August 29, 2011 8:57 pm
As homeowners across the East Coast continue dealing with the aftermath of Hurricane Irene, the threat of similar disasters underscores the importance of flood insurance, which is the only way for homeowners to financially protect their property or businesses from flood damages.
Hurricane damage from water is only covered by flood insurance, which must be purchased separately through the National Flood Insurance Program (NFIP), and if Congress doesn’t act soon, this critical program will expire on September 30, 2011, putting millions of homeowners at risk.
“As the leading advocate for homeownership and housing issues, NAR believes that the NFIP is essential to a properly functioning real estate market, ensuring access to affordable flood insurance for millions of homeowners,” says NAR President Ron Phipps. “REALTORS® support any and every effort to extend the program for as long as legislatively possible, so that American families won’t have to go without essential flood protection.”
Floods are also not just a coastal issue and are not only caused by hurricanes. Floods claimed more lives and property than any other natural disaster in the U.S. over the past century and have been declared in every state, along rivers and anywhere rain falls or snow melts.
The NFIP is set to expire on September 30 for the tenth time in three years, and NAR urges Congress to reauthorize the program for five years, before it expires. The NFIP ensures access to affordable flood insurance for more than 5.6 million home and business owners in 21,000 communities across the nation.
“We strongly urge Congress to speed passage of legislation to reauthorize the NFIP for the long term and end the current stopgap approach that has already led to numerous extensions and lapses of program authority in the past two years,” says Phipps.
NAR also calls on Congress to develop a proactive national policy to reduce natural disaster risk beyond floods, so that homeowners have access to affordable, comprehensive property insurance for a full range of natural disasters, and taxpayers no longer have to fund rebuilding efforts through federal disaster assistance.
“Whether it’s a tornado, flood, hurricane or earthquakes like those that hit Colorado and the Eastern U.S. this week, virtually every region of the country is susceptible to nature’s unexpected fury,” says Phipps. “Our thoughts are with all Americans who were affected by this hurricane, and we will continue to work with public policymakers on these important issues.”
August 26, 2011 8:57 pm
The U.S. Department of Agriculture's Food Safety and Inspection Service (FSIS) has issued recommendations for residents in states that might be affected by Hurricane Irene to minimize the potential for foodborne illnesses in the event of power outages, flooding, and other problems that could be associated with the storm. But regardless of storms, if the power goes out under any circumstance, it's always important to know how to keep your food safe to ensure your family's health is never in jeopardy.
Steps to follow to prepare for a possible emergency:
• Keep an appliance thermometer in the refrigerator and freezer. An appliance thermometer will indicate the temperature inside the refrigerator and freezer in case of a power outage and help determine the safety of the food.
• Make sure the freezer is at 0°F or below and the refrigerator is at 40°F or below.
• Freeze containers of water for ice to help keep food cold in the freezer, refrigerator or coolers after the power is out.
• Freeze refrigerated items such as leftovers, milk and fresh meat and poultry that you may not need immediately — this helps keep them at a safe temperature longer.
• Plan ahead and know where dry ice and block ice can be purchased.
• Have coolers on hand to keep refrigerator food cold if the power will be out for more than four hours. Purchase or make ice and store in the freezer for use in the refrigerator or in a cooler. Freeze gel packs ahead of time for use in coolers.
• Group food together in the freezer — this helps the food stay cold longer.
• Store food on shelves that will be safely out of the way of contaminated water in case of flooding.
Steps to follow after the emergency:
• Keep the refrigerator and freezer doors closed as much as possible to maintain the cold temperature.
• The refrigerator will keep food safely cold for about four hours if it is unopened. A full freezer will hold the temperature for approximately 48 hours (24 hours if it is half full) and the door remains closed.
• Discard refrigerated perishable food such as meat, poultry, fish, soft cheeses, milk, eggs, leftovers and deli items after 4 hours without power.
• Food may be safely refrozen if it still contains ice crystals or is at 40°F or below when checked with a food thermometer.
• Never taste a food to determine its safety!
