Monthly Archives: June 2023

Law Will Impact Some Foreign-Buyer Purchases

Florida Realtors lawyers spoke to 6K+ members during a July 29 webinar, saying a new law impacting some property sales to certain foreign buyers goes into effect July 1. Some details are not yet clear, but a new disclosure will appear in FR/Bar, CRSP and other contracts on Sat., July 1, and buyers must sign a new affidavit.

ORLANDO, Fla. – Two Florida Realtors® lawyers – Vice President of Law and Policy and General Counsel Juana Watkins, and Deputy General Counsel Marcia Tabak – hosted a webinar on July 29 to give members an overview of upcoming changes when a bill passed by the Florida Legislature and signed by Gov. Ron DeSantis (SB 264) goes into effect on July 1.

To help with compliance, Florida Realtors worked with many entities, including the Leadership Team and the Florida Bar, to update the Florida Realtors/Florida Bar (FR/BAR) contracts, the Contract for Residential Sale and Purchase (CRSP) contract and an addendum, the CFBA-1. In addition, the Vacant Land Contract and Commercial contract have also been updated.

Three sections of the new law impact the state’s real estate industry. Florida Realtors offers more information on its website about the complicated implications of each section and a memorandum and accompanying flowchart.

Major takeaways from the webinar

Don’t offer advice: The penalties for noncompliance can be severe for buyers, sellers and possibly real estate agents. Watkins often repeated the phrase, “Don’t be the source of the information – be the source of the source.” While customers must be told that the law exists and that they must sign an affidavit saying they’re in compliance with the statute, agents should not volunteer information beyond the details now outlined in the contracts and new addendum.

Contract changes: Contract numbers and page counts will change, but the major update in the FR/Bar, CRSP and other contracts occurs directly above the buyers’ and sellers’ signature lines, framed in a box. The same paragraph also appears in the new addendum. That paragraph says:

                    ATTENTION: SELLER AND BUYER

CONVEYANCES TO FOREIGN BUYERS: Part III of Chapter 692, Sections 692.201 – 692.205, Florida Statutes, 2023 (the “Act”), in part, limits and regulates the sale, purchase and ownership of certain Florida properties by certain buyers who are associated with a “foreign country of concern”, namely: the People’s Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, the Venezuelan regime of Nicolás Maduro, or the Syrian Arab Republic. It is a crime to buy or knowingly sell property in violation of the Act.

At time of purchase, Buyer must provide a signed Affidavit which complies with the requirements of the Act. Seller and Buyer are advised to seek legal counsel regarding their respective obligations and liabilities under the Act.

New affidavit: The law outlines items to be included in an affidavit and charges the Florida Real Estate Commission (FREC) with creating one. However, FREC’s affidavit won’t be ready by July 1. In the meantime, closing agents and other groups, such as the Florida Land Title Association, are developing their own version of the affidavit.

Tabak and Watkins advised agents to ask the closing agent – once one has been determined – for a copy of the closing agent’s affidavit.

Fair housing concerns: Watkins offered another note of caution: There could be Fair Housing Act implications. She offered a warning to agents who might consider taking steps beyond simply explaining the new wording in the contracts: “Ensure that it’s neither your intent nor motive to discriminate against buyers based upon any protected classes,” she says. “Do not ask buyers questions about their national origin.”

The issue is extremely complicated: Buyers may ask Realtors questions. However, the law is untested in the courts, and only a party’s lawyer can understand how a specific clause will impact a specific buyer.

The penalties within the law can be harsh, and Watkins strongly urged members not to speculate on the statute’s impact. “Be the source of the source,” she repeated.

Finally, it’s difficult to determine whether a property is included in the new law. According to Tabak, for example, there is not, as of yet, an official list of military installations as referenced by the statute – nor is there a list, map or other way to determine if a property is located near critical infrastructure.

Some issues are still pending: FREC, the Florida Department of Agriculture and Consumer Services and the Florida Department of Economic Opportunity must all implement specific portions of the bill. As a result, many details are still pending.

Questions? Call Florida Realtors Legal Hotline.

© 2023 Florida Realtors®


Take Steps for Summer Holiday Safety

Florida Realtors: Floridians who plan to celebrate Independence Day away from home should take precautions to protect their residences, like using a timer for lights.

ORLANDO, Fla. – Have big plans for this July 4th? Many families across Florida and the nation will spend the Fourth of July holiday away from home, traveling to see relatives and a fireworks display, or maybe basking in the sunshine on the state’s beautiful beaches.

To fully enjoy those activities and other summertime pursuits spent away from home, Florida Realtors®  recommends that homeowners take precautions to protect their residences when they’re not around. Crime rates across the country often start to peak as temperatures rise during the warm weather months – the same time that many families leave their homes unoccupied and unprotected.

Homeowners can take these simple precautions to make their homes less of a target for criminals:

No “Home Alone”: Before leaving your home during the day, make it look as if someone is still at home by using timers on lights in various rooms. Even though daylight hours are longer during the summer, it may still get dark faster than you expect or you may return home later than anticipated, and taking this step ensures that your home appears occupied at all times.

No Sharing on Social Media: Sharing your vacation plans on social media sites isn’t wise. That’s the same as announcing to the world you’ll be gone and the house will be empty – a perfect target for burglars or vandals. The same goes for phone messages.

No Open-Door Policy: Ensure that all doors leading to the home and garage are locked, even when leaving for short periods of time. The typical burglary takes less than five minutes and unlocked doors, combined with an empty home, put out the “welcome mat” for crime. Make sure windows are locked, too.

Someone to Watch Over Me: Be landscape smart. Shrubbery and other plants can grow very rapidly during the warm, wet summer months. Keep them trimmed so neighbors can easily see your home. Also, a burglar could see an unkempt yard as a sign of an empty home.

A Key Reminder: When leaving home, take your house keys along or leave a spare set with a trusted neighbor. Never leave a key under a welcome mat, in a mailbox or other hiding spots – most burglars know where to look.

Crime Doesn’t Take a Vacation: If you’re planning to be away from home for more than a day or two, ask a neighbor pick up your mail and newspapers – or arrange to cancel the paper and hold the mail. Disable your garage door opener and manually lock it from the inside, and don’t forget to check that the door leading from the garage to the home is locked, too.

© 2023 Florida Realtors®


NAR: Pending Sales Down 2.7% in May

Pending sales declined largely because property listings are down. NAR Economist Yun calls market “resilient with approximately three offers for each listing.”

WASHINGTON – Pending home sales shrunk 2.7% month-to-month in May, according to the National Association of Realtors® (NAR). Three out of four U.S. regions posted monthly losses, though sales surged in the Northeast. In a year-to-year comparison, however, all four regions saw declines.

But “despite sluggish pending contract signings, the housing market is resilient with approximately three offers for each listing,” says NAR Chief Economist Lawrence Yun, “The lack of housing inventory continues to prevent housing demand from being fully realized.”

NAR’s Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – dropped to 76.5 (2.7%) in May. Year over year, pending transactions fell by 22.2%. An index of 100 is equal to the level of contract activity in 2001.

“It is encouraging that homebuilders have ramped up production, but the supply from new construction takes time and remains insufficient,” adds Yun. “There should be more focus on boosting existing-home inventory with temporary tax incentive measures.”

Pending home sales regional breakdown

  • The Northeast PHSI climbed 12.9% from last month to 66.7, a decrease of 21.9% from May 2022
  • The Midwest index dropped 5.3% to 74.4 in May, down 23.5% from one year ago
  • The South PHSI decreased 4.4% to 94.4 in May, reducing 19.6% from the prior year
  • The West index lessened 6.1% in May to 58.4, falling 26.6% from May 2022

The index is based on a sample that covers about 40% of multiple listing service data each month. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

© 2023 Florida Realtors®


Average Long-Term U.S. Mortgage Rate Rises to 6.71%

Freddie Mac: The 30-year FRM increased, snapping a three-week pullback from 6.79% on June 1, which was the highest level so far this year.

LOS ANGELES (AP) – The average long-term U.S. mortgage rate rose this week, snapping a three-week pullback after reaching a high for the year in early June.

Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan rose to 6.71% from 6.67% last week. A year ago, the rate averaged 5.70%.

The increase brings the average rate back to where it was three weeks ago. On June 1, it averaged 6.79%, its highest level so far this year.

High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market that remains unaffordable to many Americans after years of soaring home prices and limited housing inventory.

The median monthly payment listed on applications for home purchase loans in May rose to $2,165, up 14.1% from a year ago and a 2.5% increase from April, the Mortgage Bankers Association said Thursday.

The average rate on a 30-year home loan is still more than double what it was two years ago, when the ultra-low rates spurred a wave of home sales and refinancing. The far higher rates now are contributing to the low level of available homes by discouraging homeowners who locked in those lower borrowing costs two years ago from selling.

The dearth of properties on the market is also a key reason home sales have been slow this year. Last month, sales of previously occupied U.S. homes were down 20.4% from a year earlier, marking 10 consecutive months of annual declines of 20% or more, according to the National Association of Realtors.

Low mortgage rates helped fuel the housing market for much of the past decade, easing the way for borrowers to finance ever-higher home prices. That trend began to reverse a little over a year ago, when the Federal Reserve began to hike its key short-term rate in a bid to slow the economy to lower inflation.

Global demand for U.S. Treasurys, which lenders use as a guide to pricing loans, investors’ expectations for future inflation and what the Fed does with interest rates influence rates on home loans.

All told, the Fed raised its benchmark rate 10 times, starting in March 2022. The central bank opted to forgo another increase at its meeting of policymakers earlier this month. Still, the Fed warned that it could raise interest rates two more times this year in its battle against inflation.

That open-ended approach has heightened uncertainty about the Fed’s next moves, which could lead to more volatile moves for mortgage rates.

The average rate on 15-year fixed-rate mortgages, popular with those refinancing their homes, also rose this week, increasing to 6.06% from 6.03% last week. A year ago, it averaged 4.83%, Freddie Mac said.

Copyright © 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


FHA Increases Large Multifamily Loans Threshold

The threshold – now raised to $120M from $75M – offers greater flexibility for lenders when underwriting multifamily large loans.

WASHINGTON – The Federal Housing Administration (FHA) published a Mortgagee Letter that increases the threshold at which a multifamily loan is considered a large loan from $75 million to $120 million. It’s the first increase in the threshold since 2014 and will enable a greater number of transactions to use standard underwriting processes when submitted for FHA multifamily insurance.

