New Property Insurance Bill Approved

May 29th, 2008

Florida Property Insurance Costs didn't "drop like a rock" but at least for some time, they are not going up.

Florida Legislature has done a decent job, and the same can be said of our Governor. I would say they did the best they could, unlike the shoddy treatment given to Florida property tax issue.
Governor Crist signed yesterday the new law, called "homeowners' bills of rights". He signaled that the important consumer protections contained in the bill would help to keep insurance costs affordable. Since his election in 2006, Gov. Charlie Crist has made insurance relief one of his main goals, as seen in his constant objections to insurance companies rate hikes, and his intents of lowering insurance prevailing costs to the consumer.

New insurance regulations were all approved by the governor, with the exception of one provision that would allow up to 250 million to be lent by Citizens Property Insurance to small insurers. Also approved was the extension of rate freeze for Citizens policies.Increased penalties will be set for insurance companies in violation of Florida regulations.

His veto on the $250 million proposed loans to small insurance companies is not essentially against the program itself, but against the state-backed Citizens Property Insurance having to finance it, while its own finances could be challenged in the case of a major hurricane in the near future.

The Florida Insurance Council, which backs the small insurers program, hopes that it will be expanded next year, because of its good success track.
Essentially the new bill contains:

- Extension of the regulators' authority to block insurance companies' rake hikes.
- Freeze on Citizen's rate till January 2010.
- Prohibition of using arbitration panels in case of conflicts between insurers and state insurance officials, related to rates. Most states disallow these panels. In Florida's case the panels were used to approve rates, after state regulators had rejected them. The insurance companies would provoke regulators' rejections, by unreasonable demands, only to have the panels be the decision-makers.
- Maximum fines for violation of insurance state laws are doubled.
- The state must approve the methods used for hurricane prediction, which are essential in establishing insurance rates.
- Insurance companies cannot drop a policy holder without giving them a 180 days notice.
- They also must pay undisputed claims within 90 days of agreeing on the amount of the payment. Consumers were complaining that they were pressured into accepting low loss estimates on their claims by the threat of being held for many months and even years if the refused. Consumers can now accept the payment of the undisputed part of the claim, while resolving the remaining parts and start doing repairs on their damaged home, and get some prompt relief.

In general, the bill was well received by state regulators and consumer advocates, giving back to the state its control over rate increases and consumer protection. Insurance companies executives had mixed feelings.

Citizens' customers should be especially cheery about the new law. However, Florida Association of Insurance and Financial Advisors claims that Citizen customers' rate freeze benefits would be paid by all Florida's residential property owners if we are hit by a major hurricane. In effect, major Citizen's deficits would have to be covered by the totality of Florida insured homeowners by rate increases in their policies, regardless of which is their insurer. Like every summer, we'll cross our fingers.


Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com/
where you can search for Aventura Condos, Florida Condos,

Senate discusses foreclosure assistance legislation

May 20, 2008- Foreclosure legislation almost ready in the Senate.

Senators are informing that they are advancing in the bi-partisan task of structuring a program to avoid foreclosures and assist 500,000 distressed homeowners in refinancing their mortgages.

The discussions have not ended and nothing has been released yet. But the Legislature is trying to do something about the housing and foreclosures crisis, before it gets out of hand and pulls the whole country into a recession.

They announced that taxpayers would not be affected by the program. President Bush has threatened to veto a similar agreement voted by the House, which puts forward a different rescue plan.

Republican Senators are split on the agreement. Some have expressed their fear that, at the end, the program would be a bailout of investors, speculators, banks and lenders, at the expense of US taxpayers. The Senate plan is similar to the House bill already approved. Both are basically an expansion of FHA or government insurance on mortgages. Both require the lender or holder of the mortgage to accept a payment of 85% on the appraisal value of the property, as full payment. FHA (Federal Housing Administation) would use a 1.7 billion federal fund to boot the program.

In the Senate version, Fannie Mae and Freddie Mac, government created mortgage corporations, which stocks are publicly held, would capitalize a special fund for this purpose.

