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Sept. New Home Sales Fall 3.5% After Strong Summer

Despite the modest decrease, new-home sales are up 32.1% year-to-year, and the industry bounced back this summer following a late-spring pandemic shutdown.

CHARLOTTE, N.C. (AP) – Sales of new homes fell by 3.5% in September to a seasonally adjusted annual rate of 959,000 million units, the Commerce Department said Monday, as the housing market’s hot summer buying season cooled.

The Commerce Department said Monday that despite the modest decrease, sales of new homes are up 32.1% from a year earlier. However, the pandemic may start to weigh on the market as the colder winter months arrive and with coronavirus cases spiking across much of the U.S.

“While strong demand and low mortgage rates are supportive of home sales, the resurgence in Covid-19 cases, a recovery that may be shifting into reverse and a weak labor market pose downside risks,” said Nancy Vanden Houten with Oxford Economics, in an email.

The housing market, like most of the economy, came to a near standstill in March and in April, causing the typical spring summer buying season to be delayed until the summer. Once economies reopened, pent-up demand translated into sales of both new and existing homes, driving home prices in many places to record highs. In July, home sales spiked 13.9%.

The July figures may have been the top of the housing market. New home sales for August were revised downward to 994,000 from a previously reported 1.01 million units.

The median price of a new home sold was $326,800, according to the Commerce Department.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Keep Your Credit Profile Healthy During the Pandemic

Many people are worried about credit scores these days, and federal support programs have largely improved U.S. credit scores – but things could change quickly.

NEW YORK – Credit may not be top of mind for many consumers these days. But as the pandemic and its associated economic woes drag on, they may want to give it some attention.

COVID and credit

The good news is that consumers, by and large, improved their credit profile during the pandemic, despite record unemployment and massive business shutdowns.

The support programs that were put in place worked. Helped by federal stimulus payments, expanded unemployment benefits, lender relief agreements and a shift in habits, Americans used less credit, paid down debt, made fewer late payments and improved their credit scores. The average FICO credit score was 711 in July, up 5 points from a year earlier, according to Fair Isaac, the company behind the score. A FICO score runs from 300-850 and is one of the most widely used metrics to determine a consumer’s credit worthiness.

“It definitely feels like many consumers have taken a cautionary step in terms of saving and spending,” said Matt Komos, vice president of research and cConsulting at credit reporting agency TransUnion. “I think there is a general cautiousness among the American consumer.”

The bad news is consumers’ financial health could be heading for a downturn soon. Some relief measures are expiring or have concluded and Congress has yet to reach agreement on a new relief package; meanwhile the job market and economic recovery remain fragile.

Credit profiles don’t yet reflect those developments. There’s typically a lag time between a major economic event and when it’s reflected in the credit files of Americans.

For example, during the Great Recession, the average national FICO score didn’t hit its lowest point until late 2009, months after the recession officially ended, wrote Ethan Dornhelm, vice president of FICO Scores and Predictive Analytics, in a blog Monday. In the case of the COVID-19 pandemic, it could be a significant lag because of the extraordinary steps taken to help consumers.

TransUnion said it is seeing a slight increase in 30-day late payments, potentially an early indication that borrowers are under financial duress and could default. This measure increased modestly in August for the two largest payments most consumers face – auto and mortgage.

“I think the full impact of the pandemic on their credit isn’t known yet and that is what worries me,” said Paul Golden spokesman for the National Endowment for Financial Education.

New credit normal

Consumers should be aware that some of the rules surrounding credit have changed, and keep in mind that the decisions they make to survive these tough times will impact their financial future.

For one thing, checking a credit report has gotten easier. As part of a massive relief package passed by Congress, known as the CARES Act, consumers can check their credit report from the three credit reporting agencies weekly for free online at annualcreditreport.com. This expanded access is available through April 2021.

Additionally, consumers who reached some sort of relief agreement with their lender due to COVID-19 – such as forbearance, reduced payment or other arrangement – generally should not see their credit score worsen.

The CARES act requires that accounts that were in good standing before any COVID-related relief accommodation was made will remain in good standing. Those that were delinquent cannot sink further but can be made current. This rule stays in place until 90 days after the national emergency for COVID-19 ends.

However, if you do not strike a relief agreement of some form, any late payments or other negative steps will still be reflected on your credit report.

If you are in a relief agreement but feel it has been reported improperly, reach out to your lender and the credit agencies.

Keeping credit healthy

Consumers who are struggling should seek help from their lender as soon as possible.

TransUnion estimates about 10% of consumers are using at least one form of relief accommodation already. But experts say many people who are eligible for help have not sought assistance yet.

Consumer finance and credit experts urge people to get help where they can. Make sure to ask questions about the terms, such as how long the assistance will last, if interest will be accrued, or if late fees may still apply. And how your agreement will be reported to the national credit reporting agencies.

Consider adding a statement to your credit report to explain any negative activity. A COVID-related job loss or illness could help explain a period of late payments.

Exit plan

Any assistance you get will not last forever.

Stabilize your household’s finances as much as possible with relief opportunities and then reassess to come up with a longer-term plan. If you have run out the clock on a relief agreement, seek an extension if needed. If you need further help, consider talking to a nonprofit credit counselor. The Financial Planning Association and many other certified financial planner organizations are offering free assistance to those impacted by COVID-19 as well.

Beverly Anderson, president of Global Consumer Solutions at Equifax, said that everyone’s credit situation is unique. All the same, she reminds consumers of the basics for healthy credit: establish and maintain responsible credit habits, like paying bills on time; pay off debts as quickly as possible; apply for credit sparingly and keep your balances well below their limits.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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Hate Masks Because Your Glasses Fog Over? Try This

The little things often frustrate us the most. For Realtors who must wear glasses, the masks with small metal strips at the top work best to avoid glass fogging.

NEW YORK – Many real estate professionals wear a mask most of the day as they meet with clients, and a few annoyances may be getting in the way of making this pandemic safety consideration comfortable.

One of the most common gripes: “My glasses fog up!”

Here’s why it happens: “The hot air from your breath escapes from the top of your mask and lands on the cooler surface of your lens,” says Dr. Marie Budev, a pulmonary medicine specialist at the Cleveland Clinic.

Foggy glasses tend to occur when a mask doesn’t fit well.

Consumer Reports says the fix for this is to find a mask with a metal wire sewn over the top – the part that fits on the bridge of your nose. Pinch the top of the mask so it fits the shape of your nose. Tighten the sides of the mask by adjusting the straps. As long as the mask fits snugly, glasses shouldn’t fog up.

Medical tape can also be used on the bridge of the nose to close the gap between a nose and the mask. Also try anti-fogging sprays designed for glasses. Even washing glasses with soap and water before putting them on could prevent the fog, though some soaps can harm the coatings on the lenses.

Another common gripe related to mask wearing: “I can’t hear or understand the other person.”

A mask is “a physical barrier that blocks sound, and when a mask touches your lips, it can cause speech to be mumbled,” Dr. Douglas Hildrew, an ear, nose and throat specialist at the Yale School of Medicine, told Consumer Reports. “Human beings are emotional creatures, and even if we don’t lip-read, we get a lot of information from visual cues, like whether a person is smiling or their facial expression.”

Experts say that when you’re wearing a mask, speak slowly and clearly so others can understand what you’re saying. You needn’t speak louder, they say.

Source: “How to Fix Your Annoying Mask,” Consumer Reports (Aug. 12, 2020)

© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688

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Study: Black Homeowners Pay $13K More on Their Mortgages

According to a study done by MIT, Black borrowers pay $13,464 more than white borrowers over the life of a home loan, which includes interest, insurances and taxes.

BOSTON – According to a new study from the Massachusetts Institute of Technology (MIT), Black borrowers pay $13,464 more over the life of a home loan, with interest, mortgage-insurance and tax expenses higher than for their white counterparts.

The biggest reason for the gap? Risk-based pricing found in most U.S. mortgages disadvantages Black borrowers because they tend to make smaller down payments and have lower credit scores, according to the report’s authors. The lower down payment also results in more Black homeowners paying mortgage insurance.

The study intentionally didn’t control for factors such as income disparities to show the difficulties Black people face due to historical disadvantages. While lower down payments and credit scores also tend to lock Black homeowners out of refinancing opportunities when interest rates fall, they don’t benefit from being at lower risk of prepayment, which also costs lenders.

Even though FHA-backed mortgages don’t use risk-based pricing, Black homeowners still pay more for those loans because some of the banks originating them add on a so-called servicing-risk premium, arguing that more resources are needed to deal with missed payments or defaults.

Those higher mortgage expenses could had been spent elsewhere, and the MIT researchers said it could have resulted in $67,320 in lost retirement savings for Black Americans – inequities which “make it impossible for Black households to build housing wealth at the same rate as white households,” according to the study.

Source: Bloomberg (10/19/20) Orman, Yalman

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ACA Healthcare Open Enrollment Begins Nov. 1

Unlike 9-5 employees, Realtors’ independent-contractor status makes finding health coverage a bit challenging. However, open enrollment for qualified health plans starts Nov. 1 and ends on Dec. 15, and NAR has resources to help Realtors find plans that best match their needs.

WASHINGTON – Open enrollment for ACA (Affordable Care Act) qualified health plans starts Nov. 1 and ends Dec. 15, 2020, for coverage that begins on Jan. 1, 2021. As of Monday, however, people who need to sign up for health coverage or renew can start to review their options on the government’s official ACA website, healthcare.gov, according to a release by the Centers for Medicare & Medicaid Services (CMS).

The National Association of Realtors® (NAR) also offers the Realtors Insurance Place, which can help association members navigate the range of coverages available. The Insurance Place also provides access to qualified ACA major medical insurance plans.

According to NAR’s website, members can “research health insurance information, obtain quotes, compare plans and purchase directly online.” Policies are all “Affordable Care Act qualified plans from top-rated insurance carriers.” NAR’s service includes consultation services, and it’s available year-round. The types of policies offered are:

  • HMOs (Health Maintenance Organization)
  • PPOs (Preferred Provider Organization)
  • High Deductible (catastrophic) health plans
  • Health Savings Account qualified health plans

How to shop for a plan

Window shopping for insurance plans helps consumers and the people who assist consumers, such as licensed brokers and navigators. At this point, people can browse plans without logging in, creating an account or filling out an application.

