not in my backyard) neighbors often organize a protest after a specific site is selected.

ORLANDO, Fla. – Central Florida has seen it time and time again: A developer set sights on a neighborhood to put in affordable housing and soon residents are coming out in droves to stop it.

The need for more affordable housing in the Orlando metro area is well known, especially after the National Low Income Housing Coalition ranked it dead last among U.S. cities for affordable housing, with just 13 affordable and available rental homes for every 100 households who need them.

“You don’t have a public awareness problem,” said Tiffany Manuel, a strategist who spoke before a subcommittee of Orange County’s Housing For All task force on Wednesday. “Everybody’s talking about affordable housing.”

But acceptance of affordable housing is another story.

We meet with legislators each session and advocate for as many trust fund dollars as possible to help Floridians find homes.

“When you ask people, ‘Do you believe affordable housing is important?’ they say, ‘Yes, we want affordable housing.’ And then you say, ‘OK, well we’re going to build it into your block.’ And those are folks who come out and shut you down because they don’t want it in their neighborhood,” Manuel said.

Ryan Von Weller, a development associate at Wendover Housing Partners, which is building several affordable housing units across Central Florida, said NIMBYs (not in my backyard-ers) are a challenge in addressing the need for housing.

“Every one of our communities is designed and built to the same standards we would build a market-rate community,” said Von Weller, also the developer behind Sanford’s Warley Park, an affordable senior housing complex. “The preconceived notion is that it’s going to (look like) public housing or Section 8 housing … (but) all resistance goes away almost immediately once they see what we’re actually proposing.”

But that’s not always the case.

In April, more than 1,000 people signed a petition to keep out an affordable 92-unit apartment in Seminole County. Residents said it would cause traffic problems, crowd schools and lower property values.

In May, several Lake County residents came out against a local tree farm building an on-site dormitory for its workers, afraid the workers would pose a danger to their children.

Similarly, low-income housing plans in Maitland, DeBary, Orlando’s Conway area and Pine Hills have seen pushback in the past decade. In Parramore, a historically black and impoverished neighborhood of Orlando, some residents were upset with plans to put in another designated affordable housing complex.

The 38-member task force was established by Orange County Mayor Jerry Demings shortly after he took office. Its job is to find solutions to address the housing crisis. It’s set to submit its final report this fall.

Manuel said winning over residents will be important in tackling the issue, and the message the county uses will be crucial. She warned against using statistics to push the issue and instead take a more personal approach. She urged the task force to talk with the teachers union, whose members sometimes struggle to find housing; hospitals that treat low-income residents; and child-care groups that assist impoverished families.

Manuel showed campaigns she’s worked on around the country that could work in Orlando. In one, instead of emphasizing the need for affordable housing itself, the campaign focused on the role the people who live in affordable units play in their community.

It spotlighted teachers, firefighters and other workers under the tagline, “We need the people who need affordable housing.”

A similar campaign showed restaurant workers and posed the question: “Who’s cooking your food? No one without year-round housing.”

Another sought to address homelessness by educating residents about the importance of having an address in order to apply for a job and register kids for school.

“You want to make sure you’re telling the story of a wide variety of folks,” Manuel said. “You’ve got to get those folks on board.”

© 2019 The Orlando Sentinel (Orlando, Fla.), Caroline Glenn. Distributed by Tribune Content Agency, LLC.

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Long-Term Mortgage Rates Rise: 30-Year at 3.56%

Freddie Mac thinks that less worry over trade helped lift global stock markets, and the resulting impact on bonds nudged the average 30-year FRM higher this week.

WASHINGTON (AP) – U.S. long-term mortgage rates rose this week but remained at historically low levels.

Mortgage buyer Freddie Mac says the rate on the 30-year, fixed-rate mortgage increased to 3.56% from 3.49% last week. Average rates on the benchmark loan have remained below 3.6% for four straight weeks – the first time that’s happened since the fourth quarter of 2016.

A year ago, the 30-year rate stood at 4.6%.

The average rate for 15-year, fixed-rate home loans rose to 3.09% from 3% last week.

Mortgage rates fell sharply over the summer as a slowing global economy and tensions from the trade war between the U.S. and China have caused interest rates on government bonds to tumble. The yields on government bonds, especially the 10-year Treasury note, influence long-term mortgage rates.