FHA also said it will review the threshold on an annual basis, with the possibility of increasing it in $5 million increments if warranted. The changes are designed to simplify underwriting for multifamily housing development without presenting undue risk to FHA, and to provide for regular adjustments to the threshold so it does not unduly lag market changes.

“We know that borrowers are contending with the dual challenges of increased development costs and meeting the nation’s dire need for more rental housing,” says Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. “Anything we can do to prudently alleviate extra steps in obtaining FHA insurance will help all of us meet the housing supply challenges before us.”

“Revising the threshold, which is almost a decade old, is an important step for us and for the industry,” adds Deputy Assistant Secretary for Multifamily Housing Ethan Handelman. “We want stakeholders to be able to rely on FHA-insured financing for a wide variety of multifamily transactions, and without unnecessary barriers.”

© 2023 Florida Realtors®


Who Trains a Real Estate Coach?

A good RE coach listens to the agents being taught. It builds teams when people feel valued and heard, plus smart questions make coaches better.

NEW YORK – An effective coach is crucial to help real estate agents be more adaptable, agile, and prepared to deal with any situation.

Real estate leaders need a strong relationship with their team, and that involves investing time in order to know them and understand their strengths and weaknesses. To get there, the team should be encouraged to voice their ideas, concerns and questions in a setting that makes them feel valued and heard – and as part of those concerns, leaders should request feedback on themselves.

Other key aspects of coaching

  • Give feedback. It should be specific, actionable and timely.
  • Recognize successes.
  • Empower team members to take ownership of their careers. Leaders should help them by providing the resources and tools they need to grow and improve, such as training opportunities and professional development.
  • Provide technology. Leaders should offer access to technologies, such as automation and customer relationship management (CRM) to help team members streamline their work, improve communication and eventually get better results.
  • Encourage teamwork. Coaches should inspire team members to work together by sharing their knowledge and expertise, focusing on the big picture, and being proactive before problems arise.
  • Transparency. Leaders need to be open and communicate their expectations clearly, while at the same time helping agents set and reach their own personal goals.
  • Creativity. Team members should be encouraged to work as a team and think outside the box.

Source: Inman (06/21/23) Davis, Darryl

© Copyright 2023 INFORMATION INC., Bethesda, MD (301) 215-4688


Fla. Hit by Tsunami – But Not the Kind You Think

A coastal flood watch or warning may really be a meteotsunami, such as one that hit Clearwater Beach last Wed. It’s caused by gusty ocean storms.

CLEARWATER BEACH, Fla. – An unexpected culprit toppled beach chairs along the sand at normally calm Clearwater Beach, Florida, last Wednesday. West Coast surfers might snicker at the cause, but the National Weather Service confirms the rare 4-foot (1.2 meter) wave was caused by a kind of tsunami, just not the kind you usually hear about.

It was a meteotsunami, a type caused by storms with strong gusting winds, rather than the dramatic tsunamis triggered by earthquakes.

What is a meteotsunami?

According to Paul Close, senior forecaster at the National Weather Service in the Tampa Bay area, when a line of storms tracks over the ocean, there can be 30- to 50-mph (48- 80-kph) winds near the leading edge. The winds push the water, increasing the wave height near the coast before it eventually crashes onto shore. Meteotsunamis only last about an hour because once the leading edge of the storm passes onto land, the action subsides.

The meteotsunami was about 2.5 feet (0.8 meters) higher than the forecast wave height and around 4 feet (1.2 meters) higher than average sea level.

Six-foot (1.8 meter) and higher meteotsunamis have been recorded around the world.

The weather service does not issue specific advisories for meteotsunamis. If the agency forecasts that a storm will have substantial impact, it issues a coastal flood watch or warning.

When do meteotsunamis form?

Close said that stronger storms and squall lines – groups of storms that track in a line with intense winds and heavy rain – are more common during the winter around Florida.

“They don’t happen that often this time of year, but the current atmospheric pattern has been kind of unusual with all the heat out in Texas and the cool and damp weather in the Northeast,” Close said.

This time of year, winds from the east are more common, he said. But the winds have been from the west almost all of June.

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. Associated Press climate and environmental coverage receives support from several private foundations. See more about AP’s climate initiative here. The AP is solely responsible for all content.


FHFA April Price Index Up 3.1% Year-to-Year

Month-to-month, prices rose 0.7% nationally – though it ranged from a price drop of 3.8% in the Pacific region to an increase of 6.1% in the East South Central region.

WASHINGTON – U.S. house prices rose in April, up 0.7% from March, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI), which tracks all U.S. mortgages under government-sponsored enterprises, notably Fannie Mae and Freddie Mac.

Year-to-year, house prices rose 3.1% in April 2023. A previously reported 0.6% increase for March was revised downward to 0.5%.

For the nine census divisions, seasonally adjusted monthly price changes from March 2023 to April 2023 ranged from +0.1% in the Pacific division to +2.4% in the New England division. The 12-month changes ranged from -3.8% in the Pacific division to +6.1% in the East South Central division.

“U.S. house prices generally increased moderately in April,” says Dr. Nataliya Polkovnichenko, Supervisory Economist in FHFA’s Division of Research and Statistics. “However, on a year-over-year basis, house prices in some regions of the country continued to decline.”

The FHFA HPI is a comprehensive collection of publicly available house price indexes that measure changes in single-family home values based on data that extend back to the mid-1970s from all 50 states and over 400 American cities. It incorporates tens of millions of home sales and offers insights about house price changes at the national, census division, state, metro area, county, ZIP code, and census tract levels.

© 2023 Florida Realtors®


New Home Sales Jump 12.2% Higher in May

Faced with a dearth of existing homes for sale, buyers flocked to new-home options even in the shadow of higher interest rates.

WASHINGTON – Solid consumer demand and a lack of existing for-sale homes helped boost May’s new home sales to its highest level since February 2022.

Sales of newly built, single-family homes in May increased 12.2% to a 763,000 seasonally adjusted annual rate, according to data released by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“While builders continue to grapple with elevated construction costs, an encouraging sign is a big gain in home sales priced in the $200,000 to $300,000 price range,” says Alicia Huey, chairman of the National Association of Home Builders (NAHB. “In May 2022, just 5,000 homes sold in this range. That total increased to 12,000 in May 2023.”

“The lack of resale homes available for sale – at just a three months’ supply – is supporting demand for newly built homes,” adds NAHB Chief Economist Robert Dietz. “New home inventory was 31% of total inventory in May. Historically, it is typically 10% to 15%.

“Further, the pace of resales is down 20% from a year ago, while the rate of new home sales is up 20% from a year ago.”

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the May reading of 763,000 units is the number of homes that would sell if this pace continued for the next 12 months.

New single-family home inventory in May was 428,000, down 2.9% compared to a year ago. This is down to a more balanced 6.7 months’ supply at the current building pace, despite tight existing home supply conditions. A measure near a 6 months’ supply is considered balanced.

The median new home sale price in May was $416,300, down 7.6% compared to a year ago.

Regionally, on a year-to-date basis, new home sales are up 0.8% in the Northeast and 1.6% in the South. New home sales are down 2.5% in the Midwest and 20.7% in the affordability-challenged West.

© 2023 Florida Realtors®


Consumers Notably More Confident this Month

If consumer attitudes drive the economy, a recession appears less likely. The Consumer Confidence Index hit 109.7 in May, up from April’s 102.5.

BOSTON – The Conference Board Consumer Confidence Index increased in June to 109.7  up from 102.5 in May.

The Present Situation Index – consumers’ assessment of current business and labor market conditions – rose to 155.3, up from 148.9 last month.

The Expectations Index – consumers’ short-term outlook for income, business and labor market conditions – rose to 79.3 from 71.5 in May. Expectations have remained below 80 – the level associated with a recession within the next year – every month since February 2022, with the exception of a brief uptick in December 2022.

However, June’s reading was just a shade below 80 and up sharply from last month’s reading.

“Consumer confidence improved in June to its highest level since January 2022, reflecting improved current conditions and a pop in expectations,” says Dana Peterson, chief economist at The Conference Board. “Greater confidence was most evident among consumers under age 35 and consumers earning incomes over $35,000.”

While the Expectations Index still suggests a recession ahead, it may have turned a corner, and “a new measure found considerably fewer consumers now expect a recession in the next 12 months compared to May,” Peterson says. “Meanwhile, on a six-month moving average basis, plans to purchase autos and homes have slowed after picking up earlier in 2023.”

The slowdown in big-ticket items might be related to the higher cost of credit as interest rates rise.

“Vacation plans within the next six months continued to flag, led largely by declines in plans to travel domestically,” Peterson adds. “This is an important indicator of desires to spend on services ahead, which … signal that post-pandemic ‘revenge spending’ on travel may have peaked and is likely to slow over the rest of this year.”

Present situation

“Assessments of the present situation rose in June on sunnier views of both business and employment conditions,” says Peterson. “Indeed, the spread between consumers saying jobs are ‘plentiful’ versus ‘not so plentiful’ widened, indicating upbeat feelings about a labor market that continues to outperform.”

  • 23.7% of consumers said business conditions were “good,” up from 19.7% last month.
  • 16.3% said business conditions were “bad,” down from 16.7%.
  • 46.8% said jobs were “plentiful,” up from 43.3%.
  • 12.4% said jobs were “hard to get,” slightly lower than 12.6% last month.

Expectations six months in the future

Consumers were marginally more optimistic about the short-term business conditions outlook in June.

  • 14.2% of consumers expect business conditions to improve, up from 13.2%.
  • But 17.7% expect business conditions to worsen, down from 21.4%.
  • 15.5% of consumers expect more jobs to be available, up from 13.8%.
  • 16.0% anticipate fewer jobs, down from 21.1%.
  • 16.9% expect their incomes to increase, down from 18.9%
  • 11.9% expect their incomes to decrease, up from 11.4%

Family’s current financial situation

“While income expectations ticked down slightly in June, new questions included in this month’s release found a notably brighter outlook for consumers’ family finances: Around 30% expect their family’s financial situation to be ‘better’ in the next six months, compared to less than 14% expecting it to be ‘worse,’” says Peterson. “This might reflect consumers’ belief that labor market conditions will remain favorable and that there will be further declines in inflation ahead. Indeed, the 12-month forward inflation expectations gauge fell to 6% in June, the lowest reading since December 2020.”

  • 28.5% of consumers say their current family financial situation is “good,” down slightly from 29.2% in May.
  • 18.2% say their current family finances are “bad,” down from 19.5%.

Family’s expected financial situation, six months in the future

  • 30.3% of consumers expect their family finances to be “better,” up from 28.9% in May.
  • 13.7 % expect family finances to be “worse,” down from 14.9%.