The proponents of the Senate program estimate that it will speed the downward correction of home prices, accelerate the bottoming of their values, and stabilize the market. At the same time it would prevent people from loosing their homes.

Another part of the proposed legislation would set up an oversight mechanism, to monitor Fannie Mae, FHA and Freddie Mac future financial health.

The House has not voiced opinion on the subject but a White House spokesman affirmed that it will look carefully at the plan, once it was approved by the Senate, with special consideration to FHA expansion not being footed by taxpayers and is done in a responsible and effective way.

Other points which are being considered are the tax credits proposed for first-time-home-buyers.

As long as we, the tax payers don't end up paying the bills and bailing out the big banks, hedge-funds, and Wall Street billionaires, I am OK.

I'll keep you posted.Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com
where you can search for Aventura Condos, Florida Condos,

My Spanish Real Estate Blog

I have noticed that a good part of people who contact me for real estate business are hispanic.

I have thought that perhaps they would enjoy reading in their native language and that is the main reason for setting up a new BLOG en ESPAÑOL, with the same purpose as this one.

Some articles will be a translation of the original posts. A few will be directly written in Spanish.
In all cases I will try to be as Hispanic as I can be. Actually I lived a portion of my life in South America.

Most of my Spanish-Speaking clients are actually immigrants residing in South Florida, or South American residents with an interest in Florida real estate investments or vacation homes in Florida.

Click on the following link to get to my new SPANISH BLOG

http://condosouthflorida.wordpress.com



Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com
where you can search for Aventura Condos, Florida Condos,

Marginal Growth in Florida Tourism - May 16, 2008

Here is the news on Florida Tourism, and here are my comments.


I would say that 2% increase in tourists from overseas is negligible.
These are the big spenders, who heavily weigh on our hotels occupancy, high-end restaurants and entertainment business, and potential investment.
With a weak dollar that has doubled the Euro's value if we compare it to a few years ago, and a Canadian dollar that has revaluated more than 50%, we would think that Florida tourism would be booming. The released anemic figures say that it's nothing that we can brag about.

One explanation that comes to my mind is the growing reputation that the US, and especially Florida, have been nurturing for the past few years, as an unfriendly destination, with heavy-handed officers at immigration airport counters. I have got this impression from a couple of customers and from what I read sometimes in the news, there is some truth in it.
In all truth, most foreign visitors love Florida and its infinite possibilities. Adequate investments in tourism promotion have always yielded uncountable benefits. But they should be consistent and sufficient.

I believe that international buyers are a principal source of business for many realtors here. Tourism is always the first contact of a potential buyer with our beautiful state, and is often followed by an investment in real estate. Do we need to pamper them? You bet.

Do we need to actively promote tourism to Florida? No discussion.

Here is the text of the article published today in the Tampa Tribune


Despite Economy, State Tourism Rises 3.4%

By CATHERINE DOLINSKI - The Tampa Tribune - Published: May 16, 2008

TALLAHASSEE - Rising gas prices and a slumping economy did not dissuade visitors from traveling to Florida during the first three months of 2008, when the state's tourism numbers rose 3.4 percent.

The same growth remains to be seen, however, in spending by tourists, which came in below state projections for two of the same three months.

Gov. Charlie Crist held a news conference on Thursday to announce that 23.8 million people visited the state in January, February and March. That number includes rising tourism among international visitors - a 2 percent overall increase in overseas travelers, and 6.6 percent increase in Canadian visitors. Additionally, Florida residents made 1.2 million more in-state trips over those taken during the same period last year. The rise in in-state travel, attributed largely to high gas prices keeping people closer to home, represents a 10.5 percent increase.

Crist lauded the state's online and television marketing efforts for boosting the tourism numbers and, presumably, spending by tourists.

"To have that many more people visiting the Sunshine State - they're spending money, they're going out to dinner, they're visiting our tourist attractions, and that has to have a positive impact," he said.

So far, however, state sales tax collections have not kept pace with the rise in tourism.