The trade concerns have appeared to ease in recent days and sentiment has brightened in global stock markets. Interest rates on government bonds have ticked up. China said Wednesday that it will exempt U.S. industrial grease and some other imports from tariff increases, though it kept in place penalties on soybeans and other major U.S. exports ahead of negotiations next month.

As a gesture of “goodwill,” President Donald Trump said on Twitter that the U.S. agreed to a two-week delay in a planned increase in tariffs on some Chinese imports. The moves could indicate that both sides are settling in for an extended conflict even as they prepare for talks in Washington aimed at ending the dispute that threatens global economic growth.

Investors continue to expect the Federal Reserve to cut interest rates at its policymaking meeting next week in another bid by the central bank to help maintain U.S. economic growth. The Fed raised its benchmark interest rate in July by a quarter point, its first hike in a decade.

Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures.

The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates.

The average fee on 30-year fixed-rate mortgages was unchanged this week at 0.5 point.

The average fee for the 15-year mortgage fell to 0.5 point from 0.6 point.

The average rate for five-year adjustable-rate mortgages rose to 3.36% from 3.30% last week. The fee slipped to 0.3 point from 0.4 point.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Who Should Qualify for a Mortgage? Banks, CFPB Disagree

What loan application or credit score details can predict future foreclosures? Banks say the QM rule on loan applicants’ debt-to-income ratio should be changed.

WASHINGTON – Four bank giants have formed a coalition to push the U.S. Consumer Financial Protection Bureau (CFPB) into changing its Ability to Repay/Qualified Mortgage rule  (QM rule) and eliminate the debt-to-income ratio requirement. Bank of America, Quicken Loans, Wells Fargo and Caliber Home Loans are leading the call for change.

CFPB created the QM rule following the financial crisis. It requires lenders to verify that a borrower has the ability to repay a mortgage before lending them money. As part of that process, a borrower’s monthly debt-to-income ratio (DTI) must not exceed 43%.

Freddie Mac thinks that less worry over trade helped lift global stock markets, and the resulting impact on bonds nudged the average 30-year FRM higher this week.

“A debt-to-income ratio by itself cannot accurately determine a credit borrower’s worthiness; rather, a more holistic measure is needed,” according to the National Association of Realtors® (NAR). “Several groups have proposed alternative measures, but more research is needed on all of them. NAR will work with the CFPB toward this goal.”

The DTI requirement doesn’t apply to loans backed by the government, such as through the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), Fannie Mae or Freddie Mac. Critics say that gives the GSEs an unfair advantage over private loans – ones that lenders don’t plan to sell to Fannie or Freddie – which must meet the DTI mandate.

However, that may change if Fannie and Freddie lose the protection. The CFPB has said it would allow the QM Patch – the stipulation that allows Fannie and Freddie to bypass that DTI requirement – to expire as scheduled on 2021. The GSEs will then be required to follow the same DTI rule as private lenders.

Fannie Mae and Freddie Mac buy over half the mortgages originated in the U.S. If the patch expires, the DTI requirement would apply to a majority of U.S. homebuyers.

The banks’ coalition efforts have recently been joined by other housing groups – such as the Mortgage Bankers Association, American Bankers Association, and the National Fair Housing Alliance. They’ve sent a letter to the CFPB asking for it to eliminate the 43% DTI cap on prime and near-prime loans. They argue that it’s limiting lending outside of a GSE-backed loan. They also argue that a DTI ratio, on its own merits, is not a reliable indicator of a borrower’s ability to repay.

“Elimination of the DTI requirement for prime and near-prime loans would preserve access to sustainable credit for the new generation of first-time homebuyers in a safe and sustainable way and in accordance with the fundamental ATR requirements,” the group says in its letter to the CFPB. “This change is especially important for reaching historically underserved borrowers, including low- to moderate-income households, and communities of color.”

Source: “Wells Fargo, Bank of America, Quicken Loans, Others Want DTI Requirement Eliminated From QM Lending Rules,” HousingWire (Sept. 10, 2019)

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Congress Presses HUD/Treasury over Fannie/Freddie Changes

Senators questioned officials about plans to reform Fannie Mae and Freddie Mac. Key issues: Guarantees the 30-year mortgage would still be available and possible impacts to affordable housing.