In general, the cost for many policies has declined, though that can vary by location. The average cost of the second-lowest-cost silver plan (benchmark plan) is 8% cheaper than it was in 2018.

Beyond cost, consumers also have more options, according to CMS, because insurer participation has increased for the third year in a row. Only 4% of healthcare.gov visitors today have only one choice of insurer; in 2018, it was 29%. CMS says 75% of visitors this year can choose from at least three insurance carriers.

“Building on our success in decreasing premiums and increasing choice, we’ll be working through the upcoming open enrollment period – the time for consumers to enroll in health insurance through HealthCare.gov – to ensure a smooth user experience,” says CMS Administrator Seema Verma.

Starting Nov. 1, consumers can log in to HealthCare.gov or CuidadodeSalud.gov or call 1-(800) 318-2596 to fill out an application and enroll in a 2021 Exchange health plan.

Resources:

© 2020 Florida Realtors®

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Wary Cannabis Investors Get New Entry Point – a REIT

A publicly traded Real Estate Investment Trust (REIT) will focus on the cannabis industry. The REIT status provides tax benefits and can unlock capital.

NEW YORK – This month, cannabis will get another publicly traded real estate investment trust – a sign of how the industry is growing up.

Subversive Real Estate’s merger with Inception REIT is part of a $183 million transaction to turn the special purpose investment vehicle into a real estate investment trust, giving it tax benefits and readying it to acquire more properties. The transaction, expected to close at the end of this month, will make it the second publicly traded cannabis REIT, following Innovative Industrial Properties.

The deal bodes well for both cash-starved cannabis companies and investors who want an in to the fast-growing industry – but are skittish about the perceived taint of marijuana. It lets cannabis companies that can’t get bank loans sell real estate and lease it back, giving them a shot of cash that can be used to improve their products. Investors, meanwhile, get a new “cannabis adjacent” asset to invest in.

“We unlock capital for operators,” Subversive Chief Executive Officer Richard Acosta said. Amid the pandemic, cannabis firms are more focused on efficiency, he said, and his company aims to help them achieve that by taking “hard assets off the balance sheets.” They can then use the cash to produce more or ramp up production.

One company, Flower One Holdings, got a $39 million, seven-year term loan at 10.5% in exchange for Subversive’s option to buy a 455,000 square-foot cannabis cultivation and production facility in North Las Vegas, Nevada.

These sale-leaseback deals are gaining traction. Major multi-state operator Curaleaf Holdings Inc. just sold a Florida property, and will offload another in the fourth quarter. Jushi, Columbia Care and Cresco Labs have also recently done sale-leasebacks.

“I always thought that consumer-goods companies didn’t need to own real estate,” Curaleaf Chairman Boris Jordan said in a phone interview. “And we’re not a real estate company. Our business is manufacturing branded cannabis.”

A recent E&Y survey found that, as a result of COVID-19, 78% of executives at large companies across industries expect to divest assets within the next two years.

And as the performance of one cannabis REIT shows, there’s plenty of interest in cannabis companies’ real estate. Unlike other commercial real estate like restaurants and hotels, battered by COVID-19, cannabis properties may have better prospects since dispensaries have stayed open in lockdowns, and the industry will need to expand if new states legalize.

Now, it just remains to be seen – in the flip-side world of cannabis – how these financial instruments distribute risk. That’s because most real estate is viewed as a hard asset that generally increases in value, although the global pandemic has created some disruption this year in property values. But with cannabis, legal issues are a wild card.

If marijuana becomes federally legal, companies might no longer need to grow their products in the same states they sell them. This would mean that cultivation plots and processing facilities in multiple states could suddenly become redundant.

Subversive, Acosta said, has taken this into account by buying only the properties that it sees as the most attractive, or those with potential alternative uses.

Flower One’s facility in Nevada, for example, is the largest in the state, he said. “It is a future-proof asset in our view.”

© 2020 Bloomberg L.P., 2020 Penton Media

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What to Do with Old Tech? Repurpose It

An old digital camera can become a security camera. An old laptop could run marketing videos on a loop during open houses. An old smartphone can become a video feed.

SAN FRANCISCO – As you replace phones, tablets, and laptops with the newest models, don’t just toss outdated gear into a dusty drawer. Wired.com recently highlighted ways to repurpose old tech for everything from security cameras to e-readers.

An old smartphone can provide an always-on video feed that another phone can tap into. It can be used as a security camera monitoring your own home or on showing appointments if you have access to Wi-Fi. Existing software can turn a phone into a security camera. Tablets can be repurposed too.

An old digital camera can be used as a webcam to improve the video quality of Zoom calls. You’ll also be able to position your webcam from an angle as opposed to relying on the straightforward cameras that are built into your laptop or computer screen. Camera makers such as Sony, Canon and Fujifilm have programs and guides to help.

Old laptops can be repurposed as media centers for videos and music that also saves hard drive space on a new laptop. Try programs such as Plex or Kodi for storage solutions, Wired.com suggests.

Or turn an old tablet into a digital photo frame to show off photos during home showings. Keep it plugged in and propped up. Explore third-party apps, including Fotoo for Android tablets and LiveFrame for iPads, for digital photo frame tools.

Wired.com offers other recommendations for repurposing old tech.

Source: “How to Repurpose Your Old Gadgets,” Wired.com (Oct. 18, 2020)

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4 Appraisal Groups Agree to Fight Unconscious Bias

The Appraisal Institute, American Society of Appraisers and two other groups collectively support additional training that addresses unconscious bias in valuations.

CHICAGO – The Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers, and the Massachusetts Board of Real Estate Appraisers announced collective support for developing additional training that addresses unconscious bias in valuation. Each group plans to individually review its Code of Ethics and other governing documents to further ensure members’ awareness and compliance.  

“During this important time in our nation’s history, our organizations stand together to enhance existing training and ethics initiatives and work even harder to ensure that the appraisal process is free of bias or discrimination of any kind,” Appraisal Institute President Jefferson L. Sherman, says.  

Specifically, the organizations pledge to develop appraiser training programs that cover unconscious bias issues and increase awareness by connecting the appraisal community with thought leaders on bias and discrimination.  

“Acknowledging that bias exists is but one small step,” says American Society of Appraisers International President Lorrie Beaumont. “Together with our partners, we commit to doing the hard work of educating our members about the various ways that bias can affect their work and provide them the tools necessary to overcome bias. By doing this as a profession – and not merely as individual organizations – we hope to underscore to our members and the public just how important this issue is to all of us.” 

Each of the organizations also committed to enhancing their respective Code of Ethics to more overtly address bias and discrimination issues with protected classes.  

It’s not the first time the professional organizations have worked together. Earlier this year they collectively addressed COVID-19 pandemic appraisal and policy issues that faced the valuation profession. 

© 2020 Florida Realtors®

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4 Ways to Increase the Chances of Getting a Mortgage

To help get your mortgage or refi OK’d while interest rates are at an all-time low, check your credit score and report, pay down debt and compare mortgage lenders.

WASHINGTON – The coronavirus pandemic has made a huge dent in the U.S. economy, but mortgage interest rates are at an all-time low. It’s no surprise then that in 2020, existing-home sales hit their highest level since 2006, according to the National Association of Realtors®.

That said, because of the economic downturn, many home lenders have tightened their underwriting criteria, showing some caution about who they’re willing to lend to. So, even if you meet the minimum requirements to get a mortgage, it may still be tough to qualify.

If you’re hoping to buy a new home or even refinance your existing mortgage loan, here are four things you can do to increase your chances of getting approved:

  • Check your credit score and report
  • Shop around and compare mortgage lenders
  • Pay down debt
  • Avoid taking on new debt

1. Check your credit score and report

Your credit score is a key indicator of your overall credit health. Use a free service like Experian or Discover Credit Scorecard to get free access to your FICO credit score, which is widely used by lenders – you may even already get free access through your bank or lender.

Due to the pandemic, the three national credit bureaus are offering one free credit report per week through April 2021 – normally, you can only get a free credit report from each bureau once every 12 months. Visit AnnualCreditReport.com to get your copy.

What is a subprime credit score?

If you have bad credit, you should research ways to boost your credit score ASAP. Improving your credit score doesn’t have to be a difficult task. Here are some simple ways to improve:

  • Pay bills on time
  • Get caught up on past-due payments
  • Pay down credit card balances
  • Keep a low balance
  • Dispute any errors or inaccurate information on your credit card report

2. Shop around and compare mortgage lenders

Each lender is different, not only in how they underwrite mortgage applications but also in how they assign interest rates. So, while one lender may reject your application, another may be more than willing to finance your home purchase.

The more mortgage lenders you compare, the better your chances of finding one or more lenders who will work with you. You’ll also improve your odds of getting the lowest interest rate that’s available to you.

Filling out applications with multiple lenders can be time-consuming, so consider using an online marketplace like Credible to shop around and compare offers from multiple lenders in one place.

3. Pay down debt

While your credit score is a key indicator of whether you qualify for a mortgage, another crucial element is your debt-to-income ratio (DTI), or the percentage of your monthly gross income that goes toward debt payments.

Many mortgage lenders prefer that your total DTI stay below 36%, and your front-end DTI, which only includes housing costs, to be no more than 28%. While some may go higher than those thresholds, the lower your ratio is, the better.

To maximize your efforts, focus on loans and credit cards with the lowest balances that you can pay off quickly. Even a small reduction in your DTI could make a huge difference.

4. Avoid taking on new debt

A mortgage loan is a major financial commitment, both for you and the lender, so it’s natural for lenders to be sensitive to other debts that could make it difficult for you to keep up with your monthly payments. As you get your credit mortgage-ready, apply for a loan, and go through the home buying or refinancing process, it’s critical to avoid applying for other credit accounts.

If you expect to need a loan or credit card, complete that process six or more months before you submit your mortgage application.

What credit score do you need to buy a house?

What are today’s mortgage rates?

Mortgage rates have dropped significantly in 2020, but between August and September, they’ve remained somewhat flat. Unlike shorter-term loans, mortgage rates don’t have a strong tie to the prime rate or federal funds rate.

However, they are influenced by 10-year Treasury Notes and inflation rates, both of which have been relatively low in 2020. Here are the latest average mortgage interest rates for the week of Oct. 8, according to Freddie Mac:

  • 30-year fixed-rate mortgages: 2.87%
  • 15-year fixed-rate mortgages: 2.37%
  • 5/1 adjustable-rate mortgages: 2.89%

Based on the current mortgage and refinance rates, it may be a good time for you to refinance.