According to the state Office of Economic and Demographic Research, tourism-related sales tax collections were down 2.9 percent, or $10.9 million, below state projections for January, and down 2.4 percent, or $8.3 million, below projections for February.

The news was better in March, when tourism-related sales tax yielded 1.5 percent or $5.4 million more than expected, though overall sales tax collections were down $47 million from monthly projections. Results are not yet available for April.

Those collections would be down further had the state not invested in attracting more tourists, said Winter Park Rep. Dean Cannon, who oversees the House council on transportation and economic development. To that end, he defended the Legislature's decision this spring to spend about $2 million more of the state's general revenue on Visit Florida, the state's tourism marketing arm, despite a shortage of funds overall.

"Tourism dollars are sort of like the carbohydrates of the Florida economy," Cannon said, while the state's investments in high-tech business are the "proteins."

"I think that it was important to do whatever we can to secure short-term economic boost that can be derived from tourism and visitors to Florida, while we let some of the more slower-growing but higher-dollar projects that we've been planting to mature a little bit," he said.



Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com
where you can search for Aventura Condos, Florida Condos,

Banks selling commercial mortgage backed securities

Read in the news today - May 9, 2008

Investors are starting to buy up billions of dollars in mortgages that have been stuck on the books of banks, but that hasn’t yet freed up money for new mortgages.

In the past four weeks, banks have gone to market with four issues of commercial mortgage backed securities with a total balance of $4.9 billion, according to data provider Commercial Real Estate Direct.

That’s a big improvement from weeks earlier this year when there were no deals, but down from the same period last year, when the issuance totaled $78.7 billion.
Banks are offering the securities at discounts ranging from 5 percent to 20 percent, but those discounts are modest compared to what vulture investors got in the wake of the last major real-estate collapse in the early 1990s.

That’s because default rates on commercial real estate remain low by historical standards. And there’s a lot of cash available. Banks don’t have to take the low-ball offers.

Source: The Wall Street Journal, Lingling Wei and Jennifer S. Forsyth (05/09/2008)



Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com/
where you can search for Aventura Condos, Florida Condos,

State of Florida appropriates $10 million from Condo Trust Fund

May 8th, 2008

I read the following article in today's newspapers. What I understand is that the state of Florida is actually taking $ 10 million from a trust fund, which was constituted by money that each condo owner pays through his association, as well as contributions and fines paid by developers.

In my opinion, it doesn't matter if the $10 million taken from the fund are going to affect or not the fund's mission or have a "negative impact". It doesn't matter if the fund has too much money in reserve.

What matters is that money that basically belongs to condo owners and should be used for their protection, is diverted to another use that has nothing to do with the fund's purpose. Is that right?

By all means, condo owners will still have to disburse this money every year, even though there is no need for it because the fund has a surplus.

I am not an expert in state budgets and appropriations. But this matter sounds weird to me.

Text of the article:

BY JOE KOLLIN - South Florida Sun-Sentinel - May 8, 2008

Almost one-third of the money designated for programs to help educate condo owners and pay for enforcement of condo laws will be diverted for unrelated state expenses as a result of the current budget crunch.

The $66.2 billion state budget approved last week by the Legislature includes $10 million from the condo trust fund, according to Thomas Philpot, a spokesman for Gov. Charlie Crist.

The state created the trust fund so condo owners, not other taxpayers, would pay for condo services. Money comes from the $4 annual fee each unit owner pays the state via his and her association, or about $5.6 million a year based on 1.4 million units. Money also comes from fees charged developers when they build condos and fines paid by associations that violate condo laws.

The trust fund currently contains about $29 million, about $7 million of which is used for investigators and accountants to review complaints by owners, educational programs for owners and the condo ombudsman. The rest is held in reserve.

"The $10 million trust fund sweep will not have a negative impact" on state services to condos, according to Michael Cochran, director of the Division of Florida Land Sales, Condominiums & Mobile Homes, the agency that regulates condos.