• Obtain dry or block ice to keep your refrigerator and freezer as cold as possible if the power is going to be out for a prolonged period of time. Fifty pounds of dry ice should hold an 18-cubic-foot full freezer for two days.
• If the power has been out for several days, check the temperature of the freezer with an appliance thermometer. If the appliance thermometer reads 40°F or below, the food is safe to refreeze.
• If a thermometer has not been kept in the freezer, check each package of food to determine its safety. If the food still contains ice crystals, the food is safe.
• Discard any food that is not in a waterproof container if there is any chance that it has come into contact with flood water. Discard wooden cutting boards, plastic utensils, baby bottle nipples and pacifiers.
• Thoroughly wash all metal pans, ceramic dishes and utensils that came in contact with flood water with hot soapy water and sanitize by boiling them in clean water or by immersing them for 15 minutes in a solution of 1 tablespoon of unscented, liquid chlorine bleach per gallon of drinking water.
• Use bottled water that has not been exposed to flood waters. If bottled water is not available, tap water can be boiled for safety.
With a little preparation, you can salvage the most food possible from your fridge and freezer and ensure that your family only consumes the freshest of products.
For more information, visit www.usda.gov.
August 26, 2011 8:57 pm
The U.S. Department of Housing and Urban Development (HUD) has recently released Mortgagee Letter 11-29, which will keep the lending limit at $625,500 for Home Equity Conversion Mortgages (HECMs or reverse mortgages) through Dec. 31, 2011.
This is welcoming news for older homeowners interested in reverse mortgages. Reverse mortgages are available to homeowners 62 and older wherein the lender makes monthly payments or a lump sum payment to the homeowner. Many seniors use reverse mortgages to supplement social security, meet unexpected medical expenses, make home improvements, and more. No monthly repayment is required until the borrower no longer uses the home as their principal residence.
“Homes tend to be a higher value when borrowers 62 and older are allowed to withdraw larger amounts of equity out of their homes without having to qualify in the traditional income and debt requirements,” explains reverse mortgage expert Sue Drawdy.
If HUD had not extended the $625,500 limit, it would have dropped down to the pre-American Recovery and Reinvestment Act (ARRA) conforming loan limit of $417,000. Drawdy says it is uncertain what will happen to the limit after December 31; unless congress acts, the loan limit will likely drop down to the 2008 limit.
“This extension of the loan limit makes now a great time to take out a reverse mortgage,” says Drawdy. “You can even purchase a new home with the reverse mortgage.”
August 26, 2011 8:57 pm
The Insurance Institute for Business & Home Safety (IBHS) has conducted a full-scale research test program of how wind-driven water, such as that occurring during hurricanes, penetrates openings in residential roof systems at the IBHS Research Center in South Carolina.
“Wind-driven rain that gets into a house through openings in the roof can collapse ceilings and cause extensive damage to interior finishes, furnishings and other family possessions,” says Julie Rochman, president & CEO, IBHS. “The testing conducted by our engineers at the IBHS Research Center clearly demonstrated that water penetration during hurricanes could be substantially reduced by sealing the roof deck seams.”
For new construction or re-roofing, roof deck seams can be sealed from the exterior using a modified bitumen tape. For retrofitting when the roof cover is not replaced, homeowners can seal the roof deck seams from the inside with a closed-cell foam spray adhesive.
IBHS researchers built a 1,300 sq. ft., single-story duplex test building with construction features common in many coastal and inland areas of the Atlantic and Gulf Coast states with hurricane exposure. The interior of the duplex was furnished with light fixtures, ceiling fans, furniture, carpeting and laminate flooring made to look like wood. Both sides of the duplex roof were identical, with the critical exception of using modified bitumen tape to seal the between-sheathing joints and gaps on one side of the roof.
The building was placed inside the 21,000 sq. ft. test chamber at the IBHS Research Center and subjected to several individual test sequences involving both high-speed, multi-directional, gusty winds and prolonged exposure to “rain” typical during a hurricane, delivered at a rate of up to eight inches per hour.