WASHINGTON (AP) – Trump administration officials on Tuesday defended their plan to Congress for ending government control of mortgage finance giants Fannie Mae and Freddie Mac, clashing with Democratic senators on whether the change would raise home borrowing costs and neglect lower-income homeowners.

The two finance companies nearly collapsed in the financial crisis 11 years ago and were bailed out at a cost to taxpayers of nearly $190 billion.

Treasury Secretary Steven Mnuchin and Housing and Urban Development (HUD) Secretary Ben Carson, along with regulator Mark Calabria, director of the Federal Housing Finance Agency (FHFA), testified before the Senate Banking Committee on the plan for returning Fannie and Freddie to private ownership.

The companies have become profitable again and have fully repaid their bailouts. Under the plan, their profits would no longer go to the Treasury but would be used to build up their capital bases as a cushion against possible future losses.

Fannie and Freddie together guarantee roughly half of the $10 trillion U.S. home loan market. They don’t make home loans. They buy them from banks and other lenders, and bundle them into securities, guarantee them against default and sell them to Wall Street investors.

Calabria said Fannie and Freddie’s capital must be bulked up “to match their risk profiles” and avoid another bailout. “In their current financial condition, the (companies) are not equipped to withstand a downturn in the housing market,” he testified, adding, “It keeps me up at night.”

30-year mortgages

The administration promises in the plan to preserve homebuyers’ access to 30-year, fixed-rate mortgages, which are the pillar of housing finance.

The plan “would preserve the longstanding government support of the 30-year, fixed-rate mortgage loan,” Mnuchin said. “That support, however, should be explicitly defined, tailored and paid for.”

Mnuchin acknowledged that for prices of 30-year mortgages to remain close to current market levels, some level of government support would be needed. He said Congress should authorize an explicit, paid-for guarantee “backed by the full faith and credit of the federal government” for qualified mortgages. The guarantee also should be available to competitors of Fannie and Freddie as mortgage financers, he said.

The administration initially looked to Congress for legislation to overhaul the housing finance system and return the companies to private shareholders. But Congress hasn’t acted, and now officials say they will take administrative action for the core change, ending the Fannie and Freddie conservatorships. They haven’t given a timeline for the administrative action.

“The Trump plan will make mortgages more expensive and harder to get,” said Sen. Sherrod Brown of Ohio, the committee’s senior Democrat.

Affordable housing

A flashpoint came over the issue of affordable housing. Fannie and Freddie currently have mandated targets for helping low-income and minority borrowers to buy homes.

A change outlined in the plan, which would have to be approved by Congress, would replace Fannie and Freddie’s affordable housing goals with more “tailored support” for first-time homebuyers and low- and moderate-income borrowers.

“We want to do it in the most effective way,” Mnuchin said.

Those proposals are “about leveling the playing field for Wall Street,” Brown said.

Fair housing

Under Carson, HUD proposed last month to make it harder for people to prove unintentional discrimination, known as “disparate impact,” against mortgage lenders and landlords. Sen. Chris Van Hollen, D-Md., told Carson that the proposal “goes way beyond” the Supreme Court’s 2015 ruling affirming that disparate impact can be considered discriminatory even without explicit intent – but also putting limits on its application in practice.

Van Hollen asked Carson about his newspaper commentary in 2015 that “government-engineered attempts to legislate racial equality create consequences that often make matters worse.”

Carson responded that “We uphold the principles of disparate impact.”

Sen. Mike Crapo, R-Idaho, the panel’s chairman, has previously proposed legislation to overhaul the housing finance system. He said at the hearing that the administration’s plan is close to his proposal, but “my strong preference remains to fix it through comprehensive legislation.”

Sen. John Kennedy, R-La., implored the officials to put a proposal before Congress. “This whole thing is a car wreck; it’s a dumpster fire,” Kennedy said. Put it before the committee, “and let senators be senators.”

Copyright 2019 The Associated Press., Marcy Gordon. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Some Florida Cities Might Remove Septic Tanks

A Gov. DeSantis executive order and concern for waterways has led more cities to look at alternative septic systems, but costs could get passed on to homeowners.

