Category Archives: Association News: Reprinted with permission Florida Realtors. All rights reserved

For Sale: $1 Palm Beach County Condos – But with a Catch

In some golf communities, the additional buy-in fee can be more than $80K with annual fees as much as $30K, so the cost of amenities overrides the cost of real estate.

BOYTON BEACH, Fla. – Jon Leiberman rarely plays the lottery but he felt like he won it this past June.

That’s when he became aware of $1 condos for sale at Hunters Run Country Club in Boynton Beach. Without ever seeing it, he bought a two-bedroom, two-bath, 1,400 square-foot condo. His Realtor, Elaine Perlmutter of Lang Realty, face-timed him pictures.

“I got the steal of the century,” Leiberman said.

He actually paid $1,500 but the condo came fully furnished and was in move-in condition. “It came with sheets and silverware. They even left tennis racquets.”

Leiberman, 44, who works in marketing and lives outside New Haven, Conn., got a free golf membership for the first year as part of a new Hunters Run program to attract younger buyers, a savings of $12,000. Leiberman said buying the condo was the best investment he ever made. He comes down every two months or so with his 12-year old son. His parents use it whenever they want.

The phenomenon of giveaway condos in Palm Beach County at places like Hunters Run and Boca West caught the attention of the New York Post last year. That is how Leiberman learned about them.

But why would anyone want to sell a piece of real estate in Palm Beach County for $1?

The biggest impediment to country club sales of small condos is that buyers have to pay one-time buy-in fees that can be more than $80,000. Other reasons include:

  • Golf is not as popular as it once was.
  • Annual carrying costs can be as high as $30,000.
  • More condos are on the market at the 30-year-old plus country clubs as owners have passed or moved into assisted-living facilities.
  • Some condo owners upgraded into single-family homes, and do not want to carry two units.
  • Some condos need major upgrades.

Sellers at Boca West and Hunters Run receive back 30% to 40% of their original buy-in fee when they sell. At Hunters Run, the refund is about $30,000. But savvy buyers often want some of that money as an enticement to buy.

At Boca West, a seller is willing to do just that. A $100 listing tells buyers to get their apartment “for free” with the seller offering to pay $10,000 toward the $70,000 buy-in. Five other condos at Boca West are listed for under $5,000; one is listed for $1.

But $1 sales aren’t going to be popping up at other country clubs. Some of them do not have condos and those that do have condos that are larger than those at Hunters Run and Boca West.

As for the expensive buy-in fees, Leiberman was fine with it. He recognizes the club needs the money to maintain and upgrade its amenities.

But for Patrick Niestzche of Arlington, Va., those buy-in fees were a deal breaker. At an auction three years ago, he paid $17,650 to Kingdom First Properties of Tampa to buy a Boca West condo. He claims Kingdom never told him about the $70,000 buy-in fee and when he learned about it, he refused to go through with the purchase.

A nasty lawsuit ensued between Niestzche, Kingdom, Boca West and Wells Fargo, the bank that auctioned off the condo. Now, Niestzche wants his money back. Boca West wants its buy-in. And Kingdom wants Niestzche to take the condo off its hands.

Niestzche’s lawyers claim Kingdom never disclosed the buy-in, a violation of state law. Kingdom blames Wells Fargo for not disclosing it at the auction. Kingdom took title to the condo but refused to pay the buy-in. Boca West recently obtained a judgment against Kingdom for nearly $154,000, and is expected to foreclose on the property.

Meanwhile, back at Hunters Run, Paul Ware of Brockton, Mass. agreed with his Realtor to list for $1.

“It is sad that it has come to this,” said Ware. “I have yet to receive an offer, and it has been nearly a year.”

Ware paid $64,000 for a second-floor unit in 2004. He said he stopped using the unit three years ago. He pays for a social membership but his annual carrying costs still total $27,000 a year. Those carrying costs include property taxes, homeowner association fees and a minimum that must be spent at restaurants.

“It is like throwing money down the drain,” he said. But Ware is not prepared to give back part of his buy-in fee to facilitate a sale. “If they do not want it for a buck, then so be it. I will just hold onto it.”

Carolyn Liss of Hunters Signature Real Estate said one of her clients recently had to give back money to sell her Hunters Run condo. She joked she “inherited her mother’s debt.” Perlmutter, the Lang Realtor who worked with Lieberman, said she often feels like “the bearer of bad news” bringing lowball offers on giveaway condos.

Ben Schachter, president of Boca Raton-based Signature Real Estate companies, said buyers have a great opportunity to get into a quality country club at an amazing price but there are not enough buyers who are willing to undertake a remodeling project on a small condo, especially when the buy-in fee is considered.

Joel Schreiber, a buyer at Hunters Run, negotiated a deal that resulted in him being paid $6,000 to purchase his condo in May 2013. Records show he paid $4,000 but the sellers gave him $10,000 of the $30,000 they recovered from their buy-in fee.

Schreiber knew he was going to have to put a lot of money into the unit and it’s why he negotiated the deal he did. He installed hurricane-impact windows, bought new appliances, replaced the flooring and put in new bathrooms, lighting and air conditioning. His has a pristine view of the golf course.

“We made it into something that we are very happy with,” Schreiber said. “We love it here. We get the same amenities as does someone who bought for $1 million.” Those Hunters Run amenities include three golf courses, 21 Har-Tru tennis courts, a state-of-the art fitness club, a large community pool and seven restaurants.

Schreiber had lived in South Florida for some time before he bought at Hunters Run. “We were looking for a lifestyle, and we found it here,” he said. He plays cards several times a week, regularly uses the fitness center and often frequents the restaurants.

Like Leiberman, he supports the mandatory membership fee. It is needed to maintain the golf courses and all of amenities, Schreiber said, claiming that clubs without mandatory memberships are falling apart.

Hunters Run has recently adopted a renovation program to address the $1 sales. The club takes title to distressed units and then works with contractors to renovate the unit. The buy-in fee is either partially or completely waived depending on how quickly the contractor is able to sell it, according to Jack Gorny, president of the Hunters Run Property Association. And the buy-in fee for someone who purchases through the program is $25,000 versus $60,000. The buyer, though, gets nothing back when the unit is sold. But the lower buy-in has helped Hunters Run sell 10 renovated units in the past year, Gorny said, with some of them selling for more than $80,000.

Boca West also has a similar renovator program. Efforts to obtain comment from Boca West were unsuccessful.

Gorny said the low-end sales at Hunters Run are pretty much restricted to second-floor condos with no elevators that have had little, if anything, done to them since they were built nearly 40 years ago. Owners have stopped using the unit and just want to move on, he said.

Susan and Arnold Rosenfeld’s condo fell into that category. They bought it in 1986 for $86,000. Two years ago, Susan sold it for $1. The family lawyer said Susan had stopped using it after her husband passed in 2016. “We needed to stop the hemorrhaging,” the lawyer said.

“Overall, Hunters Run sales have been very strong in recent years as a result of more than $13 million in improvements we have made,” Gorny said, noting that there have been 130 sales in the past 12 months, the most in a decade. Some of those sales were in excess of $500,000. He called the $1 sales an anomaly. Some of the single-family homes have appreciated more than 40% in the past three years, he said.

Meanwhile, Leiberman may be bringing buyers into Hunters Run. He said some of his friends from Connecticut are interested.

