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Tuesday, July 31, 2012

Got flood insurance?

Although strangely mis-titled, this article has some good info about flood insurance.   Banks are required by regulators to carefully check the flood determination zone of every property it loans on.


For the last few years, the folks at the Federal Emergency Management Agency have been issuing more accurate flood plain maps at the same time as the government has made a renewed push for mortgage lenders to help make sure homeowners who need flood insurance are actually purchasing it. But even though these new maps should be making it more clear to everyone whether or not one's home is in a flood plain, the banks appear to be playing fast and loose with the rules in order to force customers into more expensive insurance policies.

See, while part of your property might be in a Special Flood Hazard Area, that doesn't necessarily mean you need to purchase flood insurance. The insurance is only required if your actual house falls within that zone.

So if your house is far from that lake, creek or river or is high up above the area that could flood, you should not have to purchase the insurance. Problem is, as these new maps get around, banks are taking only cursory glances at them and not always checking to see where a house might be before deciding that flood insurance is needed.

Usually, banks give homeowners 45 days to provide proof of insurance. After that, the bank will just put you into a policy of its choosing -- one that is often significantly higher in price than what you'd pay if you bought it yourself.
Homeowners can appeal to FEMA, though that process will likely require 60 days. By that time, they will have either needed to find their own insurance or be placed into one by their lender.

Read more here.

Friday, July 27, 2012

ABA Daily Newsbytes

Mortgage Rates Again Set Record Lows

Meanwhile, the average rate on 15-year, fixed-rate mortgages fell to a record low of 2.80 percent this week from 2.83 percent last week. A year ago, rates for 15-year mortgages averaged 3.66 percent--

Mortgage rates again hit record lows, with the average interest rate on 30-year, fixed-rate mortgages dropping to 3.49 percent this week from 3.53 percent last week, Freddie Mac reported yesterday. A year ago, rates for 30-year mortgages averaged 4.55 percent.

Monday, July 23, 2012

WSJ: "As Homes Go, So Do Pickups"

by Bill McBride on 7/22/2012 08:34:00 PM
As residential investment increases, there will be positive spillover effects ... usually it is "As housing goes, so goes the economy!"

From Mike Ramsey at the WSJ: As Homes Go, So Do Pickups (ht Joe)
[I]n the past few months, more lots have been cleared for construction and [Hardwood's] phone has been ringing more frequently. So in June he went out and bought a new Chevrolet 2500 diesel truck with a backup camera and a hands-free Bluetooth phone link.

"There is a lot more steady and consistent work," said the 30-year-old Mr. Harwood, whose company Broadleaf Landscape, in Damascus, Md., does a lot of work at new homes. "I was more comfortable with buying a new truck at this point in time because of the market change."
In the first half of this year, sales of full-size pickups made by the Detroit Three increased 13%, to 707,175 vehicles.


Friday, July 20, 2012

Banks Win New Ally in Fight Over Mortgage Rules

From "Banks Win New Ally in Fight Over Mortgage Rules"
American Banker (07/20/12) Wack, Kevin
Habitat for Humanity believes the qualified mortgage rule could keep it from building and financing homes for needy people if the Consumer Financial Protection Bureau issues a final rule that is overly strict on borrower credit scores, employment history, and down payments. Its concerns were raised at a House subcommittee hearing with CFPB Deputy Director Raj Date on July 19. Habitat wants the rule to include an exception for non-profit lenders or a broad definition of QM that will not affect the organization.