ESTERO, Fla. – Estero is discussing how to transition village neighborhoods currently using septic tanks to central water and sewer.

The Florida Department of Health estimates there are more than 2 million septic systems across the state. Lee County has more than 133,000 septic tanks, according to the department. Some scientists say leaky septic tanks can contribute to disastrous environmental events, such as the algae crisis that plagued Southwest Florida waters last year.

In Estero, many properties with septic systems are located along the Estero River, according to the village. The concern about water quality in the river, designated a special waterway by the Florida Department of Environmental Protection, has caused the village to examine taking action on septic tanks.

“We’ve got to step up to the plate and make this happen, like other counties are doing,” said Estero Mayor Bill Ribble.

The village approved a $60,000 agreement with Fort Myers-based Banks Engineering at a public meeting Wednesday for design and research on expanding water and sewer lines into areas of the village without those utilities. It is the start of a process that could lead to complete removal of septic systems in Estero, said Village Manager Steve Sarkozy.

“The village council is interested in moving this forward to seek elimination ultimately of these types of facilities that can only serve to contaminate some of our groundwater and the Estero River,” Sarkozy said at the meeting.

The agreement with Banks Engineering would study what infrastructure is needed to install the utilities and what the construction costs could be.

The planning work does not mean Estero will establish assessments to fund the transition of septic to water and sewer, said David Willems, the village’s public works director.

“We don’t want to pursue assessments when we don’t understand what the costs are,” Willems said.

The engineering work will occur simultaneously with another village study tied to the Estero River. Earlier this summer, the Estero council approved an FGCU research study that will monitor types of bacteria in the Estero River and where they come from. The study plans to test for human waste, nitrogen compounds, E. coli and other types of bacteria.

The village is in the process of considering an assessment policy that would allow property owners to petition the village for services, such as extending sewer lines into neighborhoods. Projects would be funded through assessments added to property taxes, according to the draft policy.

Eliminating septic tanks because of water quality concerns has been on the agendas for governments and lawmakers throughout the state.

The Naples City Council chose to move homes in certain neighborhoods to city sewer. The cost to connect 900 properties to the sewer system was estimated at $14 million in January.

Also this year, Gov. Ron DeSantis included phasing out septic tanks in an executive order that included other state water quality policies.

© 2019 Journal Media Group, Brittany Carloni

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Remote Workers Not Limited by City Boundaries

City workers often flee to the suburbs, and a growing number of remote workers are doing the same – but they’re heading to more affordable cities’ suburbs.

NEW YORK – More Americans with telecommuting jobs are choosing to leave the big city for a smaller, more affordable town, The Wall Street Journal reports. The growth of remote work opens up more options for employees when it comes to deciding where to live.

For example, Kelly Swift and her family left Los Angeles to move to a suburb of Boise, Idaho. She kept her job in health care information technology consulting – as well as the salary she earned in California – but Boise’s cost of living is about 35% less than Los Angeles, according to Bankrate.com.

This remote group of workers is “fueling a renaissance in U.S. cities that lie outside the major job hubs,” according to the Journal. “People who do their jobs from home, freelance or constantly travel for work are migrating away from expensive urban centers, such as Los Angeles and San Francisco, toward cheaper cities like Boise; Denver; Austin, Texas; and Portland, Ore.”

But as a result, some desirable, low-cost cities are going through growing pains: namely, fast-rising home prices and traffic congestion. Additionally, says Sheila Smith, a real estate professional in Boise, remote work arrangements may become less common if the economy enters a recession.

As a result, remote workers “are not necessarily joining the workforce” in their new smaller metro homes, and that could have a dampening effect on local economies, Smith said.

Some regions are banking on growing their populations by attracting remote workers. Vermont and Alabama, for example, have launched giveaways to attract telecommuters. In Tulsa, Okla., some remote workers are eligible for $10,000 in cash to relocate there.

Many of the largest U.S. cities are still seeing population growth, but the rate is slowing, says Jenny Ying, a data scientist at LinkedIn. An analysis by the job-focused social network shows an influx of remote workers moving from New York to Charlotte, N.C., and Orlando, Fla. They’re also moving from Chicago to Nashville, Tenn., and Indianapolis.