During the testing, 24 cameras were placed inside the test specimen to capture the water entering the duplex. Video footage of the interior of both sides of the building showed water entering the side with the unsealed roof deck, streaming off of light fixtures and ceiling fans. Approximately 30 minutes after the completion of the test, pieces of the ceiling on the unsealed side began to collapse.
“As the attic insulation became saturated, the water began to soak into the ceiling gypsum wallboard,” says Dr. Anne Cope, IBHS research director. “The combination of the weight of the saturated insulation and the weakened gypsum wallboard caused the ceiling to collapse in three places on the unsealed side of the home. However, on the sealed side of the duplex, the ceiling did not collapse and there was much less water entry.
Following the test, IBHS brought in a claims adjuster from a local insurance company who is trained in catastrophe claims adjusting to estimate the amount of damage each house suffered. He assessed the damage to the front three rooms on both sides of the duplex, including the kitchen, dining room and family room. During a hurricane or high wind event, winds generally come from a relatively small range of directions after the roof cover blows off, so damaged confined to one area of a house would be typical of most people’s experience.
According to the adjuster’s report, estimated damage on the unsealed side totaled nearly $17,000, while estimated damage on the sealed side totaled approximately $5,400. This is a substantial difference totaling almost three times as much for the side of the duplex with the unsealed roof deck. Of particular note is that the furniture in the side with the unsealed roof deck had to be replaced, while the furnishings in the side with the sealed roof deck only had to be cleaned.
“The moment water enters your home, you have a potentially catastrophic loss waiting to happen,” says Rochman. "Water travels along beams, through electrical conduits, along wiring, and into walls, ceilings and floors; in other words, it can get just about everywhere, so keeping it out in the first place is the homeowner's best bet for preventing damage.
"Sealing the roof deck can significantly strengthen this critical part of a home and reduce the chances of a catastrophic loss due to water damage when the roof covering is compromised or blown off entirely during a high-wind event. And taping the seams on an average-sized roof costs only about $500 – a great, relatively small investment that could pay huge dividends when a storm hits,” she added.
August 25, 2011 8:57 pm
By Paige Tepping
In today’s market, it takes more than painting and trimming the bushes to get noticed. While home sellers across the country are resorting to dropping the price in order to make their home more attractive, it leads to one crucial question: what can I do differently to make my home stand out?
Larry Nusbaum, Resolution Assistance Contractor for the FDIC, offers the following tips for home sellers looking to differentiate their homes from the numerous homes that are on the market today.
1. Get lighted signage that’s illuminated even after dark. This will give prospective buyers extra time to see your home as they don’t have to depend on sunlight.
2. If you or your agent are hosting an open house, be sure to serve light snacks and hand out something that attendees will remember. You want something that will be a positive reminder of your home—seasonal gifts are the perfect way to stay top of mind. Be sure to at least have pens and key chains with your agent's name and contact information on them.
3. Create an informational flyer with all the local conveniences you can find: shopping, schools, universities, hospitals, malls, restaurants, gas stations and attractions in the area, in addition to local police and fire stations, even school bus pick up locations. Assume your open house attendees don’t know the neighborhood.
4. Hand out information pertaining to your home as well as information on the other listed properties in the area showing that your house is the best value.
5. Do some staging to make sure your home looks its best.
6. Be sure to offer incentives. Some examples include a gift card to a home improvement store, paying for a year’s worth of yard care or a free session with a landscape architect, offering a $1,000 landscape allowance, paying for a years worth of homeowners fees, offering $1,000 for new appliances or any home improvement, offering a new carpet allowance or paying for lawn service for a year—the possibilities are endless.
7. Paint the garage floor (concrete paint). Making the garage look fresh and clean will make the whole house feel newer.
8. Send letters to all the neighbors inviting them to “pick their neighbor,” and be sure to include information about your home and the open house. Give them an incentive to talk about your home with other individuals in their sphere of influence. (i.e. a $200 gift card if they find your buyer).