“These $1 sales will be gone someday,” he tells them. “I want them to come down so we can all retire together.”

© 2020 The Palm Beach Post (West Palm Beach, Fla.), Mike Diamond. Distributed by Tribune Content Agency, LLC.

New-Home Starts Jumped 16.9% Higher in Dec.

It’s the highest level in 13 years as the single-family home-start component rose 11.2%. For all of 2019, builders broke ground on 1.29M homes – the most since 2007.

WASHINGTON (AP) – Construction of new homes surged in December to the highest level in 13 years, capping a year in which falling mortgage rates and a strong labor market helped lift the prospects of the housing industry.

The Commerce Department reported Friday that builders started construction on 1.61 million homes at a seasonally adjusted annual rate in December, up 16.9% from the November pace of home building.

Housing construction has been rising since July, helped by falling mortgage rates and increased demand as the unemployment rate approached a half-century low. For the year, builders started work on a total of 1.29 million homes, the best showing since 2007.

The December building rate was the strongest number since December 2006 during the last housing boom.

Applications for building permits, considered a good sign of future activity, fell 3.9% in December to an annual rate of 1.42 million but remained well above the pace in July.

Construction of single-family homes rose 11.2% to an annual rate of 1.06 million homes last month while apartment construction fell 9.6%.

The 1.29 million units constructed for all of 2019 was up 3.2% from the previous year and the best showing since 1.36 million homes were built in 2007. As the housing boom was reaching its peak, construction was started on a total of 2.07 million homes in 2005, the highest total for any year in that boom.

By region, construction was up 25.5% in the Northeast, 37.3% in the Midwest, 9.3% in the South and 19.8% in the West.

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

What Should the Army Corps of Engineers Fix in Fla.?

Fla. Senators Marco Rubio and Rick Scott sent a letter to the Army Corps that requests funding for Fla. environmental projects. The list includes 70 items with impacts across the state, from the Atlantic Intracoastal Waterway in South Fla. to Pensacola Harbor.

WASHINGTON – The U.S. Army Corps of Engineers is finalizing their Fiscal Year 2020 work plan, to ensure that, “all proposed and ongoing projects in Florida receive full and fair consideration of their value to local communities, our state, and our nation.”

Florida has a lengthy roster of public projects that fall under the Army Corps of Engineers, and its two U.S. senators – Sens. Marco Rubio and Rick Scott – sent a letter outlining each one to the Assistant Secretary of the Army – Civil Works.

Overriding goals, the senators said, include “maintaining record progress towards the restoration of Florida’s Everglades through projects like the Central Everglades Planning Project and Everglades Agricultural Area Storage Reservoir.”

Projects with “significant momentum towards completion”

  • C&SF Project Flood Control Restudy* – Proposed to improve the efficacy and cost-effectiveness of South Florida’s aging water management infrastructure in concert with concurrent efforts to enhance the region’s water management and resilience, including through CERP, LOSOM, and the South Atlantic Coastal Study.
  • C&SF Upper St. Johns River Basin* – S252 construction repairs and project close out activities
  • Caño Martín Peña, PR – New start required for an urgently needed ecosystem restoration project with flood control benefits.
  • Collier County, Beach Erosion Control*
  • Dade County, Beach Erosion Control and Hurricane Protection Project* – Incorporate Key Biscayne Shore Damage Mitigation, Key Biscayne, as part of this project.
  • Daytona Beach Flood Protection Project*
  • Florida Keys Water Quality Improvements
  • Fort Pierce Beach*
  • Jacksonville Harbor Deepening
  • Jacksonville Harbor, Mile Point, – Payments owed to non-federal sponsor
  • Lee County, Beach Erosion Control*
  • Lido Key, Shore Protection Project*
  • Manatee County Improvements,
  • Miami Back Bay Study*
  • Miami Harbor Channel – Payments owed to non-federal sponsor.
  • Miami Harbor Improvements
  • Monroe County, Shore Protection Project*
  • Okaloosa County, Shore Protection Project*
  • Panama City Harbor
  • Pinellas County, Shore Protection Project*
  • Port Everglades Harbor Deepening, – New start required.
  • Putnam County Comprehensive Water Supply Infrastructure Modernization Project (Palatka)
  • South Atlantic Coastal Study*
  • South Dade Flood Protection Project* – Study, design, and construction of a comprehensive seepage management solution along the boundary of the eastern Everglades to maintain current levels of flood protection service for landowners subjected to a rising water table
  • South Florida Ecosystem Restoration, – To include: Bird Drive Basin Conveyance, Seepage Collection, and Recharge – Biscayne Bay Coastal Wetlands – Broward County Water Preserve Areas – C-111 South Dade – C-111 Spreader Canal – Central Everglades Planning Project – Indian River Lagoon-South (C-44 Reservoir and Stormwater Treatment Area, C-23/C-24 Reservoirs) – Kissimmee River Restoration – Lake Okeechobee Watershed Restoration – Loxahatchee River Watershed Restoration – Picayune Strand – Western Everglades Restoration
  • St. Augustine Back Bay Study*
  • St. Johns County, Shore Protection Project* – Feasibility study for potential North Ponte Vedra Beach segment
  • Tampa Harbor Improvements, – General Re-evaluation Report to support improved channel navigability and reduce increasing annual O&M needs

*Denotes those projects with expressed feasibility, PED, or construction capabilities in FY20 that could be fulfilled via otherwise unallocated disaster supplemental funds provided by division B, title IV of the Bipartisan Budget Act of 2018 or title IV of the Additional Supplemental Appropriations for Disaster Relief Act, 2019.

Continuing Authorities Program (CAP) projects critical to local communities

  • Alligator Creek, Starke, (Sec. 205)
  • Big Fishweir Creek, Jacksonville, (Sec. 206)
  • Ft. George Inlet, Jacksonville, (Sec. 111)
  • Lake Toho Restoration, Osceola County, (Sec. 1135)
  • Lake Worth Lagoon, Palm Beach County, (Sec. 1135)
  • Pahokee Restoration, Pahokee, (Sec. 1135)
  • Porpoise Point Shoreline Restoration Project, St. Johns County, (Se. 103)
  • St. Francis Barracks Seawall, St. Augustine, (Sec. 14)

Operation and maintenance funding with legally obligated outstanding payments

  • Atlantic Intracoastal Waterway – Includes the Fernandina to St. Johns River, St. Johns River to Miami, and Miami to Key West segments
  • Anclote River, – Project requires immediate restoration of funding for dredging activities lost via emergency reallocation in the aftermath of 2018 disasters.
  • Apalachicola, Chattahoochee and Flint Rivers, GA, AL & FL
  • Apalachicola Bay
  • Canaveral Harbor
  • Central & Southern Florida
  • East Pass Channel, Destin,
  • Escambia and Conecuh Rivers
  • Fernandina Harbor – Kings Bay
  • Fort Myers Beach
  • Fort Pierce Harbor
  • Gulf Intracoastal Waterway – Includes the Florida portion of the Northern Gulf Intracoastal Waterway and the Western Gulf Intracoastal Waterway (Caloosahatchee River to Anclote River)
  • Inspection of Completed Works
  • Jacksonville Harbor
  • Jim Woodruff Lock and Dam, Lake Seminole,, AL & GA – Includes need for shoreline management activities and enhanced aquatic plant control
  • Lake Okeechobee System Operating Manual revision
  • Manatee Harbor, – Includes need for reimbursements as directed in Senate Report 116-102 and additional funding for the Port Manatee Dredged Material Disposal Area.
  • Miami Harbor
  • Naples to Big Marco Pass, Collier County
  • Okeechobee Waterway
  • Palm Beach Harbor
  • Panama City Harbor
  • Pensacola Harbor
  • Port Everglades Harbor
  • Port St. Joe Harbor
  • Project Condition Surveys
  • Removal of Aquatic Growth
  • St. Augustine Harbor
  • St. Johns River
  • Suwannee River
  • Scheduling Reservoir Operations
  • South Florida Ecosystem Restoration – Includes payments owed to the South Florida Water Management District and the Seminole Tribe of Florida for work performed by local project sponsors
  • Tampa Harbor – Includes need for advanced maintenance funds to ensure short-term navigability of federal channel for post-Panamax vessels
  • Water/Environmental Certification