How does the Fed rate cut affect your mortgage and credit cards?

If you’ve been thinking about buying a home or refinancing your mortgage loan, now is an excellent time to do it. There are even options with a low-down payment if you don’t have a sizable savings account balance – though a lower down payment may result in private mortgage insurance.

Before you submit your mortgage application, however, it’s important to make sure you’re a good candidate for a loan. If you have bad credit, existing debts or more -make sure you do the above to improve your odds of getting approved. Check your credit score and work on paying down credit cards and other low-balance debts.

Also, make sure to avoid new credit applications several months before you file a mortgage application, as well as during the homebuying process. And to ensure that you get the best rate available, shop around. You can also get in touch with experienced loan officers and get all of your mortgage questions answered.

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Nation’s Top State for Wire Fraud? Florida

Fla. has over two times more wire-fraud incidents than No. 2 Georgia. In real estate, scammers entice buyers to wire closing money to a fake address, dashing buyers’ dreams and robbing Realtors of commissions. The FTC now has a dedicated website for reporting wire fraud.

WASHINGTON – Florida has more reported cases of wire fraud than any other U.S. state, and the real estate version of wire fraud can rob buyers of their dream home and Realtors of their commission. And, in most cases, the crime is discovered on the day of closing.

To help fight wire fraud, the Federal Trade Commission (FTC) created a dedicated website to report crimes. The website, ReportFraud.ftc.gov, gives consumers an easy way to report fraud and other consumer issues directly to the FTC. The agency hopes that the website will lead to faster and more comprehensive reporting that will, in turn, help it fight wire fraud.

FTC doesn’t want to hear just about successful crimes – it also wants to hear about crimes caught early enough that the scammers didn’t get any money. It says the ReportFraud.ftc.gov website gives consumers a streamlined, user-friendly way to submit reports about scams, frauds and bad business practices.

Reporting wire fraud doesn’t just help the consumer, the FTC says. It also helps all Americans if the U.S. can better fight cybercrime.

“Every time you report scams or bad business practices to the FTC, you’re helping to protect your community,” says Andrew Smith, director of the FTC’s Bureau of Consumer Protection. “With ReportFraud.ftc.gov, it’s quicker and easier than ever to share your story, and each report helps the FTC, and other federal, state and local law enforcement agencies, fight fraud.”

One new feature of the site: Consumers who file a report will receive “next steps” from the FTC with advice on what to do based on their particular report. In addition, the FTC has general consumer information on the website, including a new video explaining how the site works.

The site takes the place of the FTC Complaint Assistant, though consumers who visit the old Complaint Assistant will now be redirected to ReportFraud.ftc.gov. To read or submit a report in Spanish, consumers should go to ReporteFraude.ftc.gov.

© 2020 Florida Realtors®

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Knock Brings Home Swap Service to Orlando, Tampa

It’s the service’s first entry into Fla. Knock uses expected equity (at least 30%) from a home sale to guarantee a buyer’s new mortgage before the original home sells.

ORLANDO, Fla. – It’s an old dilemma: “Do I sell my house first and move in with the in-laws, or do I buy my new house first and worry if the old one will sell in time?”, tech entrepreneur Sean Black asked.

Black is the founder and CEO of Knock, one of the latest names in internet-based real estate sales. On Tuesday, Knock will debut its Home Swap service in Orlando and Tampa, making them the first Florida markets to fall under the company’s umbrella.

Launched in July in Atlanta, Dallas and Phoenix, the Knock Home Swap uses the expected equity from a home sale to guarantee a mortgage for a new home before the old home sells. Knock will loan buyers the money to make repairs on the home they are selling and cover the mortgage on the old home for up to six months or until it sells. The seller then pays Knock with proceeds from the sale of their house.

Orlando has attracted several online home buyer services in the past two years, including Offerpad, Opendoor and Zillow. Black, 48, says it’s because Central Florida cities are attracting people away from major cities.

“The home stock in those cities looks a lot like it does across America in the secondary cities,” he said.

Knock looks for markets where a majority of homeowners or potential sellers have 30% equity in their homes, at least enough to cover the loans for the down payment on a new home. Knock then gets a mortgage preapproved to find a new home, allowing them to essentially make a cash offer on a house.

Knock works with real estate agents in the market to determine how best to show the house they’re selling, including lending the owners up to $25,000 to make repairs.

Users of Knock can search for homes between markets. For example, a home seller in Orlando can use Knock to purchase a home in Phoenix, and vice versa.

With the addition of the Orlando and Tampa markets, Knock Home Swap is now available in nine cities around the country. They aim to be in 11 before the end of the year and 21 by 2022.

A founder of the real estate information website Trulia, which merged with Zillow in 2015, Black created Knock in 2017, using a model they originally called the Home Trade-In, where Knock purchased the new home for the seller and then allowed the seller to buy the house from them once the old house sold.

Black said these types of online services help balance the convenience equation for buyers and sellers.

“The internet was made to automate a lot of this stuff and make transparent a lot of this stuff,” he said. “None of that happened for sellers. It all happened for buyers.”

© 2020 The Orlando Sentinel (Orlando, Fla.). Distributed by Tribune Content Agency, LLC.

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RE Q&A: Does HOA Board Have to Vote on Every Expenditure?

Authority can be delegated to a manager, president or other person to spend money – usually up to a set amount – without board approval, but there are steps to follow.

STUART, Fla. – Question: Our board does a lot, and I am proud we consider and vote on almost everything. The problem is we spend a lot of time voting on small expenditures such as office supplies. Is there a legal way to make this easier? – R.R., Jensen Beach

Answer: I routinely make the statement you can delegate authority, but you can’t delegate responsibility. This means the board can delegate authority to the manager or the president or any other person to spend money without further board approval. Many clients will authority the manager to spend up to, say, $500 without needing to get board approval. This makes the process more efficient because you don’t need board approval to purchase a box of paper clips. In some communities, $500 would be way too high, and others have a comfort level of delegating much more. You will also find many management contracts authorize the manager to spend up to certain dollar amount without board approval.

There are two points. First, how do you do this? If you are going to delegate authority to spend money, first make sure your documents do not prohibit this practice. Then, make sure the board delegates this authority at an open meeting with 48 hours posted notice. You want the minutes to reflect the dollar amount in the motion itself. Owners should be able to comment on the delegation before the board votes on the motion.

Second, the board needs to realize it is ultimately responsible for the use and potential abuse of this authority. If the board does not have any internal controls, does not periodically review the financial statements and ignores abuse of this delegated authority, then it could be negligent even though it properly delegated the authority at the onset.

In other words, if you delegate authority, it is important to keep internal controls to ensure the authority is not being abused.

Question: One of our residents has a dog that is not a pit bull, but it is extremely aggressive and has bitten owners and their pets a few times. The owner is also adversarial and aggressively defends the dog to the point where owners are fearful to file a complaint. These owners are looking to the HOA to do something. What can we do? – M.D., Stuart

Answer: The first recommendation is to urge these residents to file a complaint with local animal control. Most community leaders are neither equipped nor trained to directly intervene and provide guarantees of physical safety. That is why there is animal control, and the board should urge residents to file the complaint with the local agency that is trained and equipped to respond.

Next, you should discuss this issue with your counsel. Although the owners of pets are responsible for damages caused by their dog, the analysis is different when the attacks are occurring on common areas such as streets, sidewalks and community centers where the association has a duty with respect to premises liability. Counsel would want to review your specific HOA covenants because documents vary greatly on this issue.

Some documents regulate pets but do not specifically regulate what happens when there is a dangerous dog. This is important because animal control may only require a quarantine of the animal when removal of the animal is the desired result. A well drafted document will provide the board with some discretion to determine when an animal must be removed (which can be a different standard than Florida Statutes addressing dangerous dogs) and provide a legal remedy to remove the dog. Depending on the severity of the attacks, this may require the association to offer to mediate with the dog owner, but eventually you may need to approve a lawsuit for injunctive relief to remove the dog from the community.

If litigation is required, the association would generally recover its attorneys’ fees and costs to compel removal of the pet.

It is important, however, to remember you will need evidence in court. If the owners are fearful to file a police report, fearful to seek medical attention and provide medical records, and fearful to discuss the issue, then you may find it difficult to procure sufficient evidence in litigation to remove the dog. This should not be a deterrent, but you should be cognizant that having a dangerous dog is not always the same as proving you have a dangerous dog. This is why it would be important to work closely with legal counsel to understand the details of the various legal proceedings.

John C. Goede Esq. is co-founder and shareholder of the law firm of Goede, Adamczyk, DeBoest & Cross, PLLC. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

© 2020 Journal Media Group, Treasure Coast Palm

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Fla.’s Housing Market: More Sales, Rising Median Prices in Sept.

Florida Realtors’ data: Sales, median prices, new pending sales and new listings rose year-over-year. Single-family sales up 22%; condo sales up 25.3% – and in a milestone, 2020 single-family sales over last 9 months beat the same timeframe in 2019, says Chief Economist O’Connor.

A strong September signals that we will likely continue to see strong sales this fall as mortgage interest rates remain at or near record lows.

ORLANDO, Fla. – In September, Florida’s housing market reported more closed sales, more new pending sales, rising median prices and more new listings compared to a year ago despite the ongoing pandemic, according to Florida Realtors® latest housing data. Single-family existing home sales rose 22% compared to September 2019.

“Florida’s housing sector continues to be a bright spot for the state’s economy amid the ongoing pandemic,” says 2020 Florida Realtors President Barry Grooms, a Realtor and co-owner of Florida Suncoast Real Estate Inc. in Bradenton. “September’s market data shows that there are motivated buyers, but the lack of for-sale inventory is affecting their search for their Florida dream home. Statewide inventory for single-family existing homes last month was at the record low of a 2.2-months’ supply. That imbalance of supply and demand could impact the market in the long-term as housing shortages continue to put pressure on prices and affordability.”

Last month’s closed sales of single-family homes statewide rose 22% year-over-year, totaling 28,675, while existing condo-townhouse sales increased 25.3% over September 2019 and totaled 11,290. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

The statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year in September for 105 consecutive months. The statewide median sales price for single-family existing homes was $300,000, up 13.2% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $217,500, up 12.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

According to Florida Realtors Chief Economist Dr. Brad O’Connor, the September data reported a significant milestone for 2020: The year-to-date total of closed existing single-family home sales now exceeds the total from the first nine months of 2019.