At the same time, they’re leaving Los Angeles for Las Vegas, and they’re fleeing San Francisco for Reno, Nev. Seattle workers are increasingly moving to Eugene, Ore.

“The livability crisis of certainly the West Coast and some of the East Coast are clearly a pushing factor,” said Mark Muro, a senior fellow at the Metropolitan Policy Program at the Brookings Institute.

Source: “Workers Are Fleeing Big Cities for Smaller Ones – and Taking Their Jobs with Them,” The Wall Street Journal (Sept. 7, 2019)

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CoreLogic: Mortgage Fraud Down 4% in Florida — but Still High

The U.S. saw an 11.4% decrease in mortgage fraud. By metros, South Florida continues to be the top U.S. hotspot for fraud, and six Florida cities are in the top-25 list.

ORLANDO, Fla. – CoreLogic released its latest Mortgage Fraud Report, which finds an overall 11.4% year-over-year decrease in fraud risk as measured by the CoreLogic Mortgage Application Fraud Risk Index – the first decrease since the third quarter of 2016.

In Florida, fraud risk dropped 4% year-to-year, according to the report. However, the state moved up one notch to No. 2 after the risk in New Jersey fell 21%. No. 1 New York remained at the top after its mortgage fraud risk grew 8%.

CoreLogic’s analysis of the top 25 U.S. metros for fraud risk found South Florida – Miami-Fort Lauderdale-West Palm Beach– as No. 1, with a 7% increase year-to-year. However, six Florida metros made the top 25:

1. Miami-Fort Lauderdale-West Palm Beach (309 on the CoreLogic Index)

5. Deltona-Daytona Beach-Ormond Beach (210)

6. Tampa-St. Petersburg-Clearwater (197)

9. Orlando-Kissimmee-Sanford (167)

12. Cape Coral-Fort Myers (163)

15. Jacksonville (157)

The analysis found that during the second quarter of 2019, an estimated one in 123 mortgage applications (0.81% of all applications) contained indications of fraud, compared with the reported one in 109 (0.91%) in the second quarter of 2018.

The CoreLogic Mortgage Fraud Report analyzes the collective level of loan application fraud risk experienced in the mortgage industry each quarter based on all residential mortgage loan applications processed by CoreLogic LoanSafe Fraud Manager. It considers six types of fraud: identity, income, occupancy, property, transaction and undisclosed real estate debt.

“The decrease in fraud risk mid-2019 appears temporary, based on unexpected interest rate drops and the resulting influx of low-risk refinance transactions,” says Bridget Berg, principal of Fraud Solutions Strategy for CoreLogic. “The absolute number of risky loans has not decreased but are simply part of a larger mortgage market at this time.”

Report highlights

  • For the first time since 2017, Florida outpaced New Jersey and moved into the second highest position.
  • Eight of the top 10 riskiest states showed stable or decreasing risk over the past year.
  • States with the greatest year-over-year risk growth: Idaho, Alabama, Mississippi, New York and Delaware.
  • States with the largest risk decreases: Kansas, Missouri, Massachusetts, Illinois and New Mexico.
  • Jumbo loans for home purchases is the only segment showing a risk increase.
  • Nationally, all fraud types showed decreased risk. Undisclosed Real Estate Debt fraud risk had the greatest decrease year over year, followed by decreases in Property and Income fraud types.
  • iBuyers – companies that use technology to instantly make an offer on a home – accounted for more than 1% of all home sales in 2018 and are a contributing factor in the overall decline of fraud risk.

© 2019 Florida Realtors®

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One of the Best Realtor Safety Tools? ‘Trust Your Gut’

Over 99% of the time, a crime victim will tell police, “I knew something was wrong,” “I knew better,” or “I had a bad feeling.”

CHICAGO – Tracey Hawkins, “the Safety Lady”: What if I told you that there is a tool that could prevent you from being victimized? What if I told you that you already possess such a tool?

As a former agent who now works in close contact with agents, I know how important tools of the trade are to your profession. I know that you love the latest and greatest technology tools. Those tools are an important component to operating your business. They can even help protect you. However, right now I want to discuss an important tool that should always be in your “toolbox,” especially when you’re working in what the Department of Labor classifies as a high-risk occupation.

