One of thousands of homes for sale in California

The national housing slump showed no signs of easing in December. The monthly U.S. Commerce Department report shows new home sales fell nearly five percent in December to their lowest level in almost 13 years. And with foreclosures now at a 20-year high in some states, realtors in some of the hardest hit states are trying out a creative new idea to entice buyers. VOA’s Mil Arcega reports.

Mounting economic uncertainty has led to a sharp decline in property sales across the country.

But with the Federal Reserve’s rate cuts driving down mortgage rates — and with median home prices nearly 15 percent lower than they were last year, U.S. homes are more affordable now than they have been for years.

In California, realtors are doing what they can to keep the housing market alive. Dick Keenan at Keller Williams Realty is riding the latest trend in real estate marketing.

Prospective buyers aboard the foreclosure tour bus

Welcome to the foreclosure bus tour. For $20, potential buyers will tour and bid on as many as 10 homes in just under four hours — all of them at fire sale [very low] prices.

It is an opportunity Mike and Mary Hays did not want to miss. “We’re recently married and are looking for our first — well, our dream home,” Mike said.

With nationwide default rates skyrocketing, bus tours like this one are becoming popular across the country. Realtors say in some cases, homes initially valued at $650,000 have sold for under $450,000.

Potential buyers Sandy and Jim Fisher say there is only one problem. “No one knows what they’re going to be asking in two to three months. That’s where the problem comes in,” said Jim.

The market’s uncertainty has created hardship for Mike and Dawn Lembeck. Their four-bedroom, three-bath home has been on the market for nearly a year.

Home seller Dawn Lembeck says she is optimitic about selling her home. “Well, we expected to have this house sold before we moved. We refinanced this home to move into our new home.”

The Lembecks are prepared to hold on for a year. But housing analyst Karen Weaver predicts tough times ahead for people trying to sell their homes in expensive markets like California. “It’s going to be three years before we even have flat home prices, or stability in home prices. We just have this tsunami of defaults facing us and that’s driving down prices — it’s inescapable.”

Analysts warn that home prices in some areas could fall another 30 percent before the country sees a turnaround in the U.S. housing market.

Found here.

Insurers, in trying to scrimp on litigation claims costs, may inadvertently be allowing the insurance defence bar to wither away on the vine, a senior member of the bar told members of the insurance industry attending the 41st annual CICMA/CIAA joint Conference held in Toronto.

Guest speaker Brian Elkin of Lavery deBilly LLP said he hoped his message would be taken as coming from “a member of the family.” Family members tend to be harsher with each other than those around them, he noted.

Harsh or not, Elkin said the insurance defence bar stands to lose its best and brightest lawyers, because insurers are increasingly preoccupied with their litigation costs and are trying to find ways to pay less money to lawyers responsible for defending their claims.

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TALLAHASSEE, FL – Attorney General Bill McCollum issued a consumer advisory warning Florida’s senior citizens about a mortgage-related scam that may target them directly. As he unveiled legislation to combat mortgage “foreclosure rescue” scams, the Attorney General also cautioned senior citizens about scams associated with reverse mortgages, a type of home equity loan frequently abused by con artists and scammers. These loans are often popular options for senior citizens because they offer a cash source which can help meet unexpected medical expenses, supplement social security and more.

“When our senior citizens are concerned about finances and are seeking a legitimate option for financial relief, they should not have to worry about predatory lenders or brokers trying to capitalize on their precarious position,” said Attorney General McCollum. “Consumers should take every precaution to avoid scams and situations which could leave them in even worse financial shape.”

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Cash-challenged seniors who want to stay in their own homes have kept reverse mortgages high on the public radar. But not everyone thinks they’re such a good idea.

In general, a reverse mortgage converts home equity into cash in several different ways, ranging from monthly payments to an equity line to one-time payouts — or a combination. The amount you can borrow varies according to your age, the value of the home, current interest rates and loan fees.

Reports suggest reverse mortgages can be a source of ready cash when it’s needed, similar to other investments. But taking out a reverse mortgage isn’t a no-brainer. Candidates for these mortgages should consider both the benefits and the drawbacks before jumping in.