9. Put up signs in your front yard and be sure to hang up as many directional signs as the neighborhood allows.
10. Put out flyers in surrounding shopping areas.
11. Have your agent create a video of your home and put the virtual tour on the Web.
12. Have your agent post ads on Craigslist and on any other free online listing sites you can find.
13. E-mail HR departments at local companies as many employees prefer to live close to their jobs but don’t make time for the house hunting process. This will make it easy for employees to find your home.
August 25, 2011 8:57 pm
Already on vacation or about to leave? With hurricane Irene heading towards the northeast, homeowners are paying close attention to where the storm will hit. “A little known benefit in most travel insurance policies could really make a difference for those travelers,” advises Chris Harvey, CEO of a travel insurance comparison company. “If a traveler’s home is rendered uninhabitable by a hurricane, their travel insurance policy may cover them to cancel their trip or come home early and receive reimbursement.”
Although many travelers would cut a trip short if they find out something bad happened to their home, almost none would make a travel insurance claim because they didn’t know they could. Having the option to file a claim would give travelers the chance to get back unused trip expenses, as well as the costs of flights to get home. This provides extra protection and peace of mind that unforeseen expenses are covered not just if something happens on the trip, but also at home while they are away.
Travelers should remember, in order for coverage to be effective, all travel insurance policies must be purchased before a hurricane is named. Since Irene became a tropical stom on August 22, only policies purchased before that date will provide coverage for the storm.
Another limitation to take into account is a travel insurance policy cannot be canceled due to “fear” of something bad happening. If someone wants the choice to cancel without providing a reason, it is recommended that travelers find a policy that offers the Cancel for Any Reason benefit. Cancel for Any Reason allows someone to cancel the trip without explanation, and receive a refund up to 75% of the trip cost, however, to qualify for this benefit, travelers must purchase a travel insurance policy within 14-30 days of the initial deposit payment.
For more information, visit www.squaremouth.com.
August 25, 2011 8:57 pm
In the second quarter of 2011, fixed-rate loans accounted for about 95% of refinance loans, based on the Freddie Mac Quarterly Product Transition Report released recently. Refinancing borrowers clearly preferred fixed-rate loans, regardless of whether their original loan was an adjustable-rate mortgage (ARM) or a fixed-rate.
An increasing share of refinancing borrowers chose to shorten their loan terms during the second quarter. Of borrowers who paid off a 30-year fixed-rate loan, 37% chose a 15- or 20-year loan, the highest such share since the third quarter of 2003.
According to Freddie Mac, 55% of borrowers who had a hybrid ARM chose a fixed-rate loan during the second quarter, while the remaining 45% chose to refinance into the same type of product. The share refinancing from hybrid ARM to hybrid ARM was the highest since the second quarter of 2004.
"Fixed mortgage rates averaged 4.65% for 30-year loans and 3.84% for 15-year product during the second quarter in Freddie Mac's Primary Mortgage Market Survey®, well below long-term averages," says Frank Nothaft, Freddie Mac vice president and chief economist. “The Bureau of Economic Analysis has estimated the average coupon on single-family loans was about 5.3 percent during the second quarter of 2011. It's no wonder we continue to see strong refinance activity into fixed-rate loans.”
He continued, "Compared to a 30-year, fixed-rate mortgage, the interest rate on 15-year fixed was about 0.8 percentage points lower during the second quarter. For borrowers motivated to refinance by low fixed-rates, they could obtain even lower rates by shortening their term. The initial interest rate on a 5/1 hybrid ARM was about 1.2 percentage points lower than on a 30-year fixed-rate loan. For borrowers who plan to remain in their current home for only a few years, the hybrid ARM allows for even greater interest-rate savings."
For more information, visit www.freddiemac.com or http://twitter.com/FreddieMac.
August 24, 2011 8:57 pm
It has been a sweltering August, and with that comes ferocious summer storms that often include thunderstorms and lightening. Lightning can strike at an average current of 30,000 amps, the equivalent of 100 million volts of electrical potential. When lightening does bolt down, it is at a temperature of about 50,000 degrees Fahrenheit. Statistically speaking, lightening storms are more responsible for injury, death and destruction each year than all hurricanes, tornadoes and floods combined. This statement is particularly true for the Northeast.