This positive outlook might reflect consumers’ expectation that labor market conditions will remain favorable and that there may be further declines in inflation ahead.

Perceived likelihood of a U.S. recession

After rising steadily since August 2022, recession fears appear to have eased considerably in June: 69.3% of consumers say a recession is “somewhat” or “very likely,” down from 73.2% in May.

Toluna, a technology company, conducts the monthly Consumer Confidence Survey for The Conference Board.. The cutoff date for the preliminary results was June 20.

© 2023 Florida Realtors®


Fraud Pushes Insurers to Balk, Even on Valid Claims

FORT LAUDERDALE, Fla. – If you want to know why insurance companies often take adversarial positions toward homeowner claims, look no further than the number of fraud cases investigated each year.

From double dipping – filing claims for the same damage to two different companies – to buying homeowner insurance for properties operating as assisted living facilities, there’s no end to schemes some policyholders, public adjusters, contractors and agents will employ for financial advantage.

Fraud is one of several reasons that insurance rates in Florida have skyrocketed over the past five years. But even as the state increases its fraud-fighting resources and investigates more complaints each year, the number of arrests and convictions that result from those investigations is surprisingly low.

In fact, less than 2% of investigations opened by the state Department of Financial Services results in a conviction. Insurers, it seems, can easily deny coverage of claims and cancel policies when they suspect fraud, but prosecutors require more evidence to bring criminal charges against alleged perpetrators.

Recent examples of fraud reported this month by state-owned Citizens Property Insurance Corp. include a May arrest of a public adjuster, Yoel Sainz Fraga, in Miami for offering an elderly homeowner a free inspection by telling her he was a “government inspector,” then filing a $13,000 insurance claim for water damage to the homeowner’s kitchen sink without the homeowner’s knowledge. The problem, the report cited, was that the kitchen sink wasn’t damaged.

Yet no immediate arrests were reported in a number of other cases cited in the same report:

  • In Palm Beach County, Citizens investigated two separate non-weather water losses that were reported four days apart at the same property and determined there was no evidence to show that $20,000 in plumbing work was performed as claimed by the homeowner’s attorney and loss consultant.
  • In Broward County, an investigation into two unrelated non-weather water claims found that the policyholder had filed claims with a previous insurer for the same damage.
  • In Hillsborough County, Citizens denied a $75,000 claim for theft and vandalism after determining that the policyholder sold the personal property on Facebook Marketplace.
  • In Volusia County, Citizens denied a $20,000 claim for roof damage attributed to Hurricane Ian after determining that the damage occurred prior to the storm.
  • And in six counties, Citizens identified 12 properties that had obtained homeowner insurance despite operating as assisted living facilities. Coverage for the properties was voided.

How fraud is investigated in Florida

While dealing with tens of thousands of normal insurance claims per year, insurance companies rely on a state-funded fraud-fighting unit operated by the Department of Financial Services.

In 2021, the Florida Legislature approved creation of two new units to supplement the department’s efforts to combat property insurance fraud. The resulting Bureau of Insurance Fraud units, totaling 12 people, are among 90 sworn state fraud investigators working on homeowners and auto fraud cases. They look into 6,700 property insurance fraud complaints per year, according to DFS spokesman Devin Galetta.

Citizens, currently Florida’s largest insurer with 1.3 million policyholders, operates its own fraud investigation unit with 33 employees and contracts with nine private companies to investigate allegations of fraud, including during increases in claims activity following hurricanes and other catastrophic events.

But those contracts are expiring this year. According to a document filed for a June 8 meeting of Citizens’ claims committee, the company is seeking $1.5 million over five years to contract with eight new companies. Citizens’ Board of Governors will consider the proposal at its July 12 meeting.

Citizens’ Special Investigation Unit anticipates investigating 68% more fraud tips over the next five years, primarily because the number of Citizens’ policyholders continues to increase.

Yet, despite an increase in Citizens policies from 419,000 in 2019 to 1.3 million in May, the number of cases investigated by Citizens’ SIU and its outside partners each quarter has remained flat, according to data presented by the team since late 2019.

That’s because fraud generally follows claims, Citizens spokesman Michael Peltier said, and claims from Citizens’ recent policyholder surge are only now beginning to climb. “Also, in prior years we had a number of active major cases that accounted for a spike in referrals and those investigations have ended,” Peltier said.

In the fourth quarter of 2019, Citizens’ SIU unit reported accepting 333 investigations, completing 339, and referring 84 cases to the Department of Financial Services for further investigation and potential arrests.

In the first quarter of 2023, the unit reported accepting 347 investigations, completing 327 and referring 60 cases to DFS.

The quarter with the largest number of investigations accepted – 409 – was the second quarter of 2021. The largest number of referrals to DFS was 88 in the third quarter of 2021.

Investigations and arrests by the Department of Financial Services’ investigators, however, have increased from 1,914 complaints and 104 open cases in the 2020 budget year that ended June 30 to 2,585 complaints and 341 cases in the 2022 budget year, according to data provided by Galetta. The number of arrests by prosecutors increased from 21 to 56 during those two years, while successful prosecutions increased from 26 to 39.

So far in the 2023 budget year, the unit has investigated 3,114 complaints, opened 265 cases, and presented 113 cases to prosecutors who made 63 arrests and oversaw 40 successful prosecutions.

Information on how many of those arrests and prosecutions stemmed from Citizens’ referrals was not immediately available.

When asked why the number of fraud arrests are so small compared to the number of investigations, Galetta pointed to a fact sheet with information about the department’s fraud-fighting activities. It states that if department investigators believe a crime was committed, can identify a perpetrator and establish criminal intent, they present the information to local, statewide or federal prosecutors.

“If the prosecutor believes there is enough evidence to pursue charges, then charges are filed and an arrest is conducted,” the fact sheet states.

How fraud charges have led to higher rates, less coverage

Losses from fraudulent activity and increases in fraud on organized levels have led to greater losses for insurers, increases in premiums for policyholders, and new laws allowing insurers to downgrade coverage of elements subject to the most abuse.

In July 2021, the state’s Division of Investigative and Forensic Services announced the arrest of a Fort Myers roofing contractor employee on charges of intentionally damaging roofs of insurance customers. A Citizens-filed investigator obtained video footage of the employee in the act using a tool to pry and manipulate roofing shingles before Citizens’ adjuster arrived.

That and similar reports of door-to-door canvassing by roofing contractors convinced the state Legislature in 2022 to approve allowing insurers to downgrade roof coverage in standard homeowner policies, and require full coverage to be provided only upon request and for an additional charge.

Prior to that, allegations that contractors and attorneys worked together to submit fraudulent non-weather water damage claims led the Legislature and state insurance regulators to approve a long list of coverage erosions. They included approvals in 2018 by the Florida Office of Insurance Regulation letting insurers cap non-weather water damage payouts at $10,000 unless policyholders opt for full coverage or agree to let their insurer dispatch their repair contractor.

Fraudulent claims submitted by contractors for roof repairs and non-weather water damage led the Legislature last year to bar contractors from obtaining “assignments of benefits” from property insurance policyholders.

While a wide range of laws enacted last year and this spring are expected to eventually slow down rates of exploitation by contractors and attorneys, they won’t necessarily prevent policyholders from filing false claims or submitting false information to get cheaper insurance.

Those activities will hopefully be reduced by increases in investigative resources and public education efforts, Galetta said.

The state’s new homeowner fraud fighting squads “proactively responded” to Southwest Florida areas impacted by Hurricane Ian last fall “to provide contact information and raise awareness against fraud,” he said.

“Although these activities did not always result in opened cases,” Galetta added, “they play a pivotal role in discouraging fraud and educating the public.”

© 2023 South Florida Sun-Sentinel. Distributed by Tribune Content Agency, LLC.


A Strange Reason Home Prices Rose? PPP Fraud

Study: In some U.S. ZIP codes, Paycheck Protection Program (PPP) fraud was so prevalent that housing prices rose 5.7 percentage points more than in low-fraud areas.

NEW YORK – Researchers at the University of Texas have concluded that fraud related to the Paycheck Protection Program (PPP) was widespread enough to increase real estate prices within certain U.S. ZIP Codes: 5.7 percentage points higher than in comparable low-fraud ZIP Codes in the same county, even when controlling for a range of other possible factors.

Researchers at the University of Texas at Austin’s McCombs School of Business released the report on June 22.

Why the impact on home prices?

The research finds people who received fraudulent PPP loans were significantly more likely to purchase a home during the program than those who got the money legitimately – and that ultimately drove up home prices for everyone around them.

Fraud also had an impact on inflation even when the researchers controlled for other factors, including land supply, prior house price growth, the ability for residents to work remotely, population density, net migration, distance to central business district, and previous rates of remote work.

The government used traditional banks as a conduit for money but also turned to fintechs (financial technology, which includes a range of options) after industry groups said they could speed up the process. But the paper said some fintech companies appeared to take a relaxed approach to controls.

The pandemic fraud was a “transitory and temporary demand shock,” the researchers concluded, meaning that house prices in the areas more affected by fraud-related inflation are also likely to experience faster depreciation.

Source: Wall Street Journal (06/22/23) Vanderford, Richard

© Copyright 2023 INFORMATION INC., Bethesda, MD (301) 215-4688


Top Marketing Tool? A Strong Lead Magnet

A lead is simply “contact info for a potential buyer or seller,” and a top way to get leads is by offering something of value – a “lead magnet” – in exchange for that info.

NEW YORK – Lead magnets are a popular tool for generating leads by offering something of value in return for a potential customer’s contact information.

The ultimate lead-magnet objective is to get contact info, but the lead magnet’s initial goal is to entice visitors to a real estate agent’s website or social media platform. Once there, the offer – ideally – is tempting enough to coax some personal information out of potential clients.

To create effective real estate lead magnets, agents must identify their audience’s pain points, then offer practical and valuable remedies that ease the pain. A lead magnet should also be high quality and easily digestible.

Once the lead magnet is ready, agents should integrate it with their website, promote it across all digital channels, follow up with additional content, and monitor and analyze results to help refine the lead magnet and their general marketing strategy.

Some potentially effective lead magnets include a comprehensive homebuyer’s guide, a home valuation or market analysis report, neighborhood guides, an ROI (return on investment) property calculator, and webinars or video tutorials.

Source: Realty Biz News (06/20/2023) Shepardson, Ben

© Copyright 2023 INFORMATION INC., Bethesda, MD (301) 215-4688


HUD Creates New Office for Manufactured Housing

HUD sees more manufactured housing as part of the nation’s affordable housing solution, and an independent office now reports directly to a top FHA official.