“Given all that’s occurred this year, it’s hard to believe we’re already in positive territory again, but here we are,” he says. “And all indications are that we will continue to see strong sales this fall as mortgage interest rates will almost certainly remain at or near record lows. New pending sales of single-family homes were very strong in September, rising by 31.4% year-over-year, while new pending sales of condos and townhouses were up a dramatic 43%.”

The national inventory shortage is the biggest constraint to the housing market right now, O’Connor says.

“Builder confidence, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, hit an all-time high in September,” he says. “However, the construction industry continues to face challenges such as low labor productivity and skilled labor shortages, high prices on materials, land constraints and the usual mix of regulatory impediments that can make it difficult to produce the types of homes that are in greatest demand – particularly single-family starter homes. In the short- to medium-term, we’re really going to have to rely on new listings of existing homes for more inventory – but even then, since sellers are usually buyers, too, this can only help so much.”

Statewide, new listings rose year-over-year in both property type categories in September, up by 12.1% for single-family existing homes and 21.1% for condo and townhouse units.

On the supply side of the market, inventory (active listings) continues to be tight, especially for single-family existing homes, which were at a 2.2-months’ supply in September. Condo-townhouse inventory was at a 5.1-months’ supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.89% in September 2020, down from the 3.61% averaged during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Tools and Research section. Realtors also have access to local market data (password protected) through Florida Realtors’ SunStats resource.

© 2020 Florida Realtors®

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Another New 30-Year Mortgage Record Hit This Week: 2.80%

Freddie Mac: The average 30-year, fixed-rate mortgage broke its all-time record low for the 11th time this year, dropping slightly from last week’s average 2.81%.

MCLEAN, Va. – Freddie Mac’s Primary Mortgage Market Survey released Thursday found that the average rate for a 30-year, fixed-rate mortgage fell to an all-time low of 2.80%. That’s down slightly from last week’s 2.81% and the 11th time in 2020 that falling rates have broken records.

Freddie Mac’s mortgage-rate records date back to 1971.

“Mortgage rates remain very low, providing homeowners who have not already taken advantage of this environment ample opportunity to do so,” says Sam Khater, Freddie Mac’s chief economist.

“Mortgage rates today are, on average, more than a full percentage point lower than rates over the last five years,” Khater adds. “This means that most low- and moderate-income borrowers who purchased during the last few years stand to benefit by exploring refinancing to lower their monthly payment.”

A 30-year 2.8% mortgage has an average 0.6 point for the week that ended on Thursday, according to Freddie Mac. It’s down from 2.81% last week and down from 3.75% on year earlier.

A 15-year fixed-rate mortgage averaged 2.33% with an average 0.6 point, down from last week when it averaged 2.35% and a year ago when it averaged 3.18 %.

A 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.87 percent this week with an average 0.3 point. That’s down from last week’s 2.90 % and 3.40% one year ago.

© 2020 Florida Realtors®

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S. Fla. Leaders Grapple with a Response to Climate Change

MIAMI – It’s going to cost billions to protect South Florida from climate change, that much has been clear for a while. But a new study suggests that sticking heads in the sand will cost far, far more. A new report commissioned by the South Florida Climate Compact found that if the region doesn’t adapt to climate change, the damages could exceed $39 billion by 2070.

It also found that climate projects make financial sense for Broward, Palm Beach and especially Miami-Dade. That is, for every dollar invested in building a higher sea wall or floodproofing a building, the county would lose fewer jobs and protect more property from damage. However, the math doesn’t line up for highly vulnerable Monroe County, a fact that analysts and leaders chalked up to the smaller population.

The estimated costs of adapting are high. Elevating and floodproofing buildings alone could cost the four counties $4.4 billion by 2070. Other coastal protections, like adding sand to beaches and building berms, could cost $18.2 billion by 2070.

But the price of not doing anything is much steeper. Raising and floodproofing buildings could avoid $18 billion in losses. Armoring the coast could avoid $39 billion in losses. Either batch of solutions could also create tens of thousands of jobs throughout the region.

And those loss projections are an underestimate by any measure. The report doesn’t factor in rising temperatures, property value declines or health impacts. It also, notably, doesn’t consider the role of groundwater, which makes sea level rise an inland issue for the region. The real costs (and benefits) would likely be higher.

Even with these limitations, the findings are eyebrow-raising and meant to sway the business community into getting on board with the policies and projects South Florida cities and counties have in the works to protect the region.

“Real estate development is almost a constant for South Florida, and so is climate change,” said Jenni Morejon, president of the Fort Lauderdale Downtown Development Authority. “These two are converging to the point that it can’t be ignored from the financing perspective, from the investment perspective.”

The $264,000 report, paid for by a grant from the state, the four counties and local businesses, was released Tuesday during the annual Southeast Florida Regional Climate Change Compact summit.

A positive ROI for resilience

One of the standout findings of the report is that paying for resilience makes economic sense. In Miami-Dade, the return on investment is 9 to 1 for community-wide adaptations. That’s the case for Broward (2 to 1) and Palm Beach County (1.3 to 1) too. But not Monroe.

The analysis did not find that building resilience infrastructure in the Florida Keys made financial sense for either community-wide or building-level adaptations, a finding that analysts and Monroe County were quick to explain.

For one thing, the smaller, more rural population of the Keys could never offer the same ratio of benefits and cost as a packed, urban place like Miami Beach. Rhonda Haag, chief resilience officer for Monroe County, said there are “a million” economic models to choose from, and each would give slightly different results.

“We are probably going to have to spend more per resident for resilience and that’s OK,” Haag said. “Just because we have a lower rate of return on that investment, that doesn’t mean the Keys should not make the investment. We should and we are.”

She also noted that the solutions modeled in the report aren’t going to work the same in the Keys as they do in places like Palm Beach. Haag pointed to the Army Corps of Engineers, which has presented multi-billion engineering solutions for both Miami-Dade and Monroe to protect against sea-rise heightened storm surge.

In Miami-Dade, the Corps suggested a tall sea wall along the county’s coast to defend against high waves. In Monroe, they’re talking about elevating thousands of individual homes and adding rock revetments along the parts of U.S. 1 exposed to the ocean.

“The ultimate outcome is the same, to make the community more resilient so we can continue to live here in a meaningful fashion,” Haag said.

Bringing developers to the table

The point of the study was to make the business case for climate adaptation – both to Tallahassee in hopes of bringing home much-needed state money and to the business community, which has often been reluctant to join the climate conversation.

“My experience so far, with climate change, sea level rise, resilience, has been like a lot of other developers. It almost feels so overwhelming you don’t know where to start,” said Scott MacLaren, the Urban Land Institute’s district council chair for the Southeast and Caribbean and president of Fort Lauderdale-based commercial real estate company Stiles. “I will readily admit that we are very much in the education phase and very interested. We’re not ignoring the issues.”

Ina Lee, president of TravelHost of Greater Fort Lauderdale magazine, said even three years back, when media headlines focused on the rating agency Moody’s recent decision to factor sea rise into municipal bonds, the forecasts for a drop in property value and Hurricane Irma’s impact in the Keys, South Florida’s business community didn’t talk much about climate change.

“Quite frankly, the business community was not at all involved. It wasn’t on their radar,” she said. “What wakes the business community up is when their bottom line is going to be impacted.”

Lee said the last year has been a “wake up call” for businesses. Now that they’re interested in climate change, they’ve asked for examples of solutions and proof that the investments are worth it. This report, she said, is the answer to those questions.

MacLaren said his firm started considering the role of climate change around four years ago and have built a few projects since that have accounted for sea level rise, like an office tower on Las Olas Boulevard in Fort Lauderdale with the Publix on the first floor elevated six feet above the road.

Of course, that change was mandated by city code. South Florida’s cities and counties have long led the charge in Florida (and the U.S.) to adapt to rising seas and have a variety of successful policy changes and projects to show for it.

“Developers, almost by nature, want to follow the best trend that’s profitable. As long as someone else tries it first. And the good news is we already have,” Morejon said. “This report validates that that investment is worth it.”

Developers need to see leadership, MacLaren said. They don’t want to invest the extra cash to make a building resilient if there’s no money in the city budget to raise the roads around the building, or if the electric utility isn’t paying to upgrade the power lines against stronger storms and higher tides.

“What if those other things don’t happen and I spent significant money for nothing?” he asked.

Preparing for ‘the grenade’

The bogeyman on the horizon for the public and private world alike is money. MacLaren calls the day a bank decides not to offer a mortgage to a flood-prone house “a grenade” to South Florida’s economy.

“If there’s some inflection point in the future where businesses or institutional investors say, ‘I don’t want to invest here,’ then you’re in trouble. And you don’t know if that’s going to happen,” said Aaron McGregor, an analyst at AECOM who helped compile the report.

If it does, he said, then South Floridians may start asking why some communities that invested early are pulling in more investment than communities that didn’t.

“You want everyone to have as equal as a footing to be resilient and not just mitigate these risks but thrive,” he said.

Part of convincing the business community to talk about climate change is addressing their reticence toward “negativity.” For decades, the real estate and development industry handwaved the issue of climate change – or lobbied against changes to code or policy that would address it – out of concerns that it will scare away investment.

MacLaren said all of the attention paid to the topic these days could be a double-edged sword.

“It’s going to be educational and help us prepare – and that’s obviously the most important part – but It’s also going to lend to the other end of the conversation. It may prevent someone from coming down from Massachusetts to spend $2 million on a house in Rio Vista. Their kids may say, ‘Are you crazy?’” he said. “But if we don’t start talking and doing, then the fear will become reality at some point.”

This new report argues that investing in solutions not only prepares for a future “grenade” day, it also works to slow another nefarious economic force brought on by climate change: declining property values.

Study after study has found that buyers are starting to worry about sea level rise, and they’re looking for higher elevation properties to keep their investment safe.

Proving to home buyers that there are solutions that will not only preserve their property but maybe even raise their property value, as a Miami Beach-commissioned study found for the neighborhood of Sunset Harbour, is crucial to local governments.

Unlike other studies that have attempted to quantify how much property values might fall as climate change worsens – and thus, the property tax revenue governments rely on – this report only removed a property off the tax roll once the parcel was completely flooded every day of the year.

By 2070, that’s $4.4 billion worth of cumulative property taxes for all four counties. In the next decade, it’s $145 million alone.