"Lightning striking a home can have a devastating impact on a family, even if no one is injured," says Kurt Detmer, vice president of marketing for a Michigan-based insurance company. "While it's true that lightning losses are generally a covered peril in most property insurance policies, many things can be lost that simply can't be restored. You can replace a damaged device, but personal photos, music, and other files stored on electronic devices can be irretrievably lost.” By following these few simple guidelines, you can keep your family safe and help prevent this sort of damage from ever occurring to your home.
Protect Your Personal Property
Every connection in your home is a potential route for lightning energy, including surface and buried connections, such as electrical, telephone, cable television and plumbing. Whole-house surge protection is ideally what you want to aim for. Surge breakers are available and can be installed on the main panel board. Alternatively, you can ask your utility company to install surge suppression right at your meter.
Equip devices separately, if possible. Things like telephones, computers and garage door openers can all be equipped with individual transient voltage surge suppressors (TVSS). These have three sets of MOVs (metal oxide varistor) rated at least 250-300 joules. If your device has built-in surge protection, MOVs are listed on their power supply circuit boards. Check all of your important electronics, and find out which of them needs to be protected.
Quality surge protectors are usually more expensive, however, provide better protection. In particular, higher-end surge protectors can activate thermal cut outs to prevent fire in the case of MOV failure. Most general protectors cannot do this.
Lightning rods are also a great idea employed by many. These need to be designed and installed by professionals, but they will provide additional protection. Or, if you want to do it the good old-fashioned way, unplug your electronics during a lightning storm. It really is the best protection for any electronic device.
By being conscientious of lightning damage that can potentially harm your home, you can take preventative measures to protect yourself, your family and your belongings.
August 24, 2011 8:57 pm
By Alexis McGee
With foreclosure numbers in the tens of thousands nearly everywhere across the country, many Americans who have never invested in real estate are wondering if now is the right time to find a great deal. The answer is yes as the indicators are strong for investors. Banks are selling foreclosed properties at huge discounts and strapped homeowners with foreclosure looming are looking for ways out of their predicament, including selling to investors.
Done right, buying a home pre-foreclosure creates a win-win situation. The homeowner gets needed cash, and the buyer, a solid investment property. Whether you opt to buy a discounted REO property from a bank or lender, or from an individual homeowner through a real estate agent, it’s essential to pay attention to the details.
1. Understand your state foreclosure laws. Before you set out to buy a foreclosure from anyone, it’s imperative that you understand the foreclosure laws of your individual state. Laws vary dramatically state by state and affect the foreclosure process timeline as well as sellers’ and buyers’ legal rights.
2. Use the right lead sources. Locate solid potential property leads with the help of reputable foreclosure listing websites and a professional real estate agent. Alternatively, you can manually cull county property records at your county recorders office.
3. Beware marketing come-ons like “instant riches.” Avoid websites or foreclosure “gurus” that promise instant riches with no effort and no money, or their “secrets” for a price. Keep your wallet in your pocket until you have thoroughly “Googled” the person and the company. If a website requires a user fee and won’t allow you a free trial first, look elsewhere.
4. Do your homework before you buy. Know the local market and the current prices for comparable properties in the area, as well as what kind of financing is available. Your real estate professional can help you with this. Even in today’s tight credit markets, money is available. If you plan to fix up a property then turn around and sell it quickly, don’t overlook a short-term cash loan from an individual money partner.
5. Investors: build solid relationships with listing agents for lender-owned (REO) properties. These are the people banks and lenders work with to sell the properties they own. With the right relationship, REO listing agents will contact you directly (before the property hits the Multiple Listing Service) so you get first shot at the good deals.
6. Know the quick sale market value of a property. Whether shopping for your own home or investing, before you buy a property, you must calculate the market value of the home if you needed to sell tomorrow. That value, minus your costs to fix up the property, to hold it, and to market and sell it, is the fair price to pay for the property today. If you’re buying the property as an investor, include your profit.