From planning your safety strategy to extensive safety resources including apps, products, and educators, NAR has many useful items for all real estate professionals including regularly-scheduled safety webinars, videos and a safety alert program.

This tool issues a warning that tells you when you are about to make a dangerous mistake. This tool requires no batteries and is always “on.” What if I told you that this tool is free? You would be interested, right?

Gut. Intuition. Instinct. 6th sense. That funny feeling. A small voice.

No matter what you call it, it can save your life. Police officers and rape crises counselors state that when interviewing victims, over 99% of the time the victim will say, “I knew something was wrong,” “I knew better,” “I had a bad feeling,” and so on.

It’s important to note that trusting your gut is not about embracing prejudice. When you trust your gut, you’re acting on an instinct, a feeling that something is wrong. You may be in a vulnerable position such as at a showing alone, but there are ways to minimize your risk. For instance, always have someone you trust, like another agent, with you at the showing or leave someone detailed information about where you are and when you should return so they can call you if they feel like you’ve been gone too long.

Gavin de Becker, author of The Gift of Fear, wrote an entire book about trusting our gut instinct and believing in intuition. Having been a real estate agent, there were plenty of times when I felt fear and wondered why I was in an empty house with a complete stranger, or why I was driving strangers around in my car. Like you, I hushed that warning voice and focused on earning a commission.

Ignoring your gut can get you hurt, killed, assaulted or robbed while working.

As a safety expert, I often get questions about what is the right or wrong way to do the job. There are right ways to show and host open houses, specific safety techniques, but in situations where there are variables and no clear right or wrong answers, listen to your gut.

One of the most popular questions is: Which is correct, locking the door or not locking the door when showing? The answer is listening to your gut, trust your instinct. It will tell you what the right answer is for that situation (and actually any situation that you will find yourself in as agents).

According to Stacey Johnson-Cosby, a Reece and Nichols sales agent who works in Kansas and Missouri, her gut comes into play when she enters a house. She typically locks the door behind her. At one time her inner voice told her a potential problem may exist. Johnson-Cosby, a 25-year sales veteran says that sometimes the voice is more overwhelming, demanding that she lock the door. Other times, she doesn’t feel the serious need.

Real estate is a high-contact occupation, and with deals that often involve lots of money, it draws scammers out of the woodwork. These tips can help you survive.

Agents often assure me that they work in a “safe” part of town or never show after dark. Your gut – not the address nor time of day – will dictate when you need to be extra careful. Criminals have cars, (often very nice cars) and can go anywhere that you may be, even upscale neighborhoods (especially upscale neighborhoods). Don’t let your preconceived notions – for example, apparent affluence equals safety – get in the way of seeing criminals or potential criminal opportunities. Let your instinct guide you, not what you see or other prejudices you have.

Following your gut is not about making snap decisions about prejudices you have or the people around you, it simply means that when you feel unsafe in any situation, you remove yourself from that situation. Oftentimes, you will not understand why your gut is sending you fear signals. You can’t determine what is wrong. Don’t try. Instinct sees something before you realize it.

Don’t worry about being polite when your body tells you to flee and get out of a dangerous situation. Just go. Your safety is more important that hurting someone’s feelings. Prioritize.

Here are 3 things that you need to start doing today to respect that inner voice and to ensure that you are not victimized when you can avoid it:

  • Acknowledge that, like animals in nature, we all possess a gift that allows us to sense danger. However, we’re the only ones who routinely ignore it in the interest of being polite. We all have a built-in survival mechanism that is hardly ever wrong. Think about situations where you had a “bad feeling” or were uncomfortable. That was your gut warning you. Once you’re aware of what that feels like, be in tune with it and learn to recognize it. Don’t try to figure it out or to use logic. Just listen and escape the situation.
  • Respect that inner voice and act on it without questioning the validity. Once you get a bad feeling about a potential client, a showing situation or even strange behavior in an open house, believe that feeling. Do some research on all potential clients; find out who they are and if they are legitimate. However, background checks on clients and potential clients must be done consistently and should never be affected by the person him/herself. And then if you are unable to verify who they say they are, whether they really own the property, where they work or anything about them, be ready to let them go. Yes. Be willing to let a potential client go. You can’t put a price on working safely and just taking your chances and hoping that the bad feeling you get about these potential clients is wrong. Nothing is worth jeopardizing your safety.
  • Defend your right to put safety before politeness. Do not waiver from your safety practices just because someone else thinks they are silly. Johnson-Cosby says buyers often laugh when they’re leaving a house and find the doors locked. “I don’t mind. At least they know I take their safety seriously.” Crimes often happen when you relax regular safety practices out of convenience or embarrassment. “Just that one time” is often the time something goes wrong.