In Miami-Dade alone, property tax revenue generates about 70 cents for every dollar in the general revenue fund. Without that money, or the sales tax and tourism tax collected in a functioning economy, governments won’t have the money left to do things like install pumps or raise roads.

But if South Florida start building the infrastructure now to stave off the worst of the flooding, this report suggests that the region can avoid billions in damages and keep the economy going for at least several more decades.

“It’s such a mammoth undertaking, but if we don’t take it on the economic impacts will be dramatic for the future generations,” said Lee. “We really are becoming the epicenter of solutions. We’ve got a long way to go and we really are making some progress.”

© 2020 Miami Herald. Distributed by Tribune Content Agency, LLC.

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ULI: 8 Real Estate Trends Emerging from the Pandemic

Due to COVID-19, the migration from cities to suburbs has accelerated; multifamily developers no longer have amenity wars to attract new residents; and health and wellness movements are emerging in hotels, offices and more.

WASHINGTON – Because of the COVID-19 pandemic, some housing trends will accelerate, some will come to a halt, and some will spawn entirely new areas of growth, experts said Wednesday during the Urban Land Institute’s virtual fall conference.

For example, the migration from cities to suburbs, which millennials led prior to the pandemic, has only sped up; multifamily developers are no longer engaging in amenity wars to attract new residents; and housing trends reflecting health and wellness movements are emerging. 

“Times of great change always present significant opportunities,” said ULI Global CEO W. Ed Walter. “In the near term, our suburbs will benefit from new growth spurred by shifting demographics and changes to living and working patterns resulting from the COVID-19 crisis. Our cities will have the opportunity to respond by reimagining their public realm, building more resiliency, and reinventing assets, such as retail, that were already struggling before the pandemic. As an industry, we have the opportunity to strengthen by truly embracing diversity and tackling the challenges faced by our communities.” 

ULI released its Emerging Trends in Real Estate 2021 report Wednesday, culling insights from more than 1,600 leaders in the real estate industry. Some of the following trends, according to the report, are accelerating during the COVID-19 pandemic:

  • Smaller offices. Ninety-four percent of real estate professionals say they expect companies to adopt a policy of at least part-time remote work, which will have implications for office space, according to the ULI survey. But more than 60% of respondents say they also believe that many office tenants will expand their footprints to support new ways of collaboration and interaction. For example, companies could increase their use of satellite offices, having multiple smaller spaces in suburban areas. Companies are recognizing that in-person workplaces are still critical to maintaining company culture, innovation, onboarding new employees, and training.
  • Exodus to the South. The single-family housing market has been booming during what has become the “Great American Move.” The pandemic has fueled the desire for lower-density areas, propelling suburban growth, a trend that was already happening in the last five years as millennials start families. The South, which offers greater housing affordability, is benefiting the most from relocation trends during the pandemic.
  • Urban comeback. Gateway markets, such as Boston, Los Angeles, New York, San Francisco, and Washington, D.C., may struggle for the next three to five years to return to their pre-pandemic highs. But they’ll likely reemerge as major hubs because of their dominance in entertainment, finance, technology, and education. Some cities may add more green space as they look to add greater outdoor activities to attract residents.
  • Retail vacancies. As discount and online stores grow in favor, demand for large retail chains likely will lessen. More than 80% of respondents to ULI’s survey say COVID-19 has accelerated a shift in retail that was already occurring due to online competition. Industry analysts predict smaller physical retail footprints moving forward, likely leaving large commercial vacancies, which will lower rents. “Top brands will take advantage of lower prices to upgrade their locations, while malls will leverage empty space to improve their tenant roster or convert to distribution centers for online retailers,” ULI’s report notes.
  • State and local fiscal issues. Cities large and small could face major fiscal challenges over the next few years. Real estate taxes, which usually comprise the largest source of local government revenue, will likely fall as hotels and shopping centers lose value. The loss in revenue could have a lasting impact on government services and infrastructure investments. Sixty-five percent of cities could delay or cancel infrastructure projects due to the COVID-19 pandemic, according to an analysis by the National League of Cities. The real estate industry has worked with local officials in cities across the country to develop road construction projects through public-private partnerships, which could play a vital role in funding future projects.
  • Safety and health concerns in buildings. Eighty-two percent of survey respondents say health and well-being will become an important factor across all real estate sectors, particularly hotels, office buildings, and restaurants. Companies will place a focus on advanced technology and new services that can offer cleaner buildings, such as greater HVAC infrastructure, sensors, touchless entry, and contract tracing apps. In the residential market, demand likely will increase for smart-home technology, touchless controls on sinks, motion sensor lights, and oversized windows to allow for more natural light and fresh air.
  • New solutions for affordable housing. The pandemic has been blamed for accelerating housing disparities. Many low-income workers have experienced unemployment and could face possible eviction after a national moratorium expires at the end of the year. Combined with the steep revenue declines likely coming for state and local governments, programs and resources to help curtail housing affordability issues could be at stake. Industry officials point to several possible solutions, such as the expansion of the Low Income Housing Tax Credit and the Section 8 voucher program, expanding zoning, and possible conversion of surplus hospitality, office, and retail space into residential uses.
  • Focus on diversity, inclusion. Seventy percent of survey respondents say the real estate industry can address and help end racial inequality, such as by promoting diversity, equity, and inclusion, as well as by looking for ways to develop underserved communities. Over the last few months, real estate pros report evaluating efforts and investing in programs to support diversity and inclusion, such as expanding job training and recruiting programs geared toward minorities and underserved communities.

Source: National Association of Realtors®, Melissa Dittmann Tracey

© 2020 Florida Realtors®

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Ocwen to Pay $11M for Alleged Mortgage Servicing Failures

Ocwen allegedly made mistakes servicing Fla. homeowner’s mortgages, including untimely insurance payments and force-placed insurance, says Attorney General Ashley Moody.

TALLAHASSEE, Fla. – Florida Attorney General Ashley Moody says the state secured more than $11 million in relief for Floridians harmed as a result of alleged improper mortgage servicing practices. The proposed final consent judgment with Ocwen, pending adoption by the U.S. District Court for the Southern District of Florida, resolves a lawsuit brought by the State of Florida against Ocwen Financial Corporation, Ocwen Mortgage Servicing, Inc., Ocwen Loan Servicing, LLC and PHH Mortgage Corporation.

The agreement provides at least $8.6 million in consumer relief, including $2.1 million to Floridians harmed as a result of Ocwen’s alleged servicing failures, including untimely payments of borrowers’ insurance premiums, improper imposition of lender-placed insurance and overcharging for property preservation inspections, Moody says.

Other benefits for eligible Florida borrowers include at least $1 million in mortgage loan modifications and about $5.5 million in late fee waivers. Ocwen will also pay more than $3 million in civil penalties and reimburse the attorney general office’s fees and costs.

Moody calls the settlement a “continuation of our efforts to correct harmful deficiencies in mortgage servicing practices and ensure that distressed homeowners … impacted by servicing errors receive much-needed relief.”

The proposed consent judgment resolves litigation Florida initially filed in federal court in 2017. Florida’s complaint alleged that Ocwen committed various errors in the course of servicing residential mortgage loans, including failing to accurately onboard loans onto its system of record, mishandling borrowers’ escrow accounts, overcharging borrowers’ accounts and sending misleading communications about borrowers’ accounts.

Eligible borrowers don’t need to do anything to apply for relief. The Attorney General’s Office will contact borrowers eligible for monetary payment. Ocwen will automatically apply the waiver for about 6,000 eligible borrowers.

Loan modifications

The agreement requires Ocwen to provide Florida borrowers more than $1 million in debt forgiveness through loan modifications. The modifications include principal reductions or other forms of debt forgiveness based on eligibility criteria. Under the agreement, Ocwen must meet a minimum threshold of $1 million in debt forgiveness to avoid paying an additional $1 million penalty.

Ocwen will directly notify eligible Florida borrowers through its subsidiary, PHH Mortgage.

© 2020 Florida Realtors®

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RE Q&A: Can Non-Participating HOA Board Members Be Removed?

For some reason, a newly elected board member hasn’t show up for meetings. What does Fla. law say about removing an elected board member from office?

STUART, Fla. – Question: I am on the board of my condominium. At the most recent election, a new board member was elected and added to the board. Since the first meeting following the election, this person has not shown up or made themselves available for any other board meetings. It has caused issues with the board being able to reach a quorum to hold meetings, which has delayed the board from taking action on necessary items.

I don’t know why this person ran for the board if they did not intend on participating. Is there anything that we can do to remove this person from the board? – M.V., West Palm Beach, Fla.

Answer: The election of directors is reserved to the members of the association pursuant to the Florida Condominium Act. As such, the board of directors has no power to unilaterally remove one of the directors.

However, if the non-participating board member is causing enough of a problem that the members have taken notice, the members do have the option of recalling the board member. This is accomplished under Section 718.112(2)(j), Florida Statutes, which provides a director, with or without cause, may be removed by the vote or agreement in writing of a majority of voting interests of the association.

A recall may be triggered by either (a) the board’s receipt of a written recall petition from a majority of the voting interests of the association or (b) the board’s receipt of a written request for a special meeting of the members from at least 10% of the voting interests of the association.

In the former scenario, the written petition must be served upon the association by certified mail or personal service. Upon receipt, the board must duly notice and hold a board meeting within five business days, and the board member shall be recalled effective immediately upon the conclusion of the board meeting, provided that the recall is facially valid (more on that below).

In the latter scenario, upon the board’s receipt of the written request for a special meeting, the board must duly notice and hold a meeting of the members which states the specific purpose of the meeting. At the meeting, the members present in person or by proxy will vote on removal of the board member.

If a majority – 51% – of the total voting interests of the association votes in favor of removal, the recall is deemed effective. The board must then notice and hold a board meeting within five business days, at which the board will vote to approve the recall and the board member shall be recalled effective immediately.

The board can reject the recall petition, but only if the recall petition is facially deficient.

The most common reason for the petition being facially deficient is that the number of members that signed or voted for recall did not actually add up to a majority for some reason. An example of this could be some of the members who voted had their voting rights suspended or a corporate owner did not have a voting certificate on record with the association and one was required.

A recalled board member must turn over to the board, within 10 business days after the recall is approved, any and all records and property of the association in their possession. If a vacancy occurs on the board as a result of a recall or removal, and less than a majority of the board members are removed, the vacancy may be filled by the affirmative vote of a majority of the remaining directors.