In January, Crist had proposed taking $20 million from the fund to help pay for other state programs. Jan Bergemann, president of Deland-based Cyber Citizens for Justice, a volunteer organization that helps unit owners, called it wrong to have so much condo money in reserve. "There shouldn't be a surplus. The money should have been used for the purpose intended — protection of condo owners," he said.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com
where you can search for Aventura Condos, Florida Condos,

Protecting distressed homeowners

Interesting article I read today in the Miami Herald.

State lawmakers passed a bill to protect delinquent borrowers from losing their homes and and money to fraudulent foreclosure rescue services.

The Miami Herald – By Monica Hatcher - May 2, 2008

Almost as soon as she found out her lender had filed foreclosure, Deneen Whitley began getting phone calls, letters and pamphlets from foreclosure rescue services offering to save her Cutler Bay home from the clutches of the bank.

Whitley has resisted the offers so far, mainly because she's heard of people losing their homes after using such services. The temptation lingers, though, as the foreclosure clock keeps ticking with no resolution in sight.

''I have thought about it,'' Whitley said.

In an effort to protect the growing number of homeowners in the same situation, the state Senate approved a foreclosure fraud bill Thursday, reining in the growing field of consultants and equity purchasers offering home-saver services to delinquent borrowers. Some have been accused of duping homeowners into signing over their property and then selling for profit or charging them stiff fees to get it back -- a scheme sometimes called equity stripping.

Sen. Mike Fasano, R-New Port Richey, one of the bill's sponsors, said the legislation would help bring transparency to the foreclosure rescue business. The bill passed the House earlier this session. Gov. Charlie Crist is expected to sign it.

The bill requires foreclosure rescue companies to provide disclosures in contracts, including the fact that a homeowner may be selling his or her property.

Homeowners also would get a day to consider a contract before signing it, as well as three days to back out of the agreement. The new requirements stem from homeowners' complaints of being rushed into signing contracts they didn't understand.

''When you have people who are desperate to save something of such value to them, you have scammers and con artists trying to take advantage of the situation,'' said Sandi Copes, a spokeswoman with Florida's attorney general's office.

The attorney general has received 1,800 complaints about mortgage and foreclosure fraud in recent years, and is investigating four companies, Copes said.

In a typical rescue scheme, an investor offers to pay up the delinquent amount on someone's loan. In return, the homeowner agrees to sign over a deed in a lease buy-back arrangement.

In some cases, foreclosure rescuers have been known to take out large second mortgages or home equity loans on the property, making it impossible for the homeowner to repurchase.

Before entering into a lease buy-back agreement, investors would have to demonstrate that the homeowner has a reasonable ability to repurchase the property.

In addition, foreclosure consultants, who often take money in exchange for help dealing with lenders, would be banned from accepting payment before promised services are performed.

Copes said the bill also enhances civil remedies for homeowners under the state's Unfair and Deceptive Trade Practices Act.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com
where you can search for Aventura Condos, Florida Condos, Sunny Isles Condos.

New Rules for Homeowners and Condo Associations in Florida

May 2nd, 2008,

Florida Legislature just approved legislation to rule condo and homeowners association boards.
Governor Crist is likely to sign on the new law.
This is the result of years of discussions, back and forth attempts to rein in the famous condo commandos and put a limit to the nasty disputes between residents and their own elected boards.
Some of the new rules are:
- Directors accused of misuse of association money must be suspended from their boards.
- Only licensed management companies can be retained by condo associations.
- Co-owners of a same unit cannot both serve on the board.
- Directors of homeowners associations must read their association rules within 30 days of sitting on the board.
- Some other specific subjects were addressed, as the flags sizes and specifications allowed for residents in communities, or the Jewish mezuzahs that are now allowed by law to be affixed to the door frame.

The new legislature does not pretend to cover all possible issues. But at least it is a good intent to limit the power of overzealous boards, improve practices and protect homeowners against directors' dishonesty and embezzlement.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com
where you can search for Aventura Condos, Florida Condos, Sunny Isles Condos.

Not a really great job on Florida tax reform.