WASHINGTON – The U.S. Department of Housing and Urban Development’s (HUD) Office of Housing announced the creation of a new Office of Manufactured Housing Programs – an independent office reporting directly to Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon.

Moving the office closer to top decision makers acknowledges manufactured housing’s expected role in meeting the nation’s affordable housing needs.

“This organizational change represents a recognition of the critically important role that manufactured housing plays in our country’s housing market,” says Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. “Thanks to the work executed by our Office of Manufactured Housing Programs over the last two years, we have made significant progress to support the availability of modern and affordable manufactured homes.”

About the Office of Manufactured Housing Programs

The Office of Manufactured Housing Programs is part of HUD’s Office of Housing and administers the Manufactured Home Construction and Safety Standards, commonly referred to as the HUD Code.

The HUD Code creates federal standards for the design and construction of manufactured homes to assure quality, durability, safety and affordability. The Office enforces standards directly or through state agencies that have partnered with HUD. It inspects factories and retailer lots, regulates installation standards for homes, and administers a dispute resolution program for defects.

The Office also oversees a Manufactured Housing Consensus Committee, a federal advisory committee composed of 21 producers, users, and general interest and public officials to advise HUD.

© 2023 Florida Realtors®


Property Tax Scam Uses First-Class Mail

Homeowners are receiving official-looking letters by first-class mail saying they haven’t paid taxes yet. It’s big in Chicago now but appeared in Fla. a few years ago.

CHICAGO – Lake County (Illinois) Treasurer John Petalas urges taxpayers to be aware after multiple complaints have come in regarding fraudulent delinquent taxpayer notifications demanding payment. Petalas said the office has had three taxpayers this week come in with the letters to question the legitimacy because they had concerns about the amounts they allegedly owed.

The notifications are being sent to businesses and individuals via first class mail and are seeking payment for a specified amount. The 800 phone number in the letters is also active, but he warned the letters are not from the treasurer’s office.

Since the letters are sent by first class mail instead of through a telephone call, Petalas said he worries people may be more likely to fall victim.

“I am concerned someone will pay them,” Petalas said.

One letter obtained by the treasurer’s office was delivered to Humane Indiana in Munster. The header on the letter reads: “Tax Resolution Lake County Public Judgement Records” and provides an 800 phone number. The heading on the letter reads “Distraint Warrant” in bold type.

The letter demands payment of delinquent taxes to avoid collection proceedings that could include “garnishment of wages and bank accounts, property seizures, federal tax refund offset, and creation of a property lien.” The letters provide an amount due and a number to call.

Petalas and Ofelia Gregoline, executive assistant to the treasurer’s office, said these letters are a scam and encouraged taxpayers to call the office if they have questions about any correspondence seeking payment.

Fortunately, the taxpayers receiving the letters realized the fraud and did contact the office instead of making a payment. They fear not everyone will be so lucky.

Gregoline said the office has been in touch with the U.S. Postal Inspection Service and has been instructed to advise people receiving the letters to file a fraud case at uspis.gov/report under the mail fraud header. The treasurer’s office cannot file the complaint. Only recipients of a letter can.

Andrew Brandsasse, postal inspector team leader with the U.S. Postal Inspection Service, said to his knowledge the USPS Detroit Division, which oversees Indiana and Michigan, has not received any complaints of related activity to the letter and has no active investigation into such.

“If a person or entity utilized the U.S. Mail in furtherance of a fraud scheme, however, that would be a violation of Title 18, United States Code, Section 1341, which is punishable by up to 20 years in prison and a fine upon conviction,” Brandsasse wrote in response to a list of emailed questions.

An informed public is essential to stopping these types of scams, he said.

“These complaints can be investigated and, if warranted, charges can be issued by the U.S. Attorney’s office or other relevant prosecutor’s office,” Brandsasse said.

He encouraged anyone receiving a letter to do their due diligence as they would with a scam phone call or internet listing. Instead of calling the phone number on the letter, recipients can conduct an internet search on the entity that supposedly sent the letter and use the contact information on the official website to verify the letter’s authenticity.

Often an internet search of the phone number or email provided in the letter will produce search results with scam warnings.

An internet search of the phone number provided in the letter turned up scam reports dating as far back as 2019. A search of news reports showed officials warning about a “Distraint Warrant” scam in Pennsylvania, New York and Florida.

“If the legitimacy of the letter cannot be immediately confirmed, do not be quick to part with your money, and never hesitate to file a report with the U.S. Postal Inspection Service or local law enforcement,” Brandsasse said.

Gregoline said the letters appear to target areas around the country in advance of when that area would be sending out its delinquent tax notices. Gregoline said the county’s demand notices will begin going out in July. The county has not mailed any letters seeking delinquent payments yet this cycle.

Gregoline said the letters also use terminology that appears intended to confuse the recipient, mixing language that would pertain to physical property taxes and personal property taxes.

© 2023 Chicago Tribune. Distributed by Tribune Content Agency, LLC.


Fla. Amends Do-Not-Call Law to Ease Confusion

BOSTON – Nearly two years ago, the Florida Legislature amended Florida’s Telephone Solicitation Act (FTSA), Fla. Stat. § 501.059, resulting in voluminous consumer class action and other litigation after there had previously been next to none. Now, the Florida Legislature has again amended the statute, and in several business-friendly respects.

Specifically, on May 25, 2023, Florida Gov. Ron DeSantis signed HB 761 into law, amending the FTSA and reducing some of the risks faced by businesses marketing to consumers in Florida through calls and text messages. As the authors here have written previously, the FTSA originally contained significant inconsistencies with the federal Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227 et seq., with respect to prohibitions on marketing calls or texts, and has faced multiple challenges on constitutional grounds since it was passed.

As FTSA litigation proliferated, the statute’s inconsistencies and ambiguities became a focal point for businesses defending these suits and attempting to comply.

The statute’s ambiguity and resulting compliance challenges stemmed largely from two aspects of the statute:

  • First, FTSA Subsection (8)(a) prohibited sales calls and texts placed using an “automated system” without obtaining prior express written consent of the called party. That prohibition purported to apply to calling technology more broadly than the TCPA and failed to offer any definition of an “automated system.”

    As readers will recall, it was the lack of coherent definition of an “automated telephone dialing system” under the TCPA that caused years of confusion among courts and businesses alike before the U.S. Supreme Court in 2021 in Facebook, Inc. v. Duguid ultimately resolved the plain meaning of the definition.

  • Second, the FTSA’s so-called area-code presumption, providing that a sales call or text made to a number with a Florida area code is presumptively made to a Florida resident and, therefore, covered by the Act, presented businesses with a compliance challenge. That challenge arose from the reality that the area code associated with a cellular telephone number often does not correspond to where the user of that number resides or receives all calls.

The May 2023 Amendment to the FTSA, which became effective immediately upon the governor’s signature on May 25, 2023, affects Subsection (8)(a) by updating its prohibitions to apply to only “unsolicited” sales calls, and (as discussed in more detail below) by changing the definition of “automated system” to more closely conform to the TCPA’s definition of an automatic telephone dialing system (or ATDS), as confirmed by the Supreme Court.

The amendment also updates significant definitions related to securing prior express written consent for calls and adds new restrictions on commencing a lawsuit based on text message solicitations. All of these changes “apply to any suit filed on or after the effective date of this act and to any putative class action not certified on or before the effective date of this act.”

In other words, for any pending putative class actions, the amendment applies retroactively by its express terms.

The amendment does not bring the FTSA into complete conformance with the TCPA, and so additional compliance measures for marketing calls made to Florida residents and area codes are still required. However, these changes are a step in the right direction for businesses seeking reasonable reforms to an otherwise complicated and patchwork regime of state and federal laws.

Changes to Subsection (8)(a): “Unsolicited Telephonic Sales Calls” and “Automated System”

Significantly, the amendment:

  1. revises the statute to prohibit certain unsolicited telephonic sales calls and
  2. clarifies that the prohibition applies to certain calls involving an “automated system” for the “selection and dialing of telephone numbers.”

Specifically, the amendment changes the language in Subsection (8)(a) as follows:

(8)(a) A person may not make or knowingly allow to be made an unsolicited telephonic sales call  if such call involves an automated system for the selection and dialing of telephone numbers or the playing of a recorded message when a connection is completed to a number called without the prior express written consent of the called party.

The addition of “unsolicited” to Subsection (8)(a) likely resolves an ambiguity in the original version of the law that made the prohibition apply to calls made pursuant to a nonwritten request to be called (e.g., inbound calls). Now, it is clear that the statute does not cover and does not prohibit calls placed to a consumer:

  1. in response to an express request
  2. in connection with an existing debt or contract
  3. with whom the caller has an existing business relationship, or
  4. by a newspaper publisher in connection with its business

Next, under the original version of the law, Subsection (8)(a)’s prohibition applied to calls involving “an automated system for the selection or dialing of telephone numbers.” Based on the amendment, the restrictions now apply only to calls involving “an automated system for the selection and dialing of telephone numbers.”

This change to the conjunction reduces the universe of possible telephony technology covered under the law and more closely matches the TCPA’s definition of an ATDS that similarly requires the technology to both generate the telephone number and then dial the telephone number. See 47 U.S.C. § 227(a)(1).

In other words, for the FTSA to apply, an automated system must dial the telephone number, not just select it. Despite this change, however, the FTSA may still be construed to have a broader application than the TCPA because it is not explicitly limited to technology that randomly or sequentially generates phone numbers.

Prior express written consent

The amendment also updates the law’s definition of “prior express written consent” and “signature” for purposes of giving such consent. For example, the amendment states that for purposes of the statute, a “signature” includes “[an] action that demonstrates express consent, including but not limited to, checking a box indicating consent or responding affirmatively to receiving text messages, to an advertising campaign, or to an email solicitation.”

This change clarifies that these additional forms of consent are sufficient for obtaining “prior express written consent,” which requires the “signature of the called party.”

Limitations on text message solicitation lawsuits

The amendment also adds restrictions on plaintiffs seeking damages for “text message solicitations.” Before filing such an action, “the called party must notify the telephone solicitor that the called party does not wish to receive text messages from the telephone solicitor by replying ‘STOP’ to the number from which the called party received text messages … .” The person or entity that was sending marketing text messages then has 15 days “after receipt of such notice” to “cease sending text message solicitations to the called party” (with the notable exception of a confirmation text).

After responding “STOP,” the consumer may then bring an action under the FTSA only if “the telephone solicitor continues to send text messages to the called party 15 days after the called party provided notice.”