© 2020 Florida Realtors®

Financially Troubled Fla. Insurers Agree to Takeovers

Two Fla. property insurers with about 67K policies – Anchor Property & Casualty and Centauri Specialty Insurance Co. – will be folded into larger, more stable companies.

TALLAHASSEE, Fla. – Two financially troubled Florida-based property insurers with about 67,000 policies statewide have agreed to be taken over by larger, more stable companies.

The absorption of 43,000 homeowner policies from Anchor Property & Casualty by HCI Holdings, and the takeover of Centauri Specialty Insurance Co. and its 24,000 policies by Avatar Partners LP, follows warnings that up to 18 Florida-based insurers soon could lose their top financial stability ratings.

Joe Petrelli, president of ratings agency Demotech Inc., had warned recently that two to four Florida-based companies would be downgraded from A-Exceptional by mid-January. Downgrades, while not necessarily a mark of insolvency, can be problematic for policyholders with federally backed lenders that require insurance only from A-rated carriers.

Demotech on Tuesday announced it had downgraded Anchor’s rating from A-Exceptional to M-Moderate. But that won’t matter to Anchor’s customers, including more than 11,000 in South Florida, after Tampa-based HCI Group finalizes its agreement for its subsidiary Homeowners Choice Property & Casualty Insurance Co. to acquire the Anchor policies. Anchor is based in St. Petersburg.

Demotech announced that Sarasota-based Centauri Specialty Insurance Co., which has more than 24,000 customers in Florida and 9,826 in South Florida, would retain its A rating after agreeing to be acquired by Avatar Partners LP, parent of Tampa-based Avatar Property & Casualty.

Financial terms were not disclosed for either deal. Prior to the announcement, Homeowners Choice was one of the 20 largest insurance companies in the state with more than 108,000 policies. It will likely move into the top 10 after the deal is complete. Avatar, meanwhile, had about 57,000 policies, according to a tally by the state Office of Insurance Regulation.

Decisions about other companies likely will take place in February and March, in conjunction with deadlines for those companies to file their year-end financial statements, Petrelli said.

The Florida Office of Insurance Regulation “is working with the companies to ensure consumers have seamless access to coverage,” agency spokeswoman Alexis Bakofsky said by email. HCI’s takeover of Anchor should be finalized by mid-February, she said. Avatar did not respond to requests for comment Thursday.

The Centauri acquisition must be approved by the agency, but it has not yet received a formal proposal, Bakofsky said.

The potential for ratings downgrades for up to 18 companies stems from the convergence of numerous pressures in Florida’s marketplace, Petrelli said this week, including heavier than projected claims activities from recent hurricanes and other extreme weather events, a failure to seek regulators’ approval for rate increases at levels high enough to fund incoming claims, plus numerous years of escalating rates of litigation.

Remedies suggested by Demotech for companies that want to retain their A financial stability ratings include increasing annual rates more than 15%.

© 2020 the Sun Sentinel (Fort Lauderdale, Fla.), Ron Hurtibise. Distributed by Tribune Content Agency, LLC.

Flood History Website Could Give Buyers a New Tool

A research partnership working with eight universities says its online tool, searchable by address, will offer flood histories and future risk estimates by mid-2020.

NEW YORK – On Jan. 13, First Street Foundation launched Flood Lab, a research partnership that provides eight universities with its model that maps previous instances of flooding as well as future risks.

Using the dataset, the Wharton Business School at the University of Pennsylvania, the Massachusetts Institute of Technology, Johns Hopkins University and others will quantify the impacts of flooding on the U.S. economy.

The data will be made available to the public in the first half of 2020 in an online database searchable by home address. Matthew Eby, executive director of First Street Foundation, says the move could put pressure on prices of homes, municipal bonds and mortgage-backed securities linked to real estate in risk-prone areas.

Currently, insurers, mortgage lenders and investment firms obtain flood risk information from risk modeling firms like AIR Worldwide, CoreLogic and Risk Management Solutions. Verisk estimates that about 62 million American homes have a moderate to severe risk of flooding.

But Carolyn Kousky, executive director of the Wharton Risk Center, says Flood Lab could become disruptive in that it would provide data to the average homeowner to help them make the right decision for themselves.

Source: Reuters (01/14/20) Duguid, Kate

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

RealPage: 50% More Apartments Arriving This Year

2020 will mark a 40-year high for new apartments – but 80% are luxury, a niche with light demand, and a smaller percentage will appeal to lower-income families.

NEW YORK – Builders are on the path to complete more new apartments in 2020 than in the past 40 years. In that feat, they’re increasingly targeting the luxury sector for adding new apartments.

About 371,000 new rental units are set to arrive across the country this year, a 50% increase over the number of new units that were completed last year, according to an analysis from RealPage. About 80% of that new supply is expected to come from luxury developments.

“A lot of these properties are competing for a small group of renters,” Greg Willett, RealPage chief economist, told The Wall Street Journal. “A typical renter can’t afford this brand-new product.”

Developers say that the rising costs of land and construction have forced them to cater to more affluent renters to maximize their profits. “It’s very difficult financially to make sense of building a cheaper product,” says Cyrus Bahrami, a managing director of Alliance Residential, a Houston developer.

Some housing analysts, however, believe the focus on the luxury sector of apartment construction isn’t necessarily a bad thing for lower-income renters. The analysts say that the additional units may encourage more renters to move up to better apartments and, therefore, free up some more affordable apartments in the market.

High-end buildings (or what the industry refers to as “Class A” properties) are about $500 higher than just one lower class down for rentals, WSJ reports. That gap is about $300 higher than a decade ago.

Source: “Aiming at Wealthy Renters, Developers Build More Luxury Apartments Than They Have in Decades,” The Wall Street Journal (Jan. 15, 2020) [Log-in required.]

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

Why Buy a Home? Owners Less Stressed than Renters

Many renters think they save money when they look at closing costs and upkeep, but that’s a short-term outlook. Over the long-term, ownership is financially better.

LAS VEGAS – The U.S. Census defines cost-burdened households as a household that spends at least 35% of their monthly income on household costs (including their mortgage, utility bills, property taxes, and other costs associated with homeownership). In other words, cost-burdened households are households that may feel a significant financial strain (or burden) as a result of owning their home.

But the good news? Cost-burdened households in the U.S. are on the decline.

