Fla. Senate president: No new taxes or fees

TALLAHASSEE, Fla. – Jan. 21, 2010 – Florida Senate President Jeff Atwater told his chamber’s budget writers Wednesday not to raise taxes or fees during this election year to close a projected spending gap of up to $3.2 billion.

The potential deficit is the difference between anticipated revenue and the growing cost of meeting high-priority demands such as public schools and Medicaid, the state-federal program that provides health care to low-income citizens.

Lawmakers last year relied on $2.2 billion in fee and tax increases as well as spending cuts and federal stimulus dollars to balance a $66.5 billion budget, but Atwater told the Senate Ways and Means Committee that Floridians “do not have one more dime to send us.”

“We will not extract one more dollar from the small business owner of this state or from any Floridian’s wallet,” said the North Palm Beach Republican, also a candidate for chief financial officer.

Ways and Means Chairman JD Alexander, R-Lake Wales, said the Legislature would have to cut or reorder spending by 3 or 4 percent to close the budget gap.

Read the whole story at: http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=230556

Support emerges for Florida housing trust funds

TALLAHASSEE, Fla. – Jan. 21, 2010 – Florida legislators have given the state’s affordable housing trust funds short shrift in recent years, but a key Senate lawmaker says he’ll support an effort to target money for affordable housing during the upcoming session if it reduces the glut of existing housing stock and puts builders back to work.

Senate Appropriations Committee chairman. J.D. Alexander, R-Lake Wales, told the News Service of Florida he would support efforts to lift the cap on the Sadowski Trust Fund, which has seen its resources diverted in recent years to fill other budget gaps. By using affordable trust fund money for downpayment assistance and upgrades to existing housing – instead of building new buildings – it could get people into homes that are sitting unsold.

During the state’s housing boom, the Sadowski Fund ballooned to more than $600 million as home sales surged. With so much coming into the fund, lawmakers in 2006 imposed a cap on how much of the money in the account could be spent. By limiting spending from the fund to $243 million, it provided lawmakers with a source of money for other areas of the budget. The money that goes into the fund comes from real estate transfer taxes.

Last year, House lawmakers included in a committee bill a provision to abolish the $243 million cap. Senate budget leaders, however, including Alexander, balked because the money was needed elsewhere as the Legislature scrambled to balance the budget.

Last fiscal year, lawmakers took nearly $440 million from trust funds and spent it elsewhere. The remaining $30 million that went into the account was earmarked for the federal first-time homebuyer program. Trust fund coffers likely won’t approach the cap this year even if further raids are avoided.

This time around, Alexander said he’d back the effort to remove the cap, which went into effect in 2007, because it will help the Florida construction industry. “The homebuilding industry needs to have that existing product moved so they can get their people back to work,” Alexander said.

About 400,000 existing housing units are on the market. Builders say the focus on existing housing units – at this time – makes sense.

“Our members recognize that this over-supply must be brought down in order to return to a healthy market,” said David Hart, vice president of legislative affairs for the Florida Home Builders Association. “So, yes, we support using Sadowski funds for downpayment assistance this year rather than on new construction. The sooner the inventory is reduced, the sooner members of the construction industry can get back to work.”

About $174 million in trust fund revenue from doc stamp taxes would be available in the coming year if money were not diverted to other purposes. Jaimie Ross, director of affordable housing for 1,000 Friends of Florida, estimates that using it would create 13,000 jobs and result in a $1.3 billion boost as money circulated throughout the economy.

Advocates hope Gov. Charlie Crist includes full affordable housing funding when he releases his budget request in the next couple weeks. Though no guarantee, Ross said Crist’s support is critical as lawmakers enter what is again expected to be a tight budget year and they try to fill a $3 billion gap in critical services.

“If we don’t have an appropriation of money, we are not going to be able to move housing stock,” Ross said. “As for what the governor will propose or what the Legislature will appropriate, I just don’t know at this point.”

House Democrats worry that housing money may be diverted to other state priorities, as the Legislature strives to fill a budget hole nearing $3 billion.

“My fear is that they’re going to raid trust funds and nickel and dime (the budget) with fees,” said Rep. Ron Saunders, D-Key West, the incoming House Democratic Leader and the sponsor of legislation (HB 95) to lift the cap on spending of the affordable housing money.

Source: News Service of Florida, Michael Peltier

Cutting Mortgage Principal Decreases Defaults

Borrowers whose loan modifications reduced their loan balances – not just their interest rates – are most likely to avoid re-defaulting on their mortgages, according to a new study by the Federal Reserve Bank of New York.

These findings contradict the government's recommendation, which focuses on reducing monthly payments by lowering interest rates and extending the loan terms.

The New York Fed concludes that a borrower's probability of defaulting within one year when interest rates are lowered is reduced by 11 percent. But when the loan balance is reduced by 25 percent and the interest stays the same or is reduced slightly, the borrower's probability of default within one year is reduced by 26.5 percent.

The New York Fed also found that borrowers who owe 15 percent or more than their homes' values have a 51 percent greater risk of defaulting in any given month.

Source: The Wall Street Journal, Nick Timiraos (01/04/2010)

Will Home Prices Go Down in 2010?

Some real estate researchers are forecasting that home prices will fall again in 2010.

· Fiserv Lending Solutions, a financial analytics firm, predicts that prices will decline an average of 11.3 percent in 342 of the 381 markets it covers.

· Moody's Economy.com foresees another 8 percent drop, with Arizona, California, Florida, and Nevada feeling even more pain.