Avi S. Tryson, Esq., is partner of the Law Firm Goede, Adamczyk, DeBoest & Cross. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

© 2020 Journal Media Group

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Housing Shortages, Single-Family Zoning and Solutions

ULI: Cities with housing shortages are rethinking their single-family zoning laws that make it hard for high-density construction projects to find available land.

WASHINGTON – As housing shortages deepen across the country, lawmakers increasingly target single-family zoning to remake neighborhoods by adding density. Over recent years, some local and state governments – like Minneapolis and the state of Oregon – have essentially eliminated single-family zoning to make way for more types of housing. Other states, including Washington, Maryland and Nebraska, have also introduced various reforms that target single-family zoning.

Wednesday, during the Urban Land Institute’s virtual conference, housing analysts and lawmakers pointed to single-family zoning as perpetuating segregation and inequality, leaving first-time buyers with fewer options and fostering an increase in homelessness.

For example, the majority of zoned land in California is reserved for single-family housing, said David Garcia, policy director at Terner Center for Housing Innovation at U.C. Berkeley, who spoke during the session “Legislating Density as a Solution to the Housing Crisis.” In Oakland, Calif., alone, 65% of residential zoning is reserved for single-family housing. That has left the state with a scarce number of lots to respond to its deficit of more than 3 million housing units.

Garcia cited research that shows if California eliminated single-family zoning and allowed fourplexes in more areas, it could add 3 million new homes to meet the state’s housing needs.

However, the “not in my backyard” attitude held by established residents has long stood as a barrier to eliminating single-family zoning. Critics say adding more types of housing could add traffic to neighborhoods and potentially lower property values.

Accessory dwelling units (ADUs) – essentially another small home added onto an existing lot – are increasingly built as a response to housing shortages. California permits the addition of ADUs on single-family lots and fostering rapid expansion of the housing trend. Permits and ADU completions in the state have more than doubled from 2018 to 2019.

But panelists at Wednesday’s session cautioned that ADUs are only be one piece of the housing-shortage puzzle. More land that has been zoned for single-family homes needs to be freed up to build on, they said.

“Single-family zoning caps out what you can build … We need to zone for enough housing,” Scott Wiener, a California state senator, said during the session. That would allow more housing in areas near transit and job hubs, and prevent greater sprawl, long commutes that plague roadways, the loss of farmland, and building in wildfire zones, he said.

“We’re drunk on sprawl because it makes our lives easier,” he added. “Then we don’t have to have the difficult conversation about zoning in our existing communities where the jobs and transit are.”

Homelessness will continue to accelerate if states don’t do more to respond to housing shortages, Pinkston warned. “We need to solve the middle-income housing issue at scale or our homeless problem will grow astronomically,” she said.

Source: National Association of Realtors® (NAR)

© 2020 Florida Realtors®

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Host a Successful Virtual Event on Social Media

You once held classes for new homebuyers? Take it online. Facebook, LinkedIn, Instagram, YouTube and Twitter all have a livestream option.

NEW YORK – The pandemic compelled organizations worldwide to schedule virtual events, which requires choosing an appropriate platform.

Many companies use Zoom or other dedicated videoconferencing sites, but social media also offers livestreaming options, such as Facebook Live, LinkedIn Live, Instagram Live, YouTube Livestream and Twitter Live. Instagram allows users to go interact with another person and may be the best choice for Q&As.

It’s important to consider who will attend the event and whether the target audience uses your preferred platform regularly. Many large events that use conferencing software combine live and prerecorded elements, which can also be accomplished on social media platforms if you, for example, need to explain a specific concept that people will want to review.

In addition, an event can have a moderator whose job is to engage with the audience. A moderator can collect and answer submitted questions in real time or allocate time at the end to talk with viewers.

Marketing for these live events is important and should include all the essential information, such as what time the event goes live (including time zones), how they can join, how long the event will last and how they can get more information.

While an event may occur on one social media platform, it can be promoted across different social networks, via email lists or other cross-promotion opportunities.

When the event ends, all materials should be posted immediately.

Source: Forbes (10/13/20) Fisher, Adrian

© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688

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Record-High Lumber Costs Add $16K to Cost of New Homes

NAHB says lumber costs 170% more than in mid-April, and the average cost of construction has risen so much that 2.1M buyers can no longer afford a new home.

WASHINGTON – Shoppers shopping for newly constructed homes face sharply increased prices as the cost of lumber soars to record highs. In fact, the National Association of Home Builders (NAHB) says it’s pricing many buyers out of the market.

Recent lumber price spikes added more than $16,000 to the typical cost of a new single-family home, and the multifamily sector also feels the impact, with the typical apartment unit construction cost rising more than $6,000, according to data from NAHB.

The increase has priced more than 2.1 million U.S. households out of the market for a median-priced new home, according to NAHB.

Average lumber prices have increased more than 170% since mid-April, reaching a record high of more than $800 per 1,000 board feet, a common industry measure. Builders want lawmakers to take action, advocating for an increase in supply and reduced cost of lumber. NAHB warns that lumber shortages could stress the overall housing market beyond its current state if too many buyers are priced out of the new-home market.

“Residential construction can lead the nation out of its current economic downturn, as it has during virtually every major economic disruption over the past five decades,” writes Chuck Fowke, NAHB’s 2020 chairman, in a column at BuilderOnline. “But it is vital that elected officials support policies that help America’s home builders gain access to reasonably priced building materials, particularly lumber.”

Source: “NAHB Warns That Record-High Lumber Prices Could Drive Up Housing Costs,” BUILDER (Oct. 9, 2020)

© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688

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The Denser the City, the Harder the COVID-19 Housing Hit

The pandemic sparked a general moving trend from cities to suburbs, but a study found the big hit was felt in truly dense metros, such as New York City and San Francisco. In less dense cities such as Phoenix and Charlotte, S.C., fewer people are trying to get out of town.

NEW YORK – The housing market has been booming during the COVID-19 crisis, but America’s cities are taking it on the chin.

And while big cities such as New York and San Francisco, in particular, are struggling with falling prices, values in less densely populated cities such as Phoenix and Charlotte, North Carolina, are holding up fairly well, a new analysis shows.

The study underscores that the spread of the virus and the trend toward remote work are driving the housing market, and may continue to restrain price growth in very crowded urban areas while boosting gains in more suburban areas for some time.

Since the virus began to take a significant toll on public health and the economy in March, many Americans have been fleeing cities for suburban and rural areas both to minimize the risk of contagion and take advantage of remote work policies during the crisis, says economist Troy Ludtka of Natixis, an investment banking firm. Those factors, he says, have bolstered home sales. Analysts believe the teleworking shift will at least partly continue even after the outbreak is over.

Also, many Americans, who are still spending an inordinate share of their days at home despite gradual business reopenings, are hunting for houses with more indoor and outdoor space, according to Redfin, a national real estate brokerage.

Also underpinning strong sales are historically low mortgage rates, says Todd Teta, chief product officer for ATTOM Data Solutions, a real estate research firm.

In the four weeks ending Sept. 20, home sales were up 13.6% annually in U.S. suburbs, 13% in rural areas and 8.8% in urban areas, according to a Redfin study. Home prices rose 16.6% in rural areas, 13.7% in the suburbs and 13.1% in urban districts, Redfin figures show.

In many cases, the most densely populated cities have suffered sharper price declines or very modest increases because of higher contagion risk, according or a Natixis analysis.

“There’s a bifurcation,” Ludtka says. “People are less likely to purchase homes in areas where they may get sick.”

Among 20 cities in the S&P CoreLogic Case-Shiller’s composite price index, 11 fell short of the 2.9% national price gain from March through July (the most recent data available) while nine topped that increase. New York and San Francisco, the two most crowded cities – at 28,000 and 19,000 residents per square mile, respectively – were most affected by depressed prices, the Natixis analysis shows.

In New York, prices fell for three straight months and were down 0.3% in July from March levels, Natixis figures show. In San Francisco, prices dipped in two of the most recent three months prices and were up less than 1% since March.

Among other underperformers, prices edged up 1.5% in Miami (ranked fourth in density), 2.4% in Chicago (ranked fifth), 2.6% in Los Angeles (ranked 10th), and 2.6% in Washington, D.C. (ranked seventh).

Other measures show even sharper price declines in some areas. Median prices in Manhattan tumbled from $1.7 million in February to $1.2 million in June, according to ATTOM Data Solutions, a real estate research firm.

Meanwhile, less tightly-packed cities fared better than average. From March to July, prices increased 4% in Phoenix (ranked 34th), 3.2% in San Diego (ranked 23rd), and 3.4% in Charlotte (ranked 37th), according to the Natixis data.

“Some of the most popular places to buy a home are in the suburban outlying areas of major cities,” says Daryl Fairweather, Redfin’s chief economist.

Not every crowded city is seeing home prices suffer because of the pandemic and not all cities with more elbow room are prospering, the study shows, since other factors such as an area’s economy may loom larger, Ludtka says.

Boston home prices, for example, were up 3.1% in the March-July period, though the city ranks third in population density. And prices have increased just 1.8% in Tampa even though the city is a relatively low 46th in density.

But there’s little doubt that the pandemic has upended the real estate market.

In New York, condo and co-op sales had just started to recover in January after the 2017 tax code changes, which curtailed deductions for expensive homes, held down activity, says Martin Freiman, a Redfin broker. Since the crisis began, however, Redfin is handling about 600 sales a month in Manhattan, down from about 1,100 pre-pandemic, and prices have been reduced an average of about 10%, he says.

“Everybody just left the city en masse,” he says. “People just stopped buying homes … You have an open house and no one shows up.”

If companies such as Facebook and Google return to their New York offices by next spring, Freiman foresees young professionals helping rejuvenate the market. But another fertile buyer segment – empty nesters – may be diminished with older Americans more vulnerable to COVID-19.

Copyright 2020, USATODAY.com, USA TODAY

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ULI Survey: Commercial Real Estate Recovery to Accelerate

The economic forecast from ULI is somber for the rest of 2020 but grows optimistic during the next three years for most commercial sectors.

WASHINGTON – While commercial real estate was dealt a debilitating blow because of the pandemic, there are glimmers of hope for a significant recovery soon. The Urban Land Institute’s Real Estate Economic Forecast, which was released Tuesday during ULI’s virtual 2020 fall conference, finds that the industrial and retail sectors are particular bright spots expected to rebound strongly over the next couple of years.