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In a move that could breathe life into San Diego County’s troubled housing market, Congress is pushing to ease lending requirements on federally backed mortgages, making it easier for borrowers to obtain low-interest loans for pricey homes.

As part of a broad economic stimulus program unveiled yesterday, Congress is proposing to let home buyers obtain low-interest “conforming” mortgages for homes worth as much as $729,750, instead of the current $417,000 cap.

For buyers, the change could mean as much as a $500 cut in monthly mortgage payments. For sellers, it could ease pressure to lower prices to attract buyers.

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OKLAHOMA CITY – The case of an 18-year-old brain cancer patient from Noble has inspired introduction of “Stephanie’s Law,” which would require insurance companies to pay routine health care costs of patients taking part in a clinical trial.

“There’s really no help for me unless I can try a clinical trial,” said Steffanie Collins, who underwent a stem call transplant as part of a clinical trial 4 1/2 years ago. She attended a Capitol news conference in a wheel chair to show support for the bill.

Monty Collings, the girl’s father, said routine health care costs for Steffanie have exceeded $500,000 since the surgery, and the insurance carrier has denied more than $400,000 in claims.

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Many paying cash as dollar falls in value 

Two years ago, while attending a home-builder convention in Orlando, Fla., a top-producing local real estate agent was bubbling over the interior design features of a vacation home.

“All of my international buyers are just going to love this,” the agent said. “I can’t wait to tell them what’s now available.”

I was intrigued. How many international buyers did she have?

It turned out that more than 60 percent of the agent’s clients were buyers from overseas. And, she is not the only real estate professional cultivating the foreign market. According to the National Association of Realtors, 65 percent of Florida Realtors had at least one international customer, and the trade group’s “Profile of International Home Buying Activity” indicated that at least 7 percent of home sales in Florida were to foreign purchasers.

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Millions of homeowners are, or soon will be, facing significantly higher mortgage payments as more than $140 billion in adjustable rate mortgages were adjusted in 2007. Another $380 billion are scheduled to reset higher this year.

In times past, many of these consumers simply would have refinanced their mortgage. But many are now finding that current lending restrictions and declining home values have made refinancing difficult. Enter one stalwart that is making a welcome comeback: The Federal Housing Administration loan.

Dating back to the 1930s, the FHA loan has traditionally been used by first-time home buyers because the program requires a down payment of as little as 3 percent, which can be gifted from a relative, and features relaxed credit guidelines.

Today, many homeowners also are turning to the FHA loan to refinance a home.

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Deregulation in 2003 was the key

TRENTON – New Jersey has fixed its auto insurance problem.

Five years after the state deregulated the industry, the results are in, and by almost every measure the reform has been a resounding success.

Premiums are down. Competition is up. The number of insured is up. Complaints to the state are down by more than half.

“I’m happy,” said John Porreca, 22, a Cherry Hill resident who switched companies and saw his insurance bill drop $1,000.

For decades, auto insurance was the Mideast of New Jersey politics – an intractable mess. Fraud was too pervasive, the experts agreed. There were too many motorists banging into each other on too-crowded roads. The doctors or the lawyers or the insurers, take your pick, were too powerful.

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Reverse mortgages used to be a way for homeowners to get extra cash during retirement. Now they’re also being used for a more-pressing purpose: helping people who are struggling to meet payments on high-interest-rate loans to keep their homes.

The strategy, which is relatively novel but gaining popularity among legal-aid attorneys and housing advocates around the country, calls for persuading lenders to take the cash generated by a reverse mortgage in lieu of foreclosing on older homeowners.

With a reverse mortgage, the bank makes payments to the homeowner instead of the homeowner making payments to a bank. The loan is repaid, with interest, when the borrower sells the house, moves out permanently or dies. The products are complex and have high fees — typically about 7 percent of the home’s value — and they make it difficult for homeowners to leave the property to their heirs. But they may be the best option for people who have built up equity in their home and would otherwise lose it.

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