· Shari Olefson, author of Foreclosure Nation: Mortgaging the American Dream, predicts a national average decline in prices of about 10 percent in 2010.

· Peter Schiff, president of Euro Pacific Capital and the most bearish of the bears, says real estate prices could possibly fall another 30 percent before they hit bottom.

NATIONAL ASSOCIATION OF REALTORS® Chief Economist Lawrence Yun sees it all differently. He predicts home prices will rise more than 3 percent in 2010.

"The headwind we face is rising mortgage interest rates," Yun says, "but the compensating factors will be the home buyers tax credit in the first half of the year and increased job creation in the second half."

Source: CNNMoney.com, Les Christie (01/01/2010)

Realtor.org

Fannie Mae to ease condo mortgage restrictions

WASHINGTON – Jan. 8, 2010 – Fannie Mae announced yesterday that it would comprehensively review hundreds of condominium projects in Florida. Through a new “Special Approval” designation, Fannie hopes to streamline mortgage approvals for projects that don’t currently fit Fannie Mae guidelines even though they present limited risk to the company.

Florida Realtors strongly urged Fannie Mae to revisit its lending program in the condo market, and it consulted a number of Florida Realtors as it developed the program, including Florida Realtors® Vice President Summer Greene, regional manager with Prudential Florida 1st Realty in Fort Lauderdale.

“This is good news for Florida and a step in the right direction for the state’s condominium market,” Greene says. “Hopefully, with the special approval designation process, we can begin to get our condo inventories reduced and absorbed as more condo buyers receive a green light from lenders for loans. This will help boost confidence in the market.”

Fannie Mae and its cousin, Freddie Mac, back more than half of all U.S. mortgages. As the Fannie Mae initiative develops and gains momentum, Greene hopes it provides incentive for Freddie Mac to follow suit.

While Fannie Mae currently has boilerplate guidelines for approving condo loans, it will sometimes grant a mortgage to a non-conforming condo if requested by a lender. The Special Approval designation takes that a step further by approving exceptions before a lender request has been submitted.

A dedicated team of six Fannie Mae professionals based in Florida will now examine statewide condominium projects that may not currently meet Fannie Mae’s standard eligibility criteria and assessing specific criteria more closely. The team will look at a condo project’s occupancy level, association dues, financial stability and property condition. If a project is deemed sufficiently stable following a closer examination, it will be granted the Special Approval designation, freeing lenders to originate and deliver mortgage loans secured by Fannie Mae. Projects deemed eligible will be listed on www.eFannieMae.com, and qualified borrowers will be eligible for financing.
Read all of the article at http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=229442

Law firm gorges on home defaults

TAMPA, Fla. – Jan. 7, 2010 – If there’s one industry that’s not feeling the economy’s sting these days, it’s the business of filing foreclosure lawsuits.

Recently, mortgage-servicing companies have been filing about 2,000 initial foreclosure documents every month in Hillsborough County Circuit Court. To handle the overwhelming caseload, armies of lawyers, paralegals and clerks at big foreclosure law firms have streamlined the art of separating homeowners from their homes.

Few are as large or as efficient as Tampa-based Florida Default Law Group, which processes at least 300 new foreclosure suits a month in Hillsborough County, court documents show.

By forging relationships with mortgage companies and focusing on volume, Florida Default Law Group offers to foreclose on a home at the bare-bones price of $1,200, about half the typical cost.

In the streamlining, distressed homeowners such as 75-year-old Janice Winemiller of Sarasota sometimes get hurt. Florida Default Law Group charged her more than $4,000 for delivery of legal documents, according to her nonprofit legal aid lawyer. The firm couldn’t substantiate the fees.

Dubbed foreclosure mills by some in the industry, these companies have turned the job into a factory-like process. Speed is the key to their success.

“The only way their business model works is if they don’t lay eyes on the lawsuit,” said Jim Kowalski, a Jacksonville lawyer who has litigated against Florida Default Law Group.

Four firms, 1,049 filings

Few areas of the legal field are so dominated by a handful of players as foreclosure law. Florida Default Law Group is one of four foreclosure mills operating in Florida that appear to be winning the lion’s share of business from lenders or their representatives. Along with Florida Default, other big firms include the law offices of David J. Stern in Plantation, the law offices of Marshall C. Watson in Fort Lauderdale and Shapiro & Fishman in Boca Raton.

The Tribune looked at 1,994 initial foreclosure documents filed in October to see which firms were handling the most foreclosures...

Read more under http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=229402

New Smyrna Beach: Site plan for big-box retailer approved

By Dale Smith - dsmith@hometownnewsol.com

NEW SMYRNA BEACH - If they build it, you will come.

At least that's what developer Regency Centers of Jacksonville hopes will happen now that the Planning and Zoning Board approved a site plan for a big-box store.

The 155,000-square foot retail structure is phase one of a larger project that will sit on approximately 47 acres at the intersection of I-95 and State Road 44 west of the city.

Smaller anchor stores and retail shops are planned in other phases.

Planning and Zoning board members voted 5-1 in favor of the site plan. Marie Bushey was the lone dissenter.

Widespread speculation is that a Super Wal-Mart will be the new tenant, but Regency officials will not confirm that.

City planner Gail Hendrickson said staff had a concern about what stores would be going into the new development and how that would impact similar stores that already exists in New Smyrna Beach.

http://www.myhometownnews.net/index.php?id=65478