According to recent census data (outlined in an article for Realtor Magazine), only 20.9% of homeowners with a mortgage were cost-burdened in 2018. That’s down from 28.8% a decade ago-a drop of nearly 8%. The percentage of cost-burdened homeowners is also significantly less than cost-burdened renters, at 40.6%.

Many people continue to rent because they think that it’s the more affordable option – and that owning a home is out of their reach. But, as it turns out, rents have seen sharp increases across the country – while the average mortgage payment has actually fallen.

According to a report from CoreLogic, the “typical mortgage payment” (a monthly mortgage payment based on the U.S. median home sale price that incorporates both principal and interest) has decreased four percent since 2005, while the monthly cost to rent a single-family home has increased by 36%. Renters are also more cost-burdened than homeowners, with nearly half (46%) spending more than 30% of their total income on rent (compared to just 27% of homeowners).

If you’ve been renting as a way to save money, it might be time to rethink your strategy. Rent has been steadily increasing across the U.S. in recent years, and in many cases it’s now less affordable than owning a home. So if you’ve been thinking about purchasing your own home, now is a great time to make a move.

The fact that fewer homeowners in the U.S. are cost-burdened and that you’re far more likely to be cost-burdened as a renter is good news if you’ve been thinking about buying a home. Whether you buy or rent, the true key is to always try and keep your housing costs below 35% of your monthly income. In other words, live within your means.

© Copyright © 2020 Carson Now LLC, Carson Now, Krisha Caraway. All rights reserved.

Long-Term Mortgage Rates Edge Up a Bit – 30-Year at 3.65%

The slight increase from last week’s 3.64% keeps rates solidly in the “good time to apply for a home loan” category. One year ago, the average FRM was 4.45%.

WASHINGTON (AP) – U.S. long-term mortgage rates rose slightly last week after financial markets that had been roiled by the U.S.-Iran conflict stabilized.

Mortgage buyer Freddie Mac said Thursday the average rate for a 30-year fixed-rate mortgage ticked up to 3.65% from 3.64% last week. The benchmark rate was 4.45% a year ago.

The average rate on a 15-year mortgage increased to 3.09% from 3.07% last week.

Loan rates regained the stability they’ve shown in recent months, buttressed by positive economic data, a strong job market, and improved sentiment in the housing market, which saw a slowdown early last year.

Freddie Mac surveys lenders nationwide between Monday and Wednesday each week to compile its mortgage rate figures. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates.

The average fee on 30-year fixed-rate mortgages remained at 0.7 point this week. The average fee for the 15-year mortgage also held at 0.7 point.

The average rate for a five-year adjustable-rate mortgage rose to 3.39% from 3.30% last week. The fee was unchanged at 0.3 point.

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

How Much Savings Can a Higher Credit Score Unlock?

Even a fair credit score costs you money: A buyer with a fair score pays $41.4K more than a good score over 30 years – and all other forms of credit cost more too.

NEW YORK – A higher credit score could mean thousands of dollars in savings on a mortgage, according to a new study from LendingTree that compares very good credit scores to fair ones. A fair credit score is considered to be one in the range of 580 to 669, while a very good credit score ranges from 740 to 799.

The average borrower with a fair credit score will pay about $261,076 in total interest over the lifetime of their mortgage. On the other hand, a borrower with a very good score will pay $219,660 – a $41,416 difference.

When LendingTree broke down the most common type of debts – credit cards, student loans, auto and more – mortgages occupied the highest in interest paid by a borrower by far.

LendingTree says that raising a credit score actually isn’t that difficult to do. A consumer can notice changes quickly too – even “substantial changes in a matter of days or weeks for things like paying down credit or debt,” researchers note. “Those who plan to take out a mortgage or other loan type should refrain from opening new credit accounts, as credit checks and young accounts can lower your credit rating.”

Credit monitoring can help identify what is having the biggest impact on your credit. Also, other steps to help improve a credit score:

  • Pay bills on time
  • Keep balances low or, better yet, payoff credit card debt completely
  • Don’t close unused cards
  • Keep your debt-to-income ratio low

Source: “Raising a ‘Fair’ Credit Score to ‘Very Good’ Could Save Over $56,000,” LendingTree (Jan. 7, 2020)

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

Home Builders Remain Bullish Heading into 2020

The index gauging builder confidence bumped one point lower to 75 this month, but each of the two previous months broke 20-year optimism records.

WASHINGTON – Builder confidence in the market for newly-built single-family homes edged one point lower to 75 in January, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). However, the last two monthly readings mark the highest sentiment levels since July 1999.

“Low interest rates and a healthy labor market combined with a need for additional inventory is setting the stage for further home building gains in 2020,” says NAHB Chairman Greg Ugalde.

NAHB Chief Economist Robert Dietz predicts that the “steady rise in single-family construction that began last spring will continue into 2020” thanks to a pause in Federal Reserve interest rate hike and “attractive mortgage rates. “However, builders continue to grapple with a shortage of lots and labor, while buyers are frustrated by a lack of inventory, particularly among starter homes,” he adds.

The HMI index charting traffic of prospective buyers increased one point to 58 – the highest level since December 2017. The gauge measuring current sales conditions fell three points to 81 and the component measuring sales expectations in the next six months held steady at 79.

Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 62, the Midwest increased three points to 66 and the West moved one point higher to 84. The South remained unchanged at 76.

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

© 2020 Florida Realtors®

Foreclosures a Non-Event Now – Activity Hits 15-Year Low

Total 2019 U.S. foreclosure activity – default notices, scheduled auctions and bank repossessions – was down 21% compared with 2018 and 83% from its 2010 peak. 

IRVINE, Calif. – ATTOM Data Solutions’ Year-End 2019 U.S. Foreclosure Market Report finds that foreclosure filings – default notices, scheduled auctions and bank repossessions – were down 21% from 2018 and down 83% from a peak of nearly 2.9 million in 2010. It’s the lowest level of foreclosures since ATTOM began tracking them in 2005.

If a homebuyer receives help for their down payment, is there a higher risk they’ll later face foreclosure? According to a Fed working paper, the answer is no. The share of FHA-backed loans made with down payment help jumped from 30% in 2011 to almost 40% last year.

Bank repossessions alone are down 86% over the same period. Lenders repossessed 143,955 properties through foreclosure (REO) in 2019, but that’s down 37% from 2018 and down 86% from the peak in 2010 for a record low. Still, Florida and California combined have seen more than 1.5 million foreclosures in the past 10 years.

ATTOM’s numbers present mixed messages for Florida and its metros. While foreclosure starts were down statewide, for example, more Orlando homeowners received a first-notice in 2019 than did in 2018 (up 16%).

And Florida, at times the top state in the nation for foreclosures, came in as No. 4 in 2019. New Jersey topped the list followed by Delaware and Maryland. New Jersey has held the top spot since 2015.

Two state metro areas made ATTOM’s “top metro foreclosure rates in 2019” list. Jacksonville came in at No. 3 with a 0.85% foreclosure rate and Lakeland ranked at No. 5 with a 0.81% foreclosure rate. However, when the list is shortened to only those metro areas with a population of at least 1 million people, ATTOM lists Jacksonville as No. 1.