Businesses with good opt-out procedures and compliance mechanisms for honoring “STOP” text message requests will be able to avoid wrong-number and similar other mistake cases.

Businesses should note that the 15-day compliance rule in the FTSA for text message opt-outs does not apply to telephone calls (only text messages) and also differs from the TCPA’s grace period, which provides that callers have in place a procedure for honoring do-not-call requests “within a reasonable time from the date such request is made,” not to exceed 30 days. 47 C.F.R. 64.1200(d)(3).

The FTSA is still more restrictive than the TCPA

Despite these business-friendly changes, the FTSA is still restrictive. The amendment did not alter the area-code presumption capturing calls to Florida area codes regardless of the individual’s location or actual residence. The definition of “automated system” also still encompasses devices that select and dial telephone numbers by automated means, not necessarily just “random or sequential number generator[s].”

Callers operating marketing campaigns in Florida should continue to rely on prior express written consent when possible and implement procedures to ensure compliance with the procedures of the FTSA to mitigate the risk of potential litigation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

© Mondaq Ltd, 2023, Mr. Brooks Brown, Goodwin Procter LLP, Boston, MA


Analysis: U.S. Needs More than 4M Homes

Buyer demand remains high, in part, because so many young adults lived with parents during the pandemic. And due to rising prices, low-income families suffer most.

WASHINGTON – Americans seeking to move out on their own outnumbered available housing by almost two to one in 2021, according to a new report. There were roughly 8 million individuals or families who lived in another person’s home in 2021 and just 3.7 million homes for rent or sale, Zillow revealed Friday, leaving a deficit of 4.3 million homes.

“The U.S. housing market is like a high-stakes version of the game musical chairs,” Orphe Divounguy, senior economist at Zillow, said in a news release. “There are simply not enough homes for millions of people. Unless we address the shortage of smaller, more-affordable, starter-type homes, we risk leaving families without a seat – and it will only get worse over time,” he added.

Zillow’s analysis notes that the crisis is hitting low-income families the hardest with 68% in this category sharing spaces. And the housing gap was greatest in some of the most expensive coastal cities.

Pandemic price surge put housing out of reach

Housing affordability took a major hit during the pandemic as short supply met increasing demand. During the pandemic, both rents and sale prices soared. In the last year, the typical rent rate rose by close to 5% – up to $2,048 per month – while the value of a typical home jumped to nearly $347,000, Zillow data showed.

On the purchase side, high mortgage rates driven by the Federal Reserve’s ongoing effort to cool inflation have only worsened affordability for would-be buyers.

Currently, the 30-year fixed rate mortgage is 6.67%, according to Freddie Mac data.

“Potential homebuyers have been watching rates closely and are waiting to come off the sidelines. However, inventory challenges persist as the number of existing homes for sale remains very low,” Freddie Mac Chief Economist Sam Khater said in a statement.

“Though, a recent rebound in single-family housing starts is an encouraging development that will hopefully extend through the summer,” he added.

Construction rebound could help repair market

New construction surged by 21.7% on an unadjusted basis in May, beating economists’ expectations of a small decline.

Housing starts jumped to an annual rate of 1.63 million units last month, up from 1.34 million in April, according to Census Bureau data released Tuesday. Single-family and multifamily construction experienced monthly increases.

Single-family starts jumped by 18.5% over revised April figures to a rate of 997,000 units while starts for buildings with five or more units was 624,000.

© 2023 WCBD, Nexstar Broadcasting, Inc. All rights reserved.


Court: Meta Suable for Ad-Tool Discrimination

Meta (Facebook) gave RE agents the ability to steer ads in ways that violate the Fair Housing Act, but “the users did it” doesn’t fully protect Meta from lawsuits.

WASHINGTON – Facebook can be sued for allegedly discriminating on the basis of race and sex in housing advertisements, in violation of civil-rights laws, the U.S. Court of Appeals for the Ninth Circuit ruled on Friday.

The Ninth Circuit ruled in the case Rosemarie Vargas, et al v. Facebook, Inc. that a lower district court had erred by holding that Facebook is immune from liability pursuant to Section 230 of the Communications Act, which generally indemnifies interactive websites from liability for third-party content.

Facebook created an advertising platform that allowed companies to target advertisements to specific categories of users. Plaintiff Vargas claims that Facebook had excluded her based on her ethnicity from seeing certain real-estate ads. The Ninth Circuit held that she sufficiently alleged that Facebook’s conduct injured her by denying her equal treatment.

The Ninth Circuit’s decision aligns with the arguments made by Free Press, the American Civil Liberties Union, the Lawyers’ Committee for Civil Rights Under Law and the National Fair Housing Alliance in an amicus brief. The groups argued that Facebook’s conduct was discriminatory and exacerbated the persisting effects of historic discrimination. All Rise Trial and Appellate served as outside counsel to the organizations for the filing.

The Ninth Circuit’s panel of judges stated that the plaintiff’s allegations in the lawsuit, if proven true, could show that Facebook with its audience-selection tool was a “co-developer” of the discriminatory ads, and wasn’t merely hosting information provided by a third party.

“Discrimination in advertisements for housing, jobs, and other key aspects of American life has a long history, as do civil rights laws curtailing it,” the groups wrote in their amicus brief. “That such discrimination happens on the internet does not make Facebook’s practices different in kind from discriminatory offline conduct that has been found to violate civil rights laws.”

The brief argued that these laws have long proscribed discriminatory advertising that makes it harder for people of color to access economic opportunities.

“When Facebook uses race and other protected characteristics to exclude users from ads for economic opportunities, it is engaging in online segregation,” says David Brody, managing attorney of the Digital Justice Initiative at the Lawyers’ Committee for Civil Rights Under Law. “Allowing this conduct to continue will open the door for online commerce in this generation to mirror the discrimination and redlining of earlier generations.”

Source: The Free Press

© 2023 Florida Realtors®


Another Perk of Homeownership? Lower Inflation

While “shelter costs” make up 25% of the Consumer Price Index, the calculation only looks at rising rents. SMR calls that “a major flaw” and developed its own index.

HACKETTSTOWN, N.J. – SMR Research Corp. says there’s “a major flaw in the government’s Consumer Price Index (CPI)” that its new Homeowners Cost of Living (HCOL) report hopes to correct.

SMR’s index found a 3.21% increase in May, saying that compares to the CPI’s “assumed” annual increase of 8.0% in homeowner costs.

Some 75% of the CPI is comprised of actual measurements of cost for gasoline, food, and hundreds of other items, while the other 25% comes from homeowner shelter costs – but the Bureau of Labor Statistics (BLS) doesn’t actually measure these, SMR says. It computes inflation for renters and then assumes that homeowners have the same inflation rate. BLS calls this “Owner’s Equivalent Rent.”

BLS economists view mortgage and property tax payments as investments in an asset (the house), rather than spending. Assigning renter costs to homeowners “is like saying that if all dogs were cats, they’d stop barking,” SMR President Jim Kasprzak quipped. “They would, but dogs are not cats, and homeowners are not renters.”

While renters see the direct result of inflation when they renew contracts, 37% of homeowners own their homes debt-free – and most others with mortgages have 30-year or 15-year fixed-rate loans, where the payments stay the same for years, regardless of that year’s inflation numbers.

“Using real data on median homeowner mortgage and property tax monthly costs, the overall U.S. rate of inflation in May would be 2.78% – not the 4.0% currently shown in the CPI published on June 13,” Kasprzak says. “We’re much closer to solving the national inflation problem than some people think.”

© 2023 Florida Realtors®


Fed: Expect at Least One More Rate Hike

On Thur., Fed Chair Jerome Powell told Congress that “inflation pressures continue to run high” and “nearly all” Fed policymakers expect at least one more rate hike.

WASHINGTON (AP) – Chair Jerome Powell reiterated Thursday that the Federal Reserve will likely raise interest rates at least once more this year because of persistently high inflation in the economy’s service sector and the surprisingly tight job market.

Speaking to a Senate committee, Powell noted that “inflation has moderated somewhat since the middle of last year.” Still, the Fed chair stressed, “inflation pressures continue to run high.”

Powell was testifying to the Senate Banking Committee on the second day of semi-annual testimony to Congress. On Wednesday, he addressed the House Financial Services Committee and sounded a similar message that some further rate hikes are likely coming this year.

On Thursday, Powell noted that “nearly all” Fed policymakers “expect that it will be appropriate to raise interest rates somewhat further by the end of the year.”

In May, consumer prices were up 4% in May compared with 12 months earlier, down from a year-over-year peak of 9.1% in June 2022, but still double the Fed’s 2% inflation target.

The central bank has raised its benchmark rate aggressively since March 2022 in a push to slow the economy and reduce inflationary pressure. At their meeting last week, the Fed’s policymakers kept their key rate unchanged after 10 straight hikes, buying time to see what impact higher rates are having on the economy. But the rate increases may resume after a pause: Twelve of 18 Fed policymakers last week indicated that they envision at least two more rate hikes this year.

Rising rates have slammed the U.S. housing market, with its dependence on mortgage rates, which have risen substantially since the Fed unleashed its anti-inflation campaign.

But higher rates take longer to have an effect on business and prices in services industries, like hotels, bars and restaurants, where labor costs weigh heavily. And the job market has been remarkably resilient in the face of increased borrowing costs. Employers have added a healthy average of 314,000 jobs a month so far this year. And at 3.7%, the U.S. unemployment rate is still near a half century low.

“Labor demand still substantially exceeds the supply of available workers,” Powell said.

The Fed has expressed concern that an overly tight labor market puts upward pressure on wages – and on inflation.

In his remarks to the Banking Committee, Powell noted signs that the labor market is cooling though still hot by historic standards. Monthly job openings are down from a record to 12 million in March 2022 to 10.1 million in April this year. The Fed’s policymakers hope to see the job market slow relatively painlessly, with employers advertising fewer openings rather than cutting many jobs.

Workers, as a whole, may finally be getting some relief from higher prices. Hourly wages rose faster than inflation last month for the first time since March 2021, according to the Labor Department.

Inflation wasn’t the only focus of the senators Powell addressed on Thursday. The committee’s Republicans also criticized the Fed for considering raising the level of capital that banks must hold as a buffer against losses, in response to three big bank failures this year.

The senators noted that banks have sharply increased their capital buffers since the financial crisis of 15 years ago.

“How much is too much?” asked Sen. Tim Scott of South Carolina, the committee’s top Republican. “The higher the capital standards, the less capital for the private sector.”

Powell noted that nothing has been finalized and suggested that any higher capital standards would likely apply only to large banks – those with assets above $100 billion.