A panel of experts at the virtual meetings predicted where they see commercial real estate heading.

Industrial is the “star” of commercial real estate: Total annual returns for the sector are projected to be 4.5% in 2020, 6.2% in 2021 and 10% in 2022, according to the ULI survey, which includes insights from more than 30 economists and analysts. The flourishing segment of e-commerce storage is expected to continue to surge, said Suzanne Mulvee, senior vice president of research and strategies at GID, a commercial developer and investor.

“There’s a ton of room for growth,” Mulvee said. “Speed of delivery continues to be important for consumers. Storage will be a real tailwind for the industrial sector.”

Demand for “experiential” retail to continue: The declines retail is experiencing – annual growth is expected to be down 10% this year – aren’t entirely due to the pandemic.

“Retail was overdeveloped before the pandemic,” Mulvee said. “There were huge amounts of oversupply, and then the rise in e-commerce contributed to the issue.” The key to the future of retail, Mulvee added, is the redevelopment of current spaces and a focus on “smarter” stores. “Better retail will heal faster. Sales will get concentrated into the more attractive options.”

Mary Ludgin, senior managing director at investment firm Heitman, said “experiential” retail will rebound because consumers still crave the in-person shopping experience that e-commerce can’t provide.

“Once there’s a vaccine,” she said, “you’ll see experiential retail boom.”

The ULI survey forecasts that total annual returns for retail will be -4.0% in 2021 and 2.0% in 2022.

Multifamily prices mellow in urban centers: Douglas Poutasse, managing director at real estate investment firm BentallGreenOak, said he is “modestly optimistic” about the multifamily sector, a sentiment other panelists echoed. A drop in housing prices in expensive areas such as San Francisco and New York will fuel a recovery there, Ludgin said.

“Big cities will recover and come back with better prices,” he said. “People still want what those places have to offer.” The total annual return rate for multifamily properties is predicted to be 0% in 2020, 4% in 2021, and 6% in 2022.

Offices may see an extended recovery: The ULI survey forecasts that the total annual rate of return for offices will grow from -2.0% in 2020 to 0.3% in 2021 and 4.3% in 2022.

Ludgin said that a full office recovery could take up to five years and that, in the intervening years, some office space likely will be converted into hotels and apartments. Younger workers may want to return to the office for advancement opportunities, Mulvee said, and larger knowledge- and technology-based companies will drive the trend back to the office.

Poutasse agreed that the office environment will continue to foster technology and innovation for many workers and spur on office demand in the next few years.

“I think you will see people coming back to offices,” Poutasse said. “You don’t have the same productivity or innovation at home because you don’t have the same interaction.”

Source: National Association of Realtors® (NAR)

© 2020 Florida Realtors®

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RE Q&A: May a Resident Have More than One Support Animal?

A condo board received a request for two emotional support animals, though their rules limit dogs to one per unit. What must they allow?

STUART, Fla. – Question: We recently received a request for two emotional support animals. Our documents only allow one pet per unit and the potential purchaser is threatening to file a discrimination complaint if we do not allow the dogs. When we asked for documentation, the owner only provided a registration certificate with a national support animal registration. Are we required to allow the second dog? – A.F., Vero Beach

Answer: Possibly. There are a few issues here. First, it is important to remember that an emotional support animal is not subject to pet restrictions because it is viewed as a medical device rather than a pet.

Florida law was recently changed to mirror some position statements from the Department of Housing and Urban Development that owners must provide supporting documentation for each pet when an owner requests more than one emotional support animal. In this situation, the person could have one pet and one emotional support animal, so the requesting party would only need documentation specifically addressing only one of the dogs. If your community was a no pet community, the person would need to provide documentation that each dog is separately necessary for the full use and enjoyment of the premises.

Next, irrespective of how many support animals are being considered, it is important to note that the association is allowed to request reasonably reliable documentation from a health care provider in the relevant field. This information must support a) that the person is disabled as defined by law; and b) that the animals are necessary for the full use and enjoyment of the premises as a result of the disability.

Here, these registration certificates are almost never reliable and should not be accepted without additional verification. These websites will charge a fee to “register” the animal where you pay money and get a certificate. A primary concern with this business model is that there is typically no independent verification that the person is disabled. In other words, the person requesting the registration certifies to the company that he or she is disabled and there is no independent verification. The Department of Housing and Urban Development has recently opined that these registrations website and on-line certifications are not reliable.

The thrust now appears to focus on reliable medical documentation from health care professionals with personal knowledge. In this case, there is a good chance that you could deny the request for an emotional support animal in addition to the pet allowance because the documentation provided is not reliable.

All of this being said, this is an evolving and fact-sensitive analysis and I would highly recommend you have the request and supporting documentation reviewed by your legal counsel to provide an analysis and opinion on whether the accommodation is necessary and should be granted or denied.

John C. Goede Esq. is co-founder and shareholder of the Law Firm of Goede, Adamczyk, DeBoest & Cross, PLLC. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

© 2020 Journal Media Group

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30-Year Mortgage Rates Hit Another Record Low – 2.81%

It’s down from last week’s 2.87% as 30-year, fixed-rate loans hit a 10th all-time low this year. The average 15-year, fixed-rate mortgage dropped to 2.35% from 2.37%.

WASHINGTON (AP) – U.S. long-term mortgage rates fell this week as the key 30-year loan reached a new all-time low for the 10th time this year.

Home loan rates have marked a year-long decline amid economic anxiety in the recession set off by the coronavirus pandemic. Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year mortgage fell to 2.81% from 2.87% last week. By contrast, the rate averaged 3.69% a year ago.

The average rate on the 15-year fixed-rate mortgage declined to 2.35% from 2.37%.

The low borrowing rates have bolstered demand by prospective homebuyers. But the demand has been constrained by the economic hardship brought by the coronavirus pandemic as well as the scarcity of available homes for sale.

In the latest sign that layoffs remain a hindrance to the economy’s recovery from the pandemic recession, the government reported Thursday that the number of Americans seeking unemployment benefits rose last week by the most in two months to a historically high level.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Survey: 13% of Owners Think Their House Is Haunted

While 1 in 3 Americans say they don’t want to live in a haunted house, over 10% say they have shadows, hot-cold spots, odd pet behavior and a “feel” in certain rooms.

SANTA CLARA, Calif.  – Haunted houses are popular attractions this time of year, but most Americans say they wouldn’t consider living in one. However, a majority of those who believe they currently live in a home that is haunted say the spooky happenings they’ve experienced are not reason enough to move, according to realtor.com’s annual Halloween survey released today.

A realtor.com annual Halloween survey of more than 2,000 Americans found that 13% believe they live in a home that is haunted, and a majority of them – 54% – knew or suspected the house was haunted before moving in. However, most (62%) said they’re not likely to consider buying a home rumored to be haunted. Still, of that 13% who believe they share space with spectral residents, 56% have not considered moving.

“Haunted houses typically draw big crowds this time of year, but we wanted to see how many people actually believe they live in one,” says Lexie Holbert, realtor.com housing and lifestyle expert. “Although only a small percentage of respondents indicated they believe their home is haunted, it was surprising to see how many are perfectly comfortable sharing their space with spirits from the world beyond.”

The West led the nation with the most respondents who believe they live in a haunted home at 18%, followed by 13% in the Northeast, 11% in the Midwest and 10% in the South.

Of those who suspected their house was haunted prior to moving in, Northeasterners were most comfortable living with spirits at 76%, followed by those in the West at (57%), the South (51%) and the Midwest (35%).

When the 13% who believe their homes is haunted were asked to describe the spooky things that occur, strange noises topped the list at 44%, followed by:

  • Shadows – 38%
  • Hot and cold spots – 37%
  • The feel of certain rooms – 34%
  • Odd pet behavior – 30%
  • Items moving – 29% (tie)
  • The feel of being touched – 29% (tie)
  • Levitating objects – 17%

According to survey results, the spirits make their presence known in different ways depending on geography. Regionally, here’s what topped the list of ghoulish sensory exploits:

  • Northeast – Feel of the room (41%), shadows (34%), strange noises (33%)
  • Midwest – Strange noises (57%), shadows (37%), items moving and hot and cold spots (36%) (tie)
  • South – Strange noises (58%), shadows (48%), the feel of a certain room (44%)
  • West – Hot and cold spots (38%), strange noises and shadows (33%) (tie), the feeling of being touched (28%)

About half of the men surveyed (54%) said they’re unlikely to consider living in a house rumored to be haunted compared to 70% of women. People aged 55 and over were most unlikely to consider living in a haunted house (64%), followed closely by those aged 18-34 (62%) and 35-54-year-olds (59%).

When asked about a discounted home price for the haunting, a number of people suggested that something in the 10% range would make them consider a haunted house – but one in four respondents (23%) ages 18 to 24 said no discount would be enough.

© 2020 Florida Realtors®

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Best Places to Retire? 13 of the ‘Top 25’ Are in Fla.

U.S. News & World Report’s latest ranking of top retirement communities could have almost said, “Pick any town in Fla.” Seven Fla. metros are in the top 10: Sarasota (No. 1), Fort Myers (2), Port St. Lucie (3), Naples (4), Ocala (6), Miami (9) and Melbourne (10).

WASHINGTON – U.S. News & World Report unveiled its 2020-2021 Best Places to Live and Best Places to Retire in the United States. The new lists evaluate the country’s 150 most populous metropolitan areas based on affordability, job prospects and desirability.

In the “Best Places to Retire” category, Florida metro areas stood out with seven out of the top 10 slots and 13 of the top 25 slots.

“After a prolonged period of staying at home, people are taking a critical look at where they live, and many are looking to find a place they can feel happier, afford more or pursue new opportunities,” says Devon Thorsby, real estate editor at U.S. News. “The Best Places rankings can help people examine the details they consider important in a larger community.”

This year, U.S. News increased the number of metropolitan areas evaluated for both sets of rankings from 125 to 150, to provide a broader and more accurate reflection of where Americans can live and retire.

Best places to retire

U.S. News & World Report’s announcement of top retirement destinations says it’s “dominated by Florida metro areas, largely due to affordable homes, low taxes and high ratings for happiness and desirability.”