Source: National Association of Realtors®, Tracey Hawkins aka “Tracey, the Safety Lady” is a former real estate agent and has been teaching agent safety over the last 18 years.

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NAR: Mortgage Rates May Hit Record Low by Year’s End

Economist Lawrence Yun says a clearly weakening economy and “soft job gains in August assures that the Federal Reserve will be cutting interest rates.”

WASHINGTON – By the end of this year, the 30-year fixed-rate mortgage could drop to 3.3%, which would put the most popular loan product near its lowest average since Freddie Mac began tracking such data 48 years ago.

Lawrence Yun, chief economist for the National Association of Realtors® (NAR), made that prediction after seeing the Labor Department report released late last week, that showed a slowing job market.

“The economy is clearly weakening, and the employment conditions show a lagging indicator,” Yun says. “The soft job gains in August assure that the Federal Reserve will be cutting interest rates.”

Economists expect that the Fed’s will cut interest rates by another quarter-point at its next meeting on Sept. 17. The Fed’s benchmark rate doesn’t directly impact long-term, fixed mortgage rates, but it can influence their direction. A weakening economy, coupled with moves by the Fed to lower interest rates, likely will cause mortgage rates to fall as well, economists say.

If the 30-year fixed-rate mortgage reaches Yun’s predicted 3.3% average, that would sit slightly above the lowest-ever recorded average of 3.31% set in November 2012, according to Freddie Mac.

“But lower rates may not help with affordability because home prices are re-accelerating higher – easily above the latest wage growth,” Yun adds. Inventory shortages also continue to push home prices up.

While housing inventory has eked out small gains in recent months, it’s still “putting upward pressure on home prices of moderately priced homes,” Yun says. “But there is still time to get the economy into a higher gear with increased home building of affordable homes and lessening trade tensions.”

For the first week in September, the 30-year fixed-rate mortgage averaged a three-year low of 3.49%, according to Freddie Mac.

Source: “NAR’s Yun: Mortgage Rates May Tumble to Record 3.3% by 2019’s End,” HousingWire (Sept. 6, 2019)

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Reclaimed Wood a Hot Accessory in New Homes

More homeowners are using reclaimed wood from barns, factories and log cabins to decorate modern homes – everything from ceilings and flooring to window accents.

NEW YORK – More homeowners are using reclaimed wood from barns, factories and log cabins to decorate their modern homes, The Wall Street Journal reports. They’re using the reclaimed wood to decorate everything from ceilings and flooring to window accents.

“They want it to look as primitive as possible,” Klaas Armster, co-author of the upcoming book Reclaimed Wood: A Field Guide, told the Journal.

Old-growth timber is no longer available in the U.S. construction industry. Suppliers today use wood from trees cultivated to grow fast that can be quickly processed into timber. Homeowners looking for antique wood from mature trees are calling on wood-reclamation companies to look for planks to reuse. They can be costly. Large structures of wood can cost anywhere from $300,000 to $1.5 million. On a smaller scale, homeowners may find costs much lower, such as $55,000 to use reclaimed accents on their kitchen or living room ceilings.

Charles Preston used antique timbers reclaimed from an 1800s Vermont barn for a vacation home he built with his wife several years ago in Texas Hill Country. The couple used the wood on the living room and kitchen ceilings, as well as to decorate interior and exterior lintels over the windows. He told the Journal that the reclaimed wood became a focal point in their home.

Preston also says that in the 7,000-square-foot, five-bedroom home, they also have a dining room ceiling adorned with 1900s oak fencing from Minnesota and exterior siding made of hemlock that was reclaimed from Midwest barns built from the 1850s to the 1900s. “That’s the first thing people talk about,” Preston says.