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


Realtor Hero Helped Community People Post-Ian

BOCA GRANDE, Fla. – Anyone who has ever been in a disaster situation has the wherewithal to know what to do when it is safe to check out their surroundings. Many people were in that boat on September 28, 2022, the day Hurricane Ian winds and rain forced their way through every nook, cranny and crack in the buildings of Southwest Florida and into our collective memories.

There were many memories made during that time – some good and some bad – but the ones that stand out in many people’s minds are of the people who helped so much.

This tale is about just two of those people who made such a difference in so many lives. They are real estate agents Kevin Hyde and his wife Nancy, who are known to many on the island.

When the Hydes left for Georgia just prior to Hurricane Ian hitting our area, they had no idea what they would find when they returned. They had given the use of their house as a shelter to two of their friends who live in a very low-lying area. Once they found that their home was damaged but still standing, they started setting up their camper, which they had taken to Georgia, as their living quarters.

There was no pondering over what to do next, because Kevin and Nancy take care of everyone in their lives without a second thought.

They started with their neighbor, setting up a generator between their houses to run refrigerators and fans. Then they got in the truck and went from house to house on the island, checking on their existing and past clients.

“We secured homes and basically did what we could to help,” Kevin said. “However, it quickly became clear that the most desperate need was not on island but off, so that’s where we turned our focus once our initial work was done.”

For the next several months their day started at daybreak, beginning with a drive up to Dearborn Street & 776, where there was a reliable cell signal. From there they were able to communicate with fellow trustees at the Florida Realtors Disaster Relief Fund, of which Kevin is chairman, to get funds out to as many people as they could as quickly as they could.

“We distributed roughly $1.5 million to families in need,” he recalled. “I also communicated with Mormon Helping Hands and Samaritan’s Purse, international aid organizations that came to the area to assist. My role with them was to coordinate not only their setup and local resources, but to bring them what I knew to be those most in need as applications for aid came in. From there, I would head out into the community to deliver essentials to those most in need, which was a challenge. Everywhere I looked there were people in desperate need of supplies and a helping hand.”

While Kevin did lead a number of crews of volunteers, mostly from Florida Realtors working on behalf of Mormon Helping hands, the volunteer pool eventually dried up. He then joined forces with Samaritan’s Purse. By this time he no longer had a crew of his own and was suffering from a back injury sustained in a car accident prior to Hurricane Ian.

As he put it, “Running solo was not possible.”

It was hard for Kevin to watch the crews do the hard work of disaster cleanup. Everything from muck out to drywall repair, roof tarping and tree removal was necessary, but Kevin realized he was not of much help in those fields at that time. He turned to doing what he does best – ministering to the people who had lost so much, in so many other ways.

“I became the guy who, with a truck-load of supplies and tools, would get out there and find those who had fallen through the cracks and provide them with their immediate needs,” he said. “We worked with not only the Mormon groups and Samaritan’s Purse, but also FEMA and other groups to get supplies and start paperwork.”

Through his network at Florida Realtors, Kevin got several truckloads of supplies and tools for distribution. He made sure that a load was set aside for Little Gasparilla Island that included generators, chainsaws, fuel, food, water and other essentials. They purchased a load of “Bagster” dumpster bags for Little Gasparilla as well, to aid them in getting the debris off the island to the county site for collection.

“I did my best to focus on island workers in need, so they could return to work and their lives as quickly as possible,” Kevin said. “Every few days I returned to the island to check on my listings that were badly damaged and provide owners with updates.”

This is when Kevin and Nancy were able to start to take stock of what was really going on in their professional life.

“It never occurred to Nancy or myself what impact this hurricane would have on our business,” Kevin said. “We immediately went to the aid of others, while many in our field stayed focused on their business. I’m quite proud to say that as a company, Parsley-Baldwin was right there with us, helping those most in need. Most of our fellow agents did the same. In doing that, though, we fell way behind in marketing and getting listings to sell. Since Nancy and I work together, she was able to assist with some listings and to facilitate communications.

“My listings remain to this day unrestored, but the work is finally underway, so there is relief in sight.”

While they have had a tough year in business due to making the choice to assist others, Nancy and Kevin agree that they would not change a thing.

“We both have servants’ hearts, and serving others in need is what brings us personal fulfillment,” he said. “That said, we sure hope we don’t have a big disaster this year … we have a bit of catching up to do.”

According to many, the real estate market both on and off island remains challenging. A few agents, Realtors and brokers have had some success since last September; it seems to be less about a good market and more about the type of listings being sold.

The good news is that undamaged properties that are listed for sale, or those minimally damaged, quite often have several offers and have seen big numbers at closing.

Homes that have sustained damage, on the other hand, aren’t selling as well. Construction and restoration crews are trying to catch up, but many people don’t even have insurance money yet to pay those crews. Right now, it seems that homes that were not damaged or have been completely restored are fetching above the asking price.

In short, this will be a real estate market to remember for those who have made a career in that business

© Copyright 2023 The Boca Beacon. All rights reserved.


FHA Foreclosure Plan Moves Money to Backend

It doesn’t make sense to refinance at-risk FHA loans due to higher interest rates, so the latest plan simply offers a reduction and extends the mortgage payoff date.

WASHINGTON – On May 31, the Federal Housing Administration (FHA) proposed a new plan to help mortgage borrowers behind on payments to get back on track. It works by temporarily reducing their monthly bills.

Under the plan, FHA essentially pays part of the homeowner’s monthly mortgage bill using its insurance fund. It then structures that repayment as a second loan that’s due after the first mortgage loan is paid off.

FHA wants to offer it to people who otherwise would not benefit from a traditional modification since, in most cases, that would involve trading in their lower rate for a higher one.

“We see a lot of people having to get modifications that either don’t reduce their payment or in some cases raise their payment,” says Julia Gordon, the assistant secretary for housing at the U.S. Department of Housing and Urban Development. “That’s not going to have the success rate over time that we’d like to see.”

For a period of up to five years per the plan, the monthly principal and interest payment may drop as much as 25%, and the total FHA supplement could be as much as 30% of the loan balance. FHA officials say the government would get repaid at the end of the loan term, and that helping borrowers get back on track under this system will cost less than following through with a foreclosure.

The proposal is currently open for public feedback. It will go into effect – perhaps under a modified version – sometime after the comment period ends.

Source: Wall Street Journal (05/31/23) Eisen, Ben

© Copyright 2023 INFORMATION INC., Bethesda, MD (301) 215-4688


Live Local Act Helps Affordable Housing Developers

TALLAHASSEE, Fla. – On March 29, 2023, Governor Ron DeSantis signed Florida Senate Bill 102, called the “Live Local Act” (the Act), which becomes effective on July 1, 2023. While the Act includes incentives that may also appeal to market rate developers, such as flexibility to use commercially zoned property to develop multifamily housing if a minority percentage of the units are used for affordable and/or workforce housing, there are significant additional benefits to those who develop what is traditionally considered affordable housing – residential units affordable to those earning 80% of area median income or lower.

Tax exemption for building materials used in construction of affordable housing units

The Act creates a new tax exemption applicable to sales that occur on or after July 1, 2023, of building materials for use within an affordable housing development that is restricted under a recorded land use restriction agreement with the Florida Housing Finance Corporation (Florida Housing).

Building materials are those that:

  1. become a component part of eligible residential units and are part of improvements to the real property that did not previously exist or
  2. are used in the construction of a new improvement where an old improvement was removed.

In other words, the tax exemption excludes building materials used for renovation, restoration, rehabilitation, modification, alteration, or expansion of existing buildings. The term includes appliances but excludes plants, landscaping, fencing, and hardscaping. The units in the affordable housing development are those for extremely-low-income (30% of area median income (AMI)), very-low-income (50% of AMI), or low-income (80% of AMI) individuals or families as specified in Fla. Stats. § 420.0004.

A refund may not be granted unless the amount to be refunded exceeds $500, and a refund may not exceed the lesser of $5,000 or 97.5% of the Florida sales or use tax paid on the cost of building materials. Only one exemption through a refund of previously paid taxes may be claimed for any eligible residential unit.

Unless the building materials are paid for from the funds of a community development block grant (CDBG), the State Housing Initiatives Partnership Program (SHIP), or a similar grant or loan program, this exemption inures to the owner at the time an eligible residential unit is substantially completed (meaning that that the improvement can be used for the purpose for which it was constructed), but only through a refund of previously paid taxes.

A refund is obtained by filing an application with the Department of Revenue (i) within 6 months after the eligible residential unit is deemed to be substantially completed by the local building code inspector or (ii) by November 1 after the improved property is first subject to assessment. This exemption inures to a municipality, county, other governmental unit or agency, or nonprofit community-based organization through a refund of previously paid taxes if the building materials are paid for from the funds of CDBG, SHIP or a similar grant or loan program.

Affordable housing property exemption for land leased for 99 years from nonprofit for affordable housing

While portions of property used to provide affordable housing to eligible persons owned entirely by a qualified nonprofit entity are currently exempt from property taxation to the extent authorized under Fla. Stats. § 196.196, effective January 1, 2024, land that is owned entirely by a qualified nonprofit entity and is leased for a minimum of 99 years for the purpose of, and is predominantly used for, providing housing to natural persons or families meeting income limits specified in Fla. Stats. § 420.0004 is also exempt from property taxation.

Land is predominantly used for qualifying purposes if the square footage of the improvements on the land used to provide qualifying housing is greater than 50% of the square footage of all improvements on the land. This first applies to the 2024 tax roll and is repealed on December 31, 2059.

Funding: Up to $150 million/fiscal year to state apartment incentive loan program (SAIL) from documentary stamp taxes

All documentary stamp taxes remaining after deduction of costs and the required distributions to the Land Acquisition Trust Fund as set forth in Fla. Stats. § 201.15 shall be distributed as follows: The lesser of 8% of the remainder or $150 million in each fiscal year shall be paid into the State Treasury to the credit of the State Housing Trust Fund and shall be expended pursuant to the newly created Fla. Stats. §. 420.50871. This expires on July 1, 2033.

Fla. Stats. §. 420.50871 provides that allocation of increased revenues derived from amendments to Fla. Stats. § 201.15 made by this Act must be used annually for projects under the State Apartment Incentive Loan Program (SAIL) under Fla. Stats. §. 420.5087.