Foreclosure analysis

 “The continued decline in distressed properties is one of many signs pointing to a much-improved housing market compared to the bad old days of the Great Recession,” says Todd Teta, chief product officer for ATTOM Data Solutions. “That said, there is some reason for concern about the potential for a change in the wrong direction, given that residential foreclosure starts increased in about a third of the nation’s metro housing markets in 2019. Nationally, the number also ticked up a bit in December. While that’s not a major worry, it’s something that should be watched closely in 2020.”

“The home-foreclosure rates continued shrinking dramatically across the United in 2019 to a level not seen in 10 years, as the strong economy leaves more people in a position to make their mortgage payments,” adds Ohan Antebian, general manager for ATTOM’s consumer facing business, RealtyTrac. “Completed foreclosures dropped 37% overall, with decreases in all but one state and almost every metro housing market.”

Good time to sell

“With foreclosure inventory down and interest in that inventory up, it’s a good time for sellers with distressed inventory to sell while the sun shines,” says Daren Blomquist, vice president of market economics with “Foreclosure buyers still enjoy sizable discounts below estimated market value due to the distressed nature of foreclosure inventory, but the average sales price for foreclosure auction properties sold through the platform rose to a new record high in 2019 even as the rate of sales to third-party buyers increased.”

It took an average 384 days for a property to get through the foreclosure process in the fourth quarter of 2019 – a 1% decline quarter-to-quarter but an increase of 3% year-to-year. Still, Florida didn’t make ATTOM’s top five list of foreclosure-completion states. The top five at the end of 2019 were Hawaii (1,712 days), Indiana (1,629 days), Arizona (1,434 days), Nevada (1,339 days) and Georgia (1,257 days).

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

Fla. Agrees to Acquire 20K Acres of Everglades Wetlands

Water Conservation Area 3 – an area spanning the western side of Broward County and in the Everglades Protection Area – will be permanently spared from oil drilling.

FORT LAUDERDALE, Fla. – Gov. Ron DeSantis announced that the Florida Department of Environmental Protection (DEP) reached an agreement with Kanter Real Estate LLC to purchase 20,000 acres of critical wetlands in Water Conservation Area 3 (WCA 3) – an area on the western side of Broward County in the Everglades Protection Area. It’s Florida’s largest wetland acquisition in a decade.

“One of my administration’s top environmental priorities has been expediting Everglades restoration,” said Governor DeSantis. “Today we take another step in the right direction by reaching this agreement,” DeSantis said when making the announcement. “This significant purchase will permanently save these lands from oil drilling. I’m proud of our progress but also recognize this is just the beginning. I will continue to fight every day for the Everglades and Florida’s environment.”

After this latest WCA3 acquisition closes, it will have nearly 600,000 acres of wetlands permanently protected in public ownership for restoration and recreation.

“Having these wetlands in public ownership supports expedited restoration work on the EAA Reservoir and other critical Everglades projects, provides recreational opportunities for residents and visitors and protects the wildlife habitat of more 60 endangered and threatened species,” adds DEP Secretary Noah Valenstein

The leaders of Florida environmental groups agreed with the purchase.

“Florida is making a hefty investment in the largest ecosystem restoration project in the world to ensure that clean water is available to rehydrate America’s Everglades,” says Audubon Florida Executive Director Julie Wraithmell. “Drilling for oil in the Water Conservation Area is incompatible with our commitment to restore this fragile ecosystem. This land is part of our water supply.”

We’re “thrilled that the Kanter property can now be acquired for restoration, and will be protected from oil and gas exploration,” says National Parks Conservation Association Senior Everglades Program Manager Cara Capp. “Floridians know that oil drilling and exploration in the Greater Everglades is dangerous and must be stopped – it threatens our water supply and fragile ecosystems, especially in the face of climate change impacts.”

© 2020 Florida Realtors®

The Good News: No Fla. City in Top 25 for Bedbugs

The top U.S. city for bedbug infestations? Washington, D.C. But even if Fla. metros seem safe, every out-of-state visitor is a potential carrier of bedbug hitchhikers.

WASHINGTON – A bedbug infestation in a home can be an owner’s worst nightmare. These tiny bugs, 4-5 mm in length with red to dark brown colors, can easily travel from place to place, hitching rides on luggage and purses and ultimately take up residence inside a home.

Even with a warm and seemingly hospitable climate, however, Florida metros don’t place in the latest infestation-call report released by Orkin, a national pest control company.

Washington, D.C., topped Orkin’s list this year, while Baltimore fell to second place after three years in the No. 1 spot. Orkin’s list is based on treatment data from Dec. 1, 2018, to Nov. 30, 2019. The rankings reflect both residential and commercial treatments.

  1. Washington, D.C. (+1 on this year’s list compared to last year)
  2. Baltimore (–1)
  3. Chicago
  4. Los Angeles
  5. Columbus, Ohio
  6. New York
  7. Detroit (+1)
  8. Cincinnati (–1)
  9. Indianapolis (+5)
  10. Atlanta (–1)
  11. Cleveland
  12. Philadelphia (–2)
  13. San Francisco (–1)
  14. Raleigh, N.C. (–1)
  15. Norfolk (+2)
  16. Champaign, IL (+7)
  17. Dallas (–2)
  18. Grand Rapids (+2)
  19. Pittsburgh (+6)
  20. Charlotte (–1)
  21. Richmond, Va. (–5)
  22. Greenville, S.C. (–4)
  23. Knoxville, Tenn. (–1)
  24. Buffalo, N.Y. (–3)
  25. Greensboro, N.C. (–4)

“The key to preventing a bedbug infestation is early detection,” says Chelle Hartzer, an Orkin entomologist. “When one or more bedbugs enter a space, we call it an introduction. During an introduction, bedbugs probably haven’t started reproducing yet – but they could soon. Vigilance is key to stopping bedbugs before infestation levels.”

The top three places that pest professionals most often find bedbugs: single-family homes, apartments and condos, and hotels and motels.

One sign of a bedbug infestation, according to Orkin: Small black, ink-like stains left behind on a bed.

Bedbug avoidance tips

  • Check the places where bedbugs hide during the day, including mattress tags and seams, and behind baseboards, headboards, electrical outlets and picture frames.
  • Decrease clutter around the home so it’s easier to spot bedbugs.
  • Inspect a residence regularly – when moving in, after a trip, when a service worker visits, or after guests stay overnight.
  • Examine all secondhand furniture before bringing it inside. (Orkin says it’s a common way for bedbugs to be introduced into homes.)
  • Wash and dry bed linens often, using the hottest temperature allowed for the fabric.

Source: Orkin

© 2020 Florida Realtors®

Decade-Long Legal Battle Ends Over Houseboat Owners’ Rights

After two trips to the U.S. Supreme Court, Riviera Beach will pay $875K for seizing a man’s houseboat. The ruling: Just because something floats doesn’t make it a boat.

WEST PALM BEACH, Fla. (AP) – Having twice failed to get its way at the U.S. Supreme Court, the city of Riviera Beach has agreed to pay $875,000 to settle a decade-long legal battle that began over a floating home.

The settlement was reached Monday and will be presented to the City Council for approval next month, the Palm Beach Post reported.

The city of Riviera Beach has already spent more than $1 million in attorneys’ fees since 2006, when its fight began with Fane Lozman, a retired U.S. Marine who became a millionaire after inventing software used to track stock trades.