An increase in Desirability and Job Market scores lifted Sarasota from No. 2 last year to No. 1 this year – but it overtook another Florida city, Fort Myers, which became No. 2. And while Port. St. Lucie’s Housing Affordability score decreased slightly, increases in Desirability, Job Market and Health Care scores helped it jump two places to No. 3.

Miami also saw a decrease in Housing Affordability, but it broke into the top 10 this year, jumping five places to No. 9 thanks to Desirability and Job Market score increases.

The top 25 places to retire also includes three Texas communities, and two places each in Michigan, North Carolina and Tennessee.

“Moving to a new place for retirement can reduce your cost of living and improve your quality of life,” says Emily Brandon, U.S. News senior editor for retirement. “The Best Places to Retire includes information about housing costs, access to quality hospitals and the strength of the job market, which can help you find a retirement spot that will meet your needs.”

The 2020-2021 Best Places to Retire were determined based on a methodology that factored in happiness, housing affordability, health care quality, retiree taxes, desirability and job market ratings. These measures were weighted based on a public survey of individuals across the U.S. who are nearing retirement age (ages 45-59) and those who are of retirement age (60 or older) to find out what matters most when considering where to retire. Data sources include the U.S. Census Bureau and the Bureau of Labor Statistics, as well as U.S. News rankings of the Best Hospitals.

2020-2021 Best Places to Retire – Top 25

  1. Sarasota
  2. Fort Myers
  3. Port St. Lucie
  4. Naples
  5. Lancaster, Pa.
  6. Ocala
  7. Ann Arbor, Mich.
  8. Asheville, N.C.
  9. Miami
  10. Melbourne
  11. Myrtle Beach, S.C.
  12. Nashville, Tenn.
  13. Jacksonville
  14. Manchester, N.H.
  15. Daytona Beach
  16. Orlando
  17. Dallas-Fort Worth, Texas
  18. Lakeland
  19. Chattanooga, Tenn.
  20. Tampa
  21. Grand Rapids, Mich.
  22. Houston, Texas
  23. Charlotte, N.C.
  24. San Antonio, Texas
  25. Pensacola

U.S. News & World Report is a global leader in quality rankings that empower people to make better, more informed decisions about important issues affecting their lives.

© 2020 Florida Realtors®

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Landlords Getting Squeezed Between Tenants and Lenders

NEW YORK (AP) – When it comes to sympathetic figures, landlords aren’t exactly at the top of the list. But they, too, have fallen on hard times, demonstrating how the coronavirus outbreak spares almost no one.

Take Shad Elia, who owns 24 single-family apartment units in the Boston area. He says government stimulus benefits allowed his hard-hit tenants to continue to pay the rent. But now that the aid has expired, with Congress unlikely to pass a new package before Election Day, they are falling behind.

Heading into a New England winter, Elia is worried about such expenses as heat and snowplowing in addition to the regular year-round costs, like fixing appliances and leaky faucets.

Elia wonders how much longer his lenders will cut him slack.

“We still have a mortgage. We still have expenses on these properties,” he said. “But there comes a point where we will exhaust whatever reserves we have. At some point, we will fall behind on our payments. They can’t expect landlords to provide subsidized housing.”

The stakes are particularly high for small landlords, whether they own commercial properties, such as storefronts, or residential properties such as apartments. Many are borrowing money from relatives or dipping into their personal savings to meet their mortgage payments.

The big residential and commercial landlords have more options. For instance, the nation’s biggest mall owner, Simon Property Group, is in talks to buy J.C. Penney, a move that would prevent the department store chain from going under and causing Simon to lose one of its biggest tenants. At the same time, Simon is suing the Gap for $107 million in back rent.

Michael Hamilton, a Los Angeles-based real estate partner at the law firm O’Melveny & Myers, said he expects to see more retail and other commercial landlords going to court to collect back rent as they get squeezed between lenders and tenants.

Residential landlords are also fighting back against a Trump administration eviction moratorium that protects certain tenants through the end of 2020. At least 26 lawsuits have been filed by property owners around the country in places such as Tennessee, Georgia and Ohio, many of them claiming the moratorium unfairly strains landlords’ finances and violates their rights.

Apartment dwellers and other residential tenants in the U.S. owe roughly $25 billion in back rent, and that will reach nearly $70 billion by year’s end, according to an estimate in August by Moody’s Analytics.

An estimated 30 million to 40 million people in the U.S. could be at risk of eviction in the next several months, according to an August report by the Aspen Institute, a nonprofit organization.

Jessica Elizabeth Michelle, 37, a single mother with a 7-month-old baby, represents a growing number of renters who are afraid of being homeless once the moratorium on evictions ends. The San Francisco resident saw her income of $6,000 a month as an event planner evaporate when COVID-19 hit. Supplemental aid from the federal government and the city helped her pay her monthly rent of $2,400 through September. But all that has dried up, except for the unemployment checks that total less than $2,000 a month.

For her October rent, she handed $1,000 to her landlord. She said her landlord has been supportive but has made it clear he has bills to pay, too.

“I never had an issue of paying rent up until now. I cry all night long. It’s terrifying,” Michelle said. “I don’t know what to do. My career was ripped out from under me. It’s gotten to the point of where it’s like, ‘Am I going to be homeless?’ I have no idea.’”

Some landlords are trying to work with their commercial or residential tenants, giving them a break on the rent or more flexible lease terms. But the crisis is costing them.

Analytics firm Trepp, which tracks a type of real estate loan taken out by owners of commercial properties such as offices, apartments, hotels and shopping centers, found that hotels have a nearly 23% rate of delinquency, or 30 days overdue, on their loans, while the retail industry has a 14.9% delinquency rate as of August.

The apartment rental market has so far navigated the crisis well, with a delinquency rate of 3%, according to Trepp. That’s in part because of the eviction moratorium, along with extra unemployment benefits from Washington that have since expired.

“There are bad actors, but the majority of landlords are struggling and are trying to work with a bad situation,” said Andreanecia M. Morris, executive director of HousingNOLA, a public-private partnership that pushes for more affordable housing in the New Orleans area.

Morris, who works with both landlords and tenants, said that government money wasn’t adequate to help tenants pay their rent, particularly in expensive cities. She is calling for comprehensive rental assistance. She fears that residential landlords will see their properties foreclosed on next year, and the holdings will be bought by big corporations, which are not as invested in the neighborhoods.

Gary Zaremba, who owns and manages 350 apartment units spread out over 100 buildings in Dayton, Ohio, said he has been working with struggling tenants – many of them hourly workers in restaurants and stores – and directs them to social service agencies for additional help.

But he is nervous about what’s next, especially with winter approaching and the prospect of restaurants shutting down and putting his tenants out of work. He has a small mortgage on the buildings he owns but still has to pay property taxes and fix things like broken windows or leaky plumbing.

“As a landlord, I have to navigate a global pandemic on my own,” Zaremba said, “and it’s confusing.”

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. AP writer Kimberlee Kruesi in Nashville, Tennessee and AP small business columnist Joyce M. Rosenberg in New York contributed to this report.

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FTC Investigating Opendoor for Its Advertising Practices

According to Opendoor docs, the FTC sent a civil investigative demand related to “statements pertaining to Opendoor’s offers reflecting or being based on market prices.”

NEW YORK – New corporate filings revealed that Opendoor, an iBuying giant, is being investigated by the Federal Trade Commission (FTC) over its advertising practices and how it presents real estate offerings to customers.

The investigation was contained in Opendoor’s S-4 statement, which revealed that it would be going public through a merger with Social Capital Hedosophia Holdings Corp. II. That federal filing also revealed a 2019 civil investigative demand.

The filing states: “In August 2019, the FTC sent a civil investigative demand to Opendoor seeking documents and information relating primarily to statements in the company’s advertising and website comparing Opendoor’s offers to purchase homes to selling in a traditional manner using an agent and statements pertaining to Opendoor’s offers reflecting or being based on market prices.”

The investigation is ongoing, according to the S-4 statement.

In mid-September, Opendoor announced that it would become a public company through a merger with Social Capital Hedosophia Holdings Corp. II. “This is one of many milestones towards our mission and will help us accelerate the path towards building the digital one-stop shop to move,” Eric Wu, co-founder and CEO of Opendoor, told TechCrunch at the time.

Opendoor makes instant cash offers to home sellers who wish to bypass the traditional route for selling, often for the sake of a quicker sale. Homeowners tend to pay more in commission for the convenience.

As the COVID-19 outbreak hit in the U.S. this spring, Opendoor, like many other iBuyers, paused operations. At the time, Opendoor announced plans to lay off 35% of its staff as a cooling housing market threatened the iBuying model.

However, the housing market came roaring back as states began to reopen, prompting Opendoor and other iBuyers to reemerge, in part because iBuyers can often complete transactions socially distanced. Opendoor resumed its instant cash offers in its 21 markets by mid-August.

“We are just scratching the surface today,” Opendoor said in its filing, as reported by HousingWire. “We believe we have a massive opportunity to expand our reach to the top 100 markets in the United States.”

Opendoor sold more than 8,000 homes last year and generated $4.7 billion in revenue, according to the company.

Profitability, however, continues to be a struggle for iBuyer businesses. From January through June of this year, Opendoor posted a net loss of $118 million.

Source: “Opendoor Discloses That It’s Under Federal Investigation,” HousingWire (Oct. 6, 2020)

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1 in 4 Homeowners in Forbearance Still Paying Their Mortgage

About 25% of owners seemingly have mortgage forbearance as a preventative measure, “one of the most surprising aspects of this entire episode,” says a mortgage banker VP.

NEW YORK – About 25% of all homeowners who demanded forbearance are still current on their mortgages as of Sept. 6, according to the latest Mortgage Bankers Association (MBA) data. Of 3.4 million households currently in forbearance, roughly 820,000 haven’t missed a payment.

Of those people who keep paying, 23% are Ginnie Mae borrowers, 20.6% are conventional-loan borrowers, and 28.6% of loans on banks’ balance sheets are current.

“That has been one of the most surprising aspects of this entire episode,” says Mike Fratantoni, MBA’s senior vice president and chief economist. “We’ve seen that share come down over time because some of those borrowers have exited forbearance.”

Observers call it “strategic forbearance,” with many homeowners taking on the option just in case.

“So long as the job market keeps improving and the housing market is in solid shape, there is a good potential for this to keep improving,” Fratantoni says.

Source: Bloomberg (10/07/20) Maloney, Christopher

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