Chestnut barn frames from the 18th and early 19th centuries are a big draw, James Dixon, an architect in Chatham, N.Y., told the Journal. “If you find a chestnut frame, that’s like gold,” he says.

Source: “Homeowners Get into the Groove of Reclaiming Old Wood,” The Wall Street Journal (Sept. 5, 2019)

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Is a ‘Cowboy Lifestyle’ with Trophy Ranch Gone Forever?

Boomers grew up watching cowboy movies and bought luxury ranches as they aged. But more are now coming to market and younger Americans aren’t as interested.

NEW YORK – Baby boomers grew up watching western TV shows like “The Lone Ranger” and “Howdy Doody,” and those programs may have influenced a wave of John Wayne-loving homeowners to buy cowboy ranches of their own.

But as baby boomers age, more trophy ranches are coming to the market, Westerns aren’t as popular, and younger generations aren’t showing the same desire to take the reins.

There is currently an oversupply of ultraluxury ranches. More trophy ranches are for sale today than at any point during Jeff Buerger’s three-decade career as a ranch broker with Hall & Hall in Colorado, he says – about 20 ranches priced at more than $20 million are available in the state, and some have sat on the market for years.

“If you look back to the ‘70s and ‘80s, there were these guys raised with this mythology of the West,” Ken Mirr, a ranch broker, says. “It was attachment to something Hollywood produced. Their children aren’t always as interested in operating the properties. Sometimes the kids see cows and think, ‘What should I do with this?’”

The ranches on the market may cover expansive mountains, forests, rivers, fisheries and big-game-hunting facilities. Operating costs can sometimes be in the millions annually. A declining price in beef has been causing many ranchers to lose money in operations in recent years, too.

Ranch sellers find that patience is key. Ranches, unlike other sectors of high-end real estate, don’t tend to attract international purchasers.

Some ranchers are targeting conservationists, as the cowboy fascination loses its appeal.

“You’re starting to hear more landowners talking about wildlife habitat enhancement and ecological work,” says Buerger. “At the end of the day, land is the one thing that can never be reproduced. It’s always going to be a great place to park capital.”

Source: “Baby Boomers Are Leaving Behind a Trail of Luxury Ranches,” The Wall Street Journal (Aug. 22, 2019) [Log-in required.]

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Consumer Borrowing Posts Biggest Gain Since Late 2017

If consumer spending drives the U.S. economy, there was little to worry about in July if an increase in borrowing translates into more goods and services.

WASHINGTON (AP) – Consumer borrowing surged in July at its fastest pace since late 2017, driven by a big jump in credit card use.

Consumer borrowing increased by $23.3 billion in July after a $13.8 billion advance in June, the Federal Reserve reported Monday. It was the biggest monthly gain since a $29.9 billion jump in November 2017.

The large July gain was led by a sizable increase in borrowing in the category covering credit cards, which rose by $10 billion in July after having fallen by $186 million in June.

Borrowing in the category that covers auto and student loans also posted a sizable gain, rising by $13.3 billion in July following a $14 billion June increase.

Consumer borrowing is closely watched for signs it provides about consumer spending.

The economy has encountered headwinds this year in areas such as manufacturing and export sales, reflecting uncertainties caused by President Donald Trump’s trade war with China and a slowing global economy.

But those adverse shocks have been cushioned by strength in consumer spending, which accelerated in the spring to the fastest pace in five years after a weak start to 2019. Consumer spending accounts for about 70% of U.S. economic activity.

Economists are looking for household spending to continue to be solid for the rest of this year, helped by rising wages and the lowest unemployment rate in nearly a half century.

The overall economy, as measured by the gross domestic product, grew at a 3.1% rate in the first quarter, reflecting some special factors, but slowed to growth of 2% in the April-June quarter. Economists are forecasting GDP growth will average around 2% in the second half of this year.

The July increase pushed total consumer credit to a record $4.1 trillion. The Fed’s monthly credit report does not cover mortgages or any other debt secured by real estate such as home equity loans.

Copyright 2019 The Associated Press, Martin Crutsinger. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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