7. Know your not-to-exceed offer price. Set the number based on your calculations above, and stick to it. If you’re buying the home for your residence, you may have a tiny bit of wiggle room, but as an investor, it’s an absolute top offer price.
8. Look for motivated sellers. All discounts—read that "asking prices"—are not equal. REO lenders with overflowing properties in their portfolios likely will be willing to cut prices more significantly in order to remove the nonperforming asset off their books, especially given today’s credit crunch. For pre-foreclosure buyers, sellers need to understand how selling you their home will help them avoid foreclosure and put cash in their pockets for a fresh start.
9. Follow-up and patience is key. Whether you’re buying a bank-owned property or pre-foreclosure from a homeowner, success is in the details. Address and plan for all of them. Patience is critical, but as a buyer, time is on your side. Yes, it takes time and effort to buy foreclosures at a discount, but with the right knowledge and tenacity, your first deal is just around the corner.
For more information, visit www.foreclosures.com.
August 24, 2011 8:57 pm
Owning a vehicle can be enjoyable, but it also comes with a cost. On top of the purchase price, gas, maintenance, repairs and insurance costs can quickly add up. While insurance is mandatory for most people, overpaying for coverage can be avoided. Here are seven tips that may lead to lower auto insurance costs. With a little time spent, big savings could just be around the corner.
1. Shop around. With so many insurance companies on the market, collecting all the required information to make a decision can be overwhelming. Online comparison sites can do the analysis based on the information entered to present quotes for over 30 companies and provide the lowest rate available through its network. There’s also no need to wait for renewal papers to arrive, sometimes the available savings may well off-set the potential penalty.
2. Review current coverage. Most drivers are required to have liability coverage and many people choose to add comprehensive coverage. However, collision coverage may not be necessary for everyone. Collision coverage handles costs associated with damage sustained to the policy holder’s car. If the vehicle is very old, has high mileage, or is in poor condition, then it may not be worth the extra premium costs to receive this coverage.
3. Consider increasing the deductible. The deductible is the amount car owners are responsible for paying when a claim is made. A higher deductible would mean the insurance company pays less in the event of a claim. This decrease in risk is then transferred to the consumer in reduced premiums. There isn’t one ideal number for this as it all depends on each consumer’s comfort zone. There may be a preference to save more now with a higher deductible, or to have increased financial security in the event of a claim with a lower deductible.
4. Research discounts. There is power in numbers. The following are discounts that some insurance companies might consider when pricing a policy.
• Profession – By working in certain fields or holding a professional designation, there may be discounts available, depending on the insurance company. The quickest way to find out is by contacting your professional association or a broker.
• Group Affiliation – Alumni groups or trade unions may also provide discounts on insurance to its members.
• Auto clubs – Specialty vehicle clubs may have specially negotiated rates with certain insurers, thus offering lower premiums. Begin by checking the membership package, or contacting the current broker directly.
5. Combining insurance. Purchasing home insurance from the same company that provides the auto coverage may result in a savings of 5-10% off both premiums. Furthermore, adding another vehicle in the household to the same policy could lead to further discounts.
6. Installing winter tires. For those living in harsh winter conditions, this is more a matter of safety. Taking precautions to decrease the likelihood of accidents during dangerous conditions should always be considered. In fact, some insurance companies will take this into account and may offer a discount.
7. Accident forgiveness. Even the safest driver is susceptible to threats on the road from uncontrollable factors, like other drivers. Accident forgiveness will eliminate the effects that the first accident-related claim would have on premiums. Unlike the other tips that result in immediate savings, this will probably cost extra in the beginning. However, it may be well worth the additional cost so that effects on insurance rates are minimized in the event that you have an at-fault accident.
Stay informed and check for potential savings annually whenever their policy is up for renewal. The company that had the best rate for a specific car and driver profile last year may not be the one that can offer the best rate again. It doesn’t take long to grab hold of those savings; all you have to do is shop around.
For more information, visit InsuranceHotline.com.