Notwithstanding the income limitations in Fla. Stats. § 420.5087(2), projects are intended to provide housing that is affordable, meaning that monthly rents or monthly mortgage payments including taxes, insurance, and utilities do not exceed 30% of that amount which represents the percentage of the median adjusted gross annual income for the following households (all as specifically defined in Fla. Stats § 420.0004):

  • Extremely-low-income persons (30%)
  • Very-low-income persons (50%)
  • Low-income persons (80%)
  • Moderate-income persons (120%)

Beginning in the 2023-2024 fiscal year and annually for 10 years thereafter, Florida Housing shall issue competitive requests for application for:

(1) 70% of the funds to be used for the following affordable housing project purposes:

  1. Building a new affordable housing development, relocating the tenants of the existing development to the new development, and then demolishing the existing development for reconstruction of an affordable housing development with more overall and affordable units.
  2. Addressing urban infill, including conversions of vacant, dilapidated, or functionally obsolete buildings or the use of underused commercial property.
  3. Providing for mixed use of the location, incorporating nonresidential uses, such as retail, office, institutional, or other appropriate commercial or nonresidential uses.
  4. Providing housing near military installations, with preference given to projects that incorporate critical services for servicemembers, their families, and veterans.

(2) 30% of the funds to be used for the following affordable housing project purposes:

  1. Using or leasing public lands for affordable housing purposes.
  2. Addressing the needs of young adults who age out of the foster care system.
  3. Meeting the needs of elderly persons.
  4. Providing housing to meet the needs in areas of rural opportunity, designated pursuant to Fla. Stats. § 288.0656.

Note that Florida Housing may use up to $25 million of eligible contributions to provide loans for the construction of large-scale projects of significant regional impact. Such projects must include a substantial civic, educational, or healthcare use and may include commercial use, any of which must be incorporated within or contiguous to the project property.

Such a loan must be made, except as otherwise provided in this subsection, in accordance with the practices and policies of the SAIL Program. Such a loan is subject to the competitive application process and may not exceed 25% of the total project cost. Florida Housing must find that the loan provides a unique opportunity for investment alongside local government participation that would enable the creation of a significant amount of affordable housing.

Land use mechanisms to increase affordable housing, including inclusionary zoning

The Act further paves the way for municipalities, counties, or other entities of local government to implement additional beneficial measures. Local government may adopt and maintain in effect any law, ordinance, rule, or other measure which is adopted for the purposes of increasing the supply of affordable housing using land use mechanisms such as inclusionary housing ordinances.


The Live Local Act covers many incentives and appropriations in great detail. This advisory focuses primarily on a high-level summary of benefits that may appeal to developers that traditionally develop affordable housing.

Buchanan’s multi-disciplinary team of attorneys and government relations professionals maintain regular communication with lawmakers at the state and federal level, and leaders from across the industry to ensure our clients are in the loop on the latest trends and legislation to help developers evaluate Florida’s affordable housing process.

© Mondaq Ltd, 2023, Ms. Michelle Yarbrough Korb, Buchanan Ingersoll & Rooney PC, Pittsburgh, Pa.


NAR ‘Actively Involved’ in Condo Finance Rules

After the Surfside tragedy, FHFA issued temporary condo-lending rules. Those rules will change, and NAR is part of the discussions – but it can’t legally talk about it.

WASHINGTON – The National Association of Realtors® (NAR) says it’s actively involved in group discussions on condominium-financing rules with the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac (the GSEs), but can’t talk about it due to a non-disclosure agreement (NDA).

The discussion relates to the condominium collapse tragedy in Surfside, Florida. Following that, FHFA – which has oversight of Fannie Mae and Freddie Mac – developed temporary guidance on condo purchase requirements.

It’s now considering more permanent rules, and the National Association of Realtors® (NAR) says it’s been part of those discussions since the beginning in 2022 under the NDA.

However, NAR along with two other housing groups – Community Associations Institute (CAI)  and Community Home Lenders of America (CHLA) – want more transparency in the process. This week, they wrote a letter to FHFA Director Sandra L. Thompson, Fannie Mae CEO Priscilla Almodovar and Freddie Mac CEO Michael J. DeVito, requesting that transparency.

“Our organizations are very concerned that the GSE condominium and housing cooperative lending requirements will restrict access to housing for many Americans, while making it very difficult for current owners to build wealth and maintain their property values,” the group says in the letter.

It notes the increased attention to condo building maintenance issues after Surfside, but “restricting access to lending will plummet property values leaving less money and incentive for homeowners to invest in maintenance, especially in urban opportunity zones throughout the U.S.”

The group calls it a “potential housing crisis” and hopes the final rule will “narrow the focus of these requirements to the buildings that are at risk based on data.”

The group specifically asks that:

• Any changes to (Fannie, Freddie) condo project or loan approval requirements should be subject to a public comment period of at least 60 days prior to adoption.

• Fannie Mae should be required to make public their lists of condo projects ineligible for loan purchase, along with guidance as to the actions necessary to make them eligible.

“We stand ready to work with GSEs and FHFA to develop and implement policy to keep Americans safe in their buildings while having appropriate access to lending for their homes,” the group concludes in the letter.

© 2023 Florida Realtors®


Airbnb Investing? It Comes with Risks and Benefits

Airbnb ownership can be a good source of passive income flexibility for personal use. The downside: Startup costs, irregular income and an occasional unruly guest.

NEW YORK – Owning a hotel or a lodge might be a bridge for investors in this economy, hence investing in Airbnb is most feasible. Airbnb investing is substantially different from traditional real estate investing.

Depending on the money at hand to invest it can be a very lucrative investment considering adequate research and planning is done. Like any other investment, understanding the risks and benefits of Airbnb investing can help you decide if it’s the right form of investment for you.

Benefits of Airbnb investment

1. Great source of passive income

With the enhanced popularity of Airbnb and other vacation rental platforms there is an opportunity for investors to generate a stream of passive income. All the host (investor) needs to do primarily is to appoint a caretaker to take care of the premises while the host handles bookings and payments.

Due to its nature, it can be great way of diversifying an investment portfolio, enabling the investor to focus on more hands-on investments.

2. Easy to maintain

Surprisingly, there is reduced work required to sustain the property than traditional rental properties. Guests when making bookings are charged a cleaning fee, hence the property is cleaned routinely. Also, hosts can use reviews from the guests after a stay to see areas that need advancement.

Lastly, the grounds and surrounding areas can be an obligation of the caretaker.

3. Flexibility

In resort areas, Airbnbs can be more profitable during holidays, and you can rent your property only in that time period if you want. Lastly when managing Airbnbs, you can alter rental prices according to your valuation of the property or when improvements are made.

4. Easy to find guests

As guests write positive reviews and rate their stay as “great,” it lures more guests to experience the same for themselves.

The app also screens guests and recommends the best stays according to the type of guests searching for the rental. And because it’s a short term rental, you don’t necessarily sign legally binding documents. Guests only need to agree to terms and conditions.

Risks of Airbnb investment

1. Higher start-up costs

John Wanamaker once said, “When customer enters my store, forget me. He is king.” In this case, we refer to customers as our Airbnb guests. To make the property more attractive, investors need to spend money upfront and to provide a best experience. This can be in the form of pavements, refurbishment, furniture, etc.

2. Irregular income

Initially, you need to book off-days for repairs and maintenance ; secondly, the hospitality industry is seasonal, which will trigger a ripple effect as some months’ income will be less than others.

Also, while you can yield a high profit with short term rentals, your cash flow depends on how many days are booked per month.

3. Risk of theft or damage

Perhaps the biggest risk of Airbnb investment is theft and damage. With a high turnover of guests, the host (investor) could lose track of keys and can’t control guests behavior. Property can be stolen, or guests can damage property and get away without paying for the damages. Since many Airbnb hosts live elsewhere and depend on caretakers to manage the property, this is largely out of their control.

4. Guest liability

As a vacation rental owner, a significant concern is guest injury or risks of an incident happening on the premise. Even if an investor is not on the premise at the time of the incident, they can be still be held legally responsible. The very thing that attracts guests, like a swimming pool, might end up in paying medical bills, legal fees, etc.

© Business Weekly


Jacksonville Non-Profit Wins HUD Award

The Community Foundation for Northeast Florida won the Award for Public-Philanthropic Partnerships. The nonprofit pairs private grants with groups in need.

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) and the Council on Foundations (COF) announced the winners of the 2023 Secretary’s Award for Public-Philanthropic Partnerships.

Of the 10 recipients, one – The Community Foundation for Northeast Florida – serves the Jacksonville-area counties of Duval, St. Johns, Nassau, Baker, Clay and Putnam. The Community Foundation partners with individuals, families, organizations and businesses that want their philanthropic gifts to make a difference in their communities.

HUD says its Secretary’s Award for Public-Philanthropic Partnerships recognizes excellence in partnerships that “have transformed the relationship between the public and philanthropic sectors, and also led to measurable benefits in housing and community development.”

The benefits can vary, but could include increased economic opportunity, health, safety, education, workforce development, disaster resilience, inclusivity and cultural opportunities, and/or housing access for low- and moderate-income families.

The 2023 winners were honored at an award ceremony in Denver, Colorado, and presented by Solomon Greene, HUD’s principal deputy assistant secretary for policy development and research, and Kathleen Enright, COF’s president and CEO.

“This year’s awardees represent the heartbeat of our great nation,” says HUD Secretary Marcia L. Fudge. “Every day, they respond to the call of some of our most vulnerable neighbors, advocate on their behalf, and confront some of our most pressing challenges.”

“We’re proud to recognize these grant-makers and their public-sector collaborators who together create innovative, place-based initiatives with lasting impact,” said Council on Foundations President and CEO Kathleen Enright. “They are all incredible testaments to what it means to truly love where you live.”

This year’s winners include:

  1. The Community Foundation for Northeast Florida
  2. Chicago Community Trust
  3. Fairfield County’s Community Foundation
  4. The Ralph M. Parsons Foundation
  5. Community Foundation Boulder County
  6. Rasmuson Foundation
  7. Excellerate Foundation
  8. Rose Community Foundation
  9. Greater Milwaukee Foundation

© 2023 Florida Realtors®


Nonprofit’s Goal: 4M Latino Homeowners by 2030

A nonprofit organization, UnidosUS, wants to help Hispanic families build generational wealth through homeownership. Wells Fargo kicked off a $100M funding effort.

WASHINGTON – UnidosUS, a nonprofit, nonpartisan Hispanic civil rights organization, has launched HOME (Home Ownership Means Equity), a new initiative that seeks to push systemic change and help create four million new Latino homeowners by 2030.

Wells Fargo is the first anchor funder of the HOME initiative. Of the $25 million in grant funding, $10 million will support the development of the HOME initiative, matching a $10 million investment from UnidosUS and kick-starting a $100 million fundraising effort.