The U.S. Supreme Court ruled in 2013 that the city had no right to seize and destroy Lozman’s 60-foot floating home by invoking centuries-old maritime laws.

Lozman had docked the home in the city marina and began protesting a now-abandoned multibillion-dollar redevelopment plan. The Supreme Court left it up to a district judge to determine how much the home was worth, and Lozman received nothing.

After both sides returned to the Supreme Court, the justices said in 2018 that they were deeply disturbed that Riviera Beach council members silenced Lozman by having him arrested while he was speaking to them during a 2006 meeting, and sent the case back to lower courts.

U.S. District Judge Donald Middlebrooks took over the case in December and told both sides to resolve their differences. The proposed settlement would cover legal fees; the city also agreed to pay Lozman a single dollar.

Lozman said his lawsuits clarified important areas of law.

In the floating home case, which Chief Justice John Roberts called his favorite of the term, the court cleared up a murky area of law, ruling that just because something floats, doesn’t make it a boat.

In the First Amendment case, Lozman said the high court put government agencies on notice that they can’t silence critics.

“You can fight city hall, but you better be able to give up half of your adult life to do it,” Lozman said.

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

Flu Season Arrives Early – Be Careful in Public Settings

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Who Are Your Sellers? Average Fla. Homeowner 55 Years Old

Homeowners in Fla.’s four biggest metros are older than metro counterparts across the U.S. In all four Fla. cities, current homeowners’ average age is 55 or older.

MIAMI – Homeowners in Florida’s four biggest metro areas are older than most of their counterparts across the U.S. According to a study by LendingTree, Florida is clearly a popular haven for retirees, while Denver and Austin, Texas, have emerged as millennial hot spots.

LendingTree used Census data to study the average age of homeowners across the U.S. and ranked the nation’s 50 largest metros based on the average age of its homeowners, from youngest to oldest. The study also includes the home price growth and household income growth for each of the average age of homeowners.

The average age of a homeowner is 55 nationwide, and there is no metro in the study where the average is less than 50, LendingTree’s researchers note. “This high average age is due in part to the numerous obstacles that younger home buyers must face, from lack of savings to poor credit,” they note.

The metros with the highest average homeowner age: Miami (58.7); Tampa, Fla. (58.3); San Diego (57.1); Los Angeles (57.1); and New York (56.9).

On the other hand, the metros with the youngest homeowners are Salt Lake City (51.8); Austin, Texas (52.4); Raleigh, N.C. (52.5); Minneapolis (53.1); and Denver (53.2).

“In general, our study suggests that as homeowners get older, home prices and incomes grow more slowly,” researchers note.

Florida metro age rankings

  • Orlando is Florida’s youngest city in terms of average owner age at 55.7 years, which is still notably higher than the overall average age of 38.6 years. It ranked No. 28 among the 50 metro areas studied by LendingTree.
  • Jacksonville came in at No. 38, with an average homeownership age of 56.2 compared to an overall resident age of 39.2.
  • At No. 49, Tampa homeowners’ average age is 58.3 compared to an overall population age of 41.9.
  • Miami, at No. 50 and last on the list, the average age is 58.7 compared to an overall population age of 41.2.

Source: “LendingTree Compares Average Homeowner Age Across the 50 Largest U.S. Metropolitan Areas,” LendingTree (Dec. 9, 2019)

© Copyright 2019 INFORMATION INC., Bethesda, MD (301) 215-4688

iBuyers Taking Bigger Bite of Home Sales

The number of iBuyer sales in the U.S. doubled in one year, according to a 3Q report – but they still only made up 3.1% of all home sales in the 18 markets studied.

SEATTLE – iBuyers are growing and expanding their market share, though they still don’t make up a significant percentage of the home sales market.

The number of U.S. iBuyer sales almost doubled in one year, but they still only made up 3.1% of all home sales in the third quarter of 2019 in the 18 markets studied – a year-to-year increase from 1.6%, according to new research from Redfin. The study included public data on home purchases and sales made by iBuying firms like Opendoor, Zillow, Offerpad and RedfinNow.

iBuyers work largely in selected markets so far, so the total percentage of iBuyer sales would likely be smaller if it included every U.S. metro area.

The markets that saw the most iBuyer activity in the third quarter were in the South. iBuyers accounted for more than 4% of sales in Raleigh, N.C. (6.8%); Phoenix (5.1%); Atlanta (4.4%); and Charlotte, N.C. (4.3%).

iBuyers are instant buyers that use technology to make instant offers to home sellers in quick transactions. iBuyers usually charge a higher fee than a typical listing agent for the convenience of a quick, off-MLS sale. Interested home sellers often hope for a quick sale and find the iBuyer model a quick way to do that.

“iBuyers are concentrating their efforts in southern markets where both home sales and prices are poised for strong growth,” says Daryl Fairweather, Redfin’s chief economist. “We think that iBuyers are likely to accelerate home sales in these markets. Homeowners who may have been reluctant to sell because they didn’t want to deal with the hassle may be persuaded by the convenience of an iBuyer sale.”

iBuyers are centering the majority of their activity at a national median price point of $313,200.

“Focusing on these more affordable homes allows iBuyers to purchase more homes with the same amount of money,” Redfin notes in its study. “Affordable homes also tend to sell more quickly than expensive homes, which allows iBuyers to move through their housing inventory and buy additional homes more quickly, refining their process with every home they sell.”

Source: “iBuyers Bought More Than 4% of the Homes Sold in 4 Southern Markets Last Quarter,” Redfin (Dec. 11, 2019)

© Copyright 2019 INFORMATION INC., Bethesda, MD (301) 215-4688

Tentative Deal Would Avert Looming Federal Shutdown

National flood insurance – and the U.S. government for that matter – may not shut down Friday. Congress agreed on an extension it thinks the president will sign.

WASHINGTON (AP) – Senior lawmakers announced a tentative agreement Thursday on an almost $1.4 trillion government-wide spending bill that would stave off a federal shutdown next weekend and split the differences on a number of contentious issues.

The handshake agreement was announced by the chairwoman of the House Appropriations Committee, Rep. Nita Lowey, D-N.Y., and other top members of Congress.

“There’s a meeting of the minds,” Lowey said.

Details of the agreement were not announced and processing the sweeping measure is sure to take a few days. But it would award President Donald Trump with $1.4 billion in additional money for the U.S.-Mexico border wall, while giving the Democrats who control the House a number of their priorities such as expanded Head Start and early childhood education.

The measure is likely to pass the House next week just before the House votes on impeaching Trump. A Senate vote is expected before a temporary spending bill expires next Friday at midnight.

A White House official said Trump is likely to sign the bill because it maintains his ability to pay for the wall. The official spoke on condition of anonymity because the deal is not official.

A year ago, a deadlock over the wall led Trump to spark a 35-day partial government shutdown. The eventual agreement that emerged produced a template for the current pact: no “poison pill” policy provisions on topics such as abortion and the environment that could not pass muster with both Democrats and Republicans.

“We decided that the decisions would be made today,” said Rep. Kay Granger, R-Texas. “We said, ‘It’s time to get this thing done.’”

At issue are 12 annual spending bill that fund the day-to-day operations of federal agencies. The appropriations package fills in the long-overdue details of this summer’s budget and debt pact, which offered boosts to both the Pentagon and domestic agencies instead of the sharp across-the-board spending cuts required under a now-defunct 2011 budget agreement.