The Taxation and Budget Reform Commission (TBRC) was established by constitutional amendment in 1988 and met for the first time in 1990. Changes adopted by voters in 1998 called for the TBRC to begin deliberations in 2007 and established future meetings to occur every 20 years thereafter.

The Commission examines the state budgetary process, revenue needs and expenditure processes of the state. Its members analyze Florida tax structure as well as governmental productivity and efficiency. They review policy as it relates to the ability of state and local governments to tax and adequately fund governmental operations.

On appointing 11 members of the commission in February 2007, Governor Charles Christ said: This commission is an important element of my goal to increase transparency and accountability in government, ' I am eager to review the findings which will undoubtedly provide a deeper understanding of our budget constraints and unveil opportunities to lower taxes for the people of our state.'

The commission consists of 29 members, 11 appointed by the Governor, seven appointed by the President of the Senate, seven appointed by the Speaker of the House and four non-voting ex officio members, all of whom are members of the Legislature. Members will begin meeting in early 2007 and must submit any proposed constitutional amendments by May 4, 2008.

Well, we finally know the result of their hard work. Thanks to them, voters will have to deal with seven ballot questions in November elections. Will this bring a solution to the tax and budget mayhem that is presently ruling our state's economy?

I doubt it.

Dominated by a majority unwilling to carry forward any significant reform, the commission drafted some new tax breaks to favor owners of marinas and conservation lands, as well as some tax incentives for energy efficiency and windstorm protection expenses.

But their most important decision was to propose a reduction of property taxes by about 25%. It would apply not only to homeowners but also to businesses, second homes and commercial buildings. It would also establish a 5 percent cap on yearly assessment increase for non-homestead properties – businesses, investment, and second homes. In January 2008, voters have already approved a 10% percent cap.

This reduction is accomplished by basically eliminating the schools part of property tax revenue. This is the good part. The bad part is that the lost revenue will have to be replaced by new taxes and/or increases of existing taxes to be decided by our state legislators. Most possibly, an additional 1% on sales tax, and new sales taxes on now exempt services. We are talking about a 9.5 billion dollars gap. The legislature must find a way to replace the schools revenue and cover the gap.

Our school system, perhaps the poorest and least efficient in the whole US is once again the weak link in the chain. It will be the legislators' task to compensate the schools' lost revenue with an increase in the sales tax, new sales taxes on services, or cutting on the government budget additionally to the cuts already made this year.

Of course, these 'budget cuts' invariably lead to reduction in social and educational programs.

Frankly, that is not that we expected from a commission that is supposed to bring together some of the best brains in Florida. Instead of spending their time on more creative solutions to rein in the local government excessive spending and implement a sensible and intelligent property tax reform, the commission spent much of their time deciding on matters that have nothing to do with tax reform.

They revived the school vouchers for students at failing public schools and approved a proposal to allow state and local governments to contribute public funds to churches and religious organizations. Does this have anything to do with budget reform and taxation?

By the way, both proposals have already been overturned in the past by the Florida Supreme Court, after being approved by the legislature.

Florida voters will have to untangle all these failing proposals on the November ballot. They will not bring relief to our suffering middle and lower classes.

The property tax reduction might encourage investment and second home purchases. However, it will be at the expense of Florida residents, and it has all the looks and sounds of another hot air balloon to convince us all Florida residents that our government has solved the crisis, lowered taxes, solved all our problems, while it looks more and more like the famous home insurance reduction promised by our governments, which ended up actually increasing many homeowners bills.

Changing money from one pocket to another have never solved financial problems. In this case, swapping property taxes to sales taxes will only load an additional burden on people who don't even own a home. The elusive American dream will just be a bit harder to achieve in Florida.

I had hoped at some point that, after the failure of our legislators to implement a solid and sensible reform, the Taxation and Budget Reform Commission was our last hope to get a reasonable proposal presented to voters in November 2008. It ended up in politics as usual.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com
where you can search for Aventura Condos, Florida Condos, Sunny Isles Condos.