“Homeownership has long provided the most effective pathway for families to build generational wealth in America,” says Janet Murguía, president and CEO of UnidosUS. “While Latinos continue to face barriers in becoming homeowners, they also have the greatest opportunity for homeownership growth in the U.S.”

Murguía says HOME has a comprehensive strategy to “shape needed policy reforms, while providing tools and resources Latinos need to successfully navigate the homebuying process.”

She says the program isn’t just smart policy – it will “pay economic dividends to neighborhoods, communities and our country.”

“We need to make homeownership more accessible, especially in historically marginalized communities,” says Kristy Fercho, head of diverse segments, representation and inclusion at Wells Fargo. “We will continue to expand our programs to reach more customers in underserved communities by leveraging our strong partnerships with UnidosUS and other non-profit organizations to break down the systemic barriers that make homeownership more difficult to attain.”

According to Janneke Ratcliffe, vice president of Urban Institute’s Housing Finance Policy Center, “Latino households are poised to drive most net new homeownership in the United States through at least 2040.” Ratcliffe says their data and analysis will “support the development of evidence-based practices, track progress in meaningful ways and work to bridge knowledge gaps to move toward a more equitable state of homeownership in America.”

The UnidosUS HOME agenda

  • Create credit access by modernizing lending rules, supporting ITIN holders and self-employed borrowers, diversifying language access and enhancing credit access
  • Increase housing supply – supporting increased density through zoning reforms, leveraging federal tax policy to boost supply and supporting the construction labor force
  • Preserve homeownership by making home renovation loans more accessible and supporting policies that ease the inter-generational transfer of wealth
  • Help select UnidosUS’s community-based affiliate organizations provide consumer education and housing counseling
  • Bolster Latino leadership representation

The HOME initiative’s first focus cities include Chicago, Illinois; Phoenix, Arizona; Stockton, California; Orlando, Florida; and Houston, Texas – communities with large Latino populations and tremendous housing opportunities for prospective Latino homebuyers and builders. The initiative will then continue to expand into other states.

© 2023 Florida Realtors®


Stop Using These Top Real Estate Passwords

Some passwords are classically bad, like “123456” and “password.” But NordPass put together a list by industry, and some agents may not be as creative as they think.

CHICAGO – If you see your password on this list, change it now.

A strong password is the backbone to data security. Yet a new study finds that real estate professionals are relying on common, easy-to-guess passwords, phrases and formats that could put their information and that of their clients at greater risk.

Recent research from password management firm NordPass reveals the most common passwords used among workers in 20 industries, including real estate. The study found that real estate pros most often incorporate their full company name, the company’s email domain or part of the company’s name into their passwords.

“These types of passwords are both poor and dangerous to use,” says NordPass CEO Jonas Karklys. “When breaking into company accounts, hackers try all the password combinations referencing a company because they are aware of how common they are. Employees often avoid creating complicated passwords, especially for shared accounts. Therefore, they end up choosing something as basic as the company’s name.”

The NordPass study also found that workers in the real estate sector rely on common passwords like “password,” “123456” and “default.” The study found the following passwords most commonly used in real estate:

  • Part of the company’s name
  • Company’s email domain
  • Part of the company’s name + “1”
  • Password
  • Indiana1
  • Aaron431
  • 123456
  • Company name
  • Default

Though not in the top 10, the study also found that real estate pros often picked the words “fashion” and “sexy4sho” for their passwords.

What makes a strong password?

NordPass says companies need to strengthen their passwords to avoid risk. Passwords should consist of random combinations of at least 20 upper- and lower-case letters, numbers and special characters. Also, researchers urge users to enable multifactor authentication for their accounts, which, besides a password login, also sends an SMS or email code to verify security. Password managers can be used to store all passwords in one place.

Many tech experts believe passwords will ultimately fade away since they have become so vulnerable to cybersecurity breaches. For example, businesses like Google, Microsoft, Apple and PayPal have adopted passkey technology, offering a login without the use of a password. Authentication instead relies on biometrics – such as a fingerprint or facial recognition – or a PIN code.

Karklys believes other online companies will follow suit. “The world desperately needs to switch to new online authentication solutions,” Karklys says.

Until then, real estate pros must make extra efforts to keep data secure.

Source: National Association of Realtors® (NAR)

© 2023 Florida Realtors®


Most Common Types Of Small Biz Financing?

In movies, hopeful business owners make their case before a banker and hope for a loan. But there are more options, such as SBA loans or a line of credit.

NEW YORK – For the first time since the coronavirus pandemic began, small businesses in 2022 reported rising revenues and increased employment over the previous 12 months. That’s according to the Federal Reserve’s 2023 Small Business Credit Survey. The survey also found that the share of firms operating profitably rose substantially.

Among the employers surveyed, 40% applied for financing in the year leading up to fall 2022. That was up significantly from the year prior, during which only 25% said they applied for financing. The current level more closely resembles pre-pandemic application levels. Nearly 4 in 5 business financing applications were at least partially completed, but only about half were fully approved, the survey shows.

During the pandemic, as companies struggled, many did not qualify for traditional financing and turned instead to government recovery programs. At the time of the most recent survey, some recovery programs were still available, and 34% of employer firms had sought pandemic-related financial help during the previous 12 months. But as those pandemic-related programs wrapped up, the share of firms turning to traditional financing in the form of loans, lines of credit, or merchant cash advances rose once again.

Credibly used the Small Business Credit Survey to identify the most common sources of financing that small businesses apply for. The financing sources are ranked by the share of businesses that sought each type of funding. The findings include only small businesses that are employers.

5. Personal loan (tie)

  • Application rate: 7%
  • Share of applicants at least partially approved: 70%

Personal loans are now easier to get through so-called “peer-to-peer” lending, in which individuals or companies are matched online with lenders. The average annual percentage rate (or APR) for a two-year personal loan in May 2023 was 11.23%, according to the Federal Reserve. By comparison, the average interest rate for a credit card was about 19%. One major plus for personal loans: They can be used for almost any purpose.

5. Merchant cash advance (tie)

  • Application rate: 7%
  • Share of applicants at least partially approved: 90%

A merchant cash advance is an advance on future sales, in which the financing provider is buying those future revenues at a discount in return for quick cash now. If you’re the merchant, you will need to set aside a percentage of your credit card and debit transactions, sometimes with an additional fee. Among the benefits, less collateral is needed, credit scores are less important than for a traditional loan, and the financing provider can be flexible about remittances.

However, merchant cash advances are often less regulated, so the costs can be higher than a traditional loan, and a merchant who fails to satisfy the terms can get sued. They do not have interest rates like business loans; instead their cost of financing is offered with factor rates. Unlike an interest rate, factor rates are decimal figures set by financing providers; it is multiplied by the financing amount to calculate the total amount a merchant has to remit. Factor rates can vary widely, from 1.1 to 1.5, according to NerdWallet.

4. Auto or equipment loan

  • Application rate: 12%
  • Share of applicants at least partially approved: 87%

Equipment financing helps business owners pay for expensive investments in equipment, machinery, and vehicles that can make all the difference for companies trying to grow. Typically the equipment purchased will be used as collateral for the loan. Equipment financing companies offer such loans, as do banks and the Small Business Administration – with rates ranging from 4% to 30%, according to NerdWallet.

The cost of car loans is on the rise, with the average annual interest rate for a new car loan at 7% in March 2023, up from 4.5% a year earlier. Rates in the last months have been the highest since 2008. Monthly payments to finance new cars also are at an all-time high. In March, the average monthly payment reached $730, according to the automobile website Edmunds.

3. SBA loan or line of credit

  • Application rate: 23%
  • Share of applicants at least partially approved: 64%

Small Business Administration loans have no minimum loan amount, but its popular 7(a) loan is capped at $5 million. The federal backing offers access to low-rate bank financing, with different types of loans and lines of credit and varying eligibility requirements. By reducing the risk to lenders, the SBA makes it easier for small businesses to get needed funding. The most typical SBA loan is known as 7(a), with interest rates of about 7% to 9.5%.

One possible drawback is that it can take a few months to be approved. The SBA also makes direct low-interest loans, but only in the case of an officially declared disaster.

2. Business loan

  • Application rate: 34%
  • Share of applicants at least partially approved: 66%

A small business loan is intended for the many costs associated with running a business, from an immediate need to pay unexpected bills to more ambitious projects such as an expansion. Besides being available from the SBA, business loans can be obtained from community and commercial banks, online lenders, and from peer-to-peer lenders.

There are a number of different kinds, such as microloans for smaller loan amounts and faster repayment schedules or commercial real estate loans for buying property. One of the most common are term loans, which are usually repaid in fixed amounts plus interest (or with factor rates) and can be put to a variety of uses.

1. Business line of credit

  • Application rate: 43%
  • Share of applicants at least partially approved: 76%

A business line of credit provides an amount of credit that a business can draw on and receive as cash. Interest is paid on the amount borrowed, much like paying for a cash advance on a credit card. The advantage is a business can borrow as needed for an unexpected opportunity or an expense.

The cost varies with the lender and depends on credit scores, business revenue, and other criteria. Amounts available can range from $2,000 to $250,000, with rates from around 10% and up, according to Forbes.

© Copyright 2023 The Daily Tribune News, all rights reserved. This story originally appeared on Credibly and was produced and distributed in partnership with Stacker Studio. Data reporting by Paxtyn Merten, story editing by Jeff Inglis and copy editing by Tim Bruns.


A Good RE YouTube Blog Can Earn You Money

A quality video blog can earn its creator $5 to $10 for every 1,000 viewers – but popularity also opens the possibility for sponsors, affiliate marketing, etc.

NEW YORK – The earning potential of a real estate blog on YouTube is determined by audience size and demographics, content quality and consistency, which if harnessed effectively can yield substantial income.

Although YouTubers usually earn between $0.25 to $4 per 1,000 views per industry averages after YouTube takes its 45% cut, high-value niches like real estate can see earnings between $5 and $10 per 1,000 views. By that reckoning, a real estate blog with 100,000 views per video could potentially generate $500 to $2,500 or more.

Of vital importance is the fact that a blog’s earning potential is exponential. Once popular, it can tap into additional revenue streams through sponsorships, affiliate marketing and consultation services. Its appeal expands with its audience.

It can even unlock revenue opportunities outside of YouTube, like paid speaking engagements, partnerships and even personal real estate ventures.

Source: Realty Biz News (06/11/2023) Shepardson, Ben

© Copyright 2023 INFORMATION INC., Bethesda, MD (301) 215-4688