Key factions supporting the sprawling package include GOP defense hawks and Democrats, who won increases for domestic programs. The probable – and deeply unpopular – alternative would be to mostly run the government on autopilot and give back about $100 billion in spending increases from the July budget deal.

The drive for a spending agreement faced numerous hurdles, but it always had strong support from the top four leaders in Congress, especially House Speaker Nancy Pelosi, D-Calif., and top Senate Republican Mitch McConnell of Kentucky, two veterans of the appropriations process with a long history of assembling the votes for catchall spending bills. Their relationship has soured but they are a potent force when they team up.

The emerging measure is also likely to serve as the vehicle to carry into law several provisions unrelated to agency money; the spending bill is the last, best option to accomplish that.

They probably will include: a renewal of the Export-Import Bank’s charter; a reauthorization of government-backed terrorism risk insurance; a short-term extension of the federal flood insurance program; and further delays of Obama-era health law taxes such as those on medical devices and high-cost health plans.

A broader set of tax “extenders,” popular with Washington’s business lobbying community, appears stuck.

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

Economist Survey Predicts Only 33% Chance of 2020 Recession

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Housing Trust Fund’s Future Unclear in Florida House

The governor supports using all trust fund money for affordable housing, and bills in the House and Senate would make it official. But full funding isn’t a sure thing.

TALLAHASSEE, Fla. – After getting a brief overview of Gov. Ron DeSantis’ proposed $91.4 billion spending plan this week to fully fund the state’s affordable housing trust fund, nicknamed the Sadowski Trust Fund, Florida House Appropriations Chairman Travis Cummings said he anticipates some money may need to be taken from affordable-housing trust funds, a process called “sweeping.”

“I think sweeping is a possibility due to some really unmet needs out there, whether it’s with children and some of our most vulnerable,” Cummings, R-Fleming Island, said. “Not to say housing is not very important, but we’ve got people in the state who struggle, obviously, whether it be with healthcare or whether it be with the education system.”

In the past, legislators have frequently used the housing tax dollars, which are collected through doc-stamp taxes on real estate sales, on non-housing programs to balance the state budget.

With $387 million expected to be available for affordable housing, DeSantis’ proposed budget didn’t call for any money to be swept, to the delight of affordable housing advocates.

The Sadowski Housing Coalition, whose members include Florida Realtors, the Florida Coalition for the Homeless, Habitat for Humanity, Florida Chamber of Commerce and others, asked legislators to follow DeSantis’ lead last Monday.

Legislation has also been filed to protect affordable-housing trust fund money (SB 306 and HB 381) by making it tougher for lawmakers to use the cash for other purposes.

Florida Housing Coalition President Jaimie Ross said the proposed legislation would still give lawmakers access to the funds during a true crisis.

“We know the Legislature could use the trust funds, if needed, in an emergency. But they wouldn’t be the go-to,” Ross said.

Cummings called the legislation “irresponsible,” that would “tie future legislators’ hands.”

Source: News Service of Florida, Ana Ceballos, Dara Kam, Tom Urban, Jim Turner

If Gift-Giving Is a Competition, a Baltimore Broker Wins

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Citizens Insurance Again Looking for Ways to Reduce Risk

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Long-Term Mortgage Rates Rise, 30-Year at 3.73%

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A Dec. 20 Government Shutdown? It Happened Last Year

Both political parties say the U.S. government and flood insurance will be extended past Dec. 20 – but they said the same last year before a record 35-day shutdown.

WASHINGTON – Republicans and Democrats in Congress have just over a week to pass a dozen spending bills to fund the US federal government and avoid another shutdown.

This federal program, which is crucial to the Florida real estate industry, helps keep insurance affordable. Take a look at why the NFIP is so important.

It is a familiar pre-Christmas ritual in recent years. While the fiscal year begins on October 1, it has become common for the two political parties to wrangle over how funds are allocated for months afterwards. But this year’s debate takes place against an even more highly partisan backdrop than usual, with the House of Representatives expected to vote to impeach President Donald Trump next week ahead of a Senate trial in January.

With less than a year to go until the 2020 presidential election, Democrats and Republicans alike are keen to strike a deal, though the two parties remain deeply divided over issues such as funding for Trump’s border wall and other immigration-related programs, including migrant detention centers.

“The one thing that remains a certainty with the appropriations process is that it always comes down to the last minute, pretty much without exception,” said Shai Akabas, director of economic policy at the Bipartisan Policy Centre.

A failure to reach a full agreement last December led to a 35-day partial government shutdown, the longest in US history. The shutdown began on December 22 and ended on January 25 this year, after Trump and lawmakers agreed to a deal to reopen the federal government for three weeks.

A subsequent deal averted a second shutdown, after Trump gave up on his demands to build a wall on the U.S.-Mexico border.

The last shutdown damaged Trump’s approval ratings and cost the U.S. economy billions of dollars, as hundreds of thousands of federal employees were furloughed. Large numbers of government contractors also lost out on work.

Government shutdowns can also hit broader consumer and business confidence, as individuals and companies face difficulties accessing government services. For example, flights can be disrupted due to air traffic controller shortages, and initial public offerings can be delayed due to the closure of the Securities and Exchange Commission.

Nancy Pelosi, the Democratic House speaker, on Tuesday dismissed suggestions that last year’s events would be repeated, saying: “The budget bill, the appropriations bill, must be done to keep government open … We are not going to have a shutdown.”

Pelosi was speaking before a meeting with Treasury Secretary Steven Mnuchin, House Appropriations Committee Chair Nita Lowey, a Democrat, and Senate appropriations committee chair Richard Shelby, a Republican.

After the meeting, Mnuchin, who is acting for the White House in the negotiations, struck an optimistic tone, telling reporters: “I think we’re all working towards trying to get this done quickly.”

Democrats and Republicans have already compromised on government spending in recent months. Over the summer, Congress and the White House sealed a two-year budget deal that suspended the U.S. “debt ceiling” until 2021 and included an increase in annual spending.

The appropriations process, which allocates the federal funding agreed in the budget, remains incomplete, however. Last month, the president signed a “continuing resolution,” or short-term spending measure, to fund federal agencies up until December 20, but it is unclear if he would consider another to delay the need for a resolution until after an expected impeachment trial.

With a deadline fast approaching and a packed legislative calendar before Christmas, some on Capitol Hill are skeptical all 12 of the required appropriations bills can be passed by the end of the year.

“There really is a risk of a political shutdown, and it has nothing to do with budgeting,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “There is clearly the risk that passing a budget gets sucked into the vortex of the high-stakes political issues that are playing out right now… We are in unprecedented territory.”

MacGuineas, whose group advocates for deficit reduction, added she was concerned lawmakers would use any budget deal to push through additional costly spending measures.

“It is just becoming that typical Christmas tree in Washington, where everybody tries to stick their goody on it,” she said, in a reference to how members of Congress often seek to tack their own unrelated amendments on legislation.

Others remain optimistic that a deal can get done, especially after bipartisan agreements were reached this week on the National Defense Authorization Act and USMCA, the trade pact to replace NAFTA.

Pointing to USMCA, Akabas said: “Maybe there is some hope that constructive bipartisanship can reign at this stage in impeachment.”

© 2019 The Herald Provided by SyndiGate Media Inc. ( Financial Times.

Home-Flipping Drops Along with Investment Returns

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It’s a Wee Bit Harder for Some Buyers to Get a Loan

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Fed Stands Firm: No Interest Changes This Month

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Paid $84 for a Labor Law Poster? You May Get a Refund

Fla. AG Ashley Moody says the FTC has more than $1M to refund businesses that were scammed into paying for posters that the government hands out for free.

TALLAHASSEE, Fla. – Florida Attorney General Ashley Moody announced that the Federal Trade Commission (FTC) secured more than $1 million in restitution for small businesses targeted in a nationwide imposter scheme.

In the scam, Thomas Henry Fred Jr. and his affiliated businesses sent thousands of letters to small businesses that looked like invoices from a government agency. The letters directed the businesses to pay $84 for mandatory labor-law posters or face fines of up to $17,000. The same labor law posters are available for free from government agencies.

Through this scheme, Fred and his affiliated businesses received more than $800,000 from more than 9,000 businesses.

“Florida entrepreneurs take risks and invest in their employees to the benefit of our state’s economy,” says Moody. “It infuriates me that anyone would take advantage of responsible business owners trying to ensure they are in compliance with the law. I am proud of the investigative work of our Consumer Protection Division and the FTC to stop this government imposter scam and secure refunds for Florida’s small businesses.”

“Just because an invoice looks official doesn’t mean it is,” says FTC Bureau of Consumer Protection Director Andrew Smith. “If you get an official-looking bill that you don’t understand, call the government agency directly using the number you find online or in a local directory – not the one on the mailer.”

In addition to paying $1.2 million in restitution, the defendants are permanently banned from sending unsolicited direct mail to consumers, misrepresenting themselves as government agencies and misrepresenting that any goods or services they sell are being offered on behalf of a government agency.

These types of scams work because they appear official. As a result, scammers have become adept at making them look that way. To avoid future problems, Moody’s office recommends that you:

  • Double-check suspicious mail by calling the organization using an independently-sourced number – not the number listed in the mail itself
  • Verify invoices by keeping a list of all suppliers and vendors used
  • Avoid buying supplies or materials over the phone unless you have a prior relationship with the vendor
  • Ask for offer verifications in writing

Moody lists more tips for avoiding business scams on the Florida Attorney General website. Report scams to the Attorney General’s Office by calling 1(866) 9NO-SCAM or visiting

© 2019 Florida Realtors®

Artificial Intelligence Helps Cold Callers Sound Less Cold

“You’re speaking too fast,” says an AI computer prompt to a new Realtor cold-calling potential customers. “Think about how the customer is feeling. Try to relate.”

NEW YORK – “You are speaking faster than usual,” reads an alert on a computer screen. The call center agent on the phone with a customer can see a speedometer icon.

The conversation with the customer continues, as does the computer feedback. “Think about how the customer is feeling. Try to relate,” the artificial intelligence-powered tool interjects. The agent receives other notifications, from “extended silence” to “empathy cue,” which suggests the worker is lacking empathy.

For about 1,700 agents at the call center of Humana Pharmacy, the software called Cogito is becoming part of their work lives. It listens to most of their phone calls with customers nationwide and guides the agents on how to better communicate by analyzing vocal cues in conversations such as pitch, tone and rhythm of voices.

In recent years, global industries have seen considerable transformation brought by automation in the workplace. One-third of activities in about 60% of occupations worldwide could be automatable, according to a 2017 report by management consulting firm McKinsey & Co.

As the technology advances, AI has gained increasing presence. It could perform a widening range of tasks that previously were done by humans and has been used in recruiting and management processes.

The increasing prevalence of AI has boosted efficiency and reduced costs for companies but also has drawn concerns about job losses and hidden discrimination. Reuters last year unveiled that Amazon abandoned an AI recruiting tool in development, as the tech giant cannot fix its bias against women. Uber’s facial recognition technology reportedly didn’t process and recognize transgender drivers. A study published by New York University’s AI Now Institute in April shows how many AI systems favor white people and males.

Talking about such concerns around AI, Joshua Feast, Cogito’s co-founder and CEO, said its software doesn’t mean to replace anybody. “We’re a coach,” he said. “We’re sort of proud as a company that we’re helping workers do well on the job, helping customers have better experiences on the phone and helping our clients keep those customers.”

The company, which works with call centers of large insurance companies, including MetLife and Humana, retail banks and credit card issuers, says it has more than 25,000 users.

It helps to minimize bias that Cogito’s algorithm analyzes biological signaling mechanism, which largely is independent on language and culture, Feast said. The company also has deployed a secondary algorithm and a human annotation team to check for bias, he added. AI comes into play when humans get tired sometimes and suffer from “compassion fatigue,” according to Feast. “What the AI is really doing is helping somebody be more consistent in the course of the day.” The software also provides tools for supervisors to track the performance of team members and guide workers accordingly, though Feast said Cogito doesn’t function as “a performance management system.”

A customer agent at Humana handles 30 to 40 calls a day on average, according to Mark Morse, vice president of Humana Pharmacy’s service operations. “When you’re tired or on any given day, what happens at home and frustrations in life can come into the contact center,” he said.

But showing empathy is always important as the customers of life insurance companies usually are “in the midst of some of the most challenging moments of their lives,” said Kristine Poznanski, head of global customer solutions at MetLife.

Using Cogito is not compulsory at Humana, but the company is considering integrating Cogito’s assessment into its bonus mechanism to promote the software’s usage, said Morse.

When asked if human customer agents would one day disappear, Feast said he doesn’t think so, though the trend of automation has been growing – the share of customer service interactions handled by AI will reach 15% by 2021, according to research company Gartner. “Humans will always want to talk to other humans,” Feast said. “The reason is that only other humans really understand us.”

Copyright 2019,, USA TODAY, Frances Yue

Wage Growth Eclipses Mortgage Rate – First Time Since 1972

If the trend continues, it will empower more current renters watching their paychecks rise to save for a down payment and transition into homeownership.

NEW YORK – In October, wage growth eclipsed mortgage rates for the first time since 1972. The U.S. Department of Labor reported that average hourly earnings for production and nonsupervisory employees rose 3.8% in October on a year-over-year basis. Meanwhile, Freddie Mac data show that the average 30-year fixed mortgage rate was about 3.7% in October.

A year ago, before the Fed began easing, mortgage rates were closer to 4.9%. Experts note that if those trends continue, the combination will limit the debt burden for American households by keeping the share of would-be home buyers’ wages being spent on interest payments under control.

Meanwhile, economists J.W. Mason and Arjun Jayadev said U.S. household leverage rose from about 75% in 1983 to 160% in 2008, a trend that was finally arrested by the collapse of the housing bubble and ensuing financial crisis. They argued in a 2015 paper that the primary cause of the increase in household debt relative to income over that period was Fed policy, which kept interest rates well above the rate at which wages were growing.

According to Srinivas Thiruvadanthai, director of research at the Jerome Levy Forecasting Center, “The nominal interest rate has been higher than wage growth for a long time. If this is to be sustained it would be a positive development in setting the bottom 50 or 60% of the population on a sustainable footing.”

Source: Bloomberg (12/06/19) Boesler, Matthew

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