North Shore Massachusetts Flood

Dealing with the Aftermath


If you have experienced a flood, you can file your flood insurance claim by following these three steps:

STEP ONE:

After experiencing a flood, contact your agent or insurance company to file a claim. An adjuster should contact you within a few days of filing your claim. If you do not hear from an adjuster, you can contact your insurance agent or company again. Make sure you have the following information handy:

•The name of your insurance company

•Your policy number

•A telephone and/or email address where you can be reached at all times

STEP TWO:

Separate damaged from undamaged property. Your adjuster will need evidence of the damage to your home and possessions to prepare your repair estimate.

•Take photographs of all of the damaged property, including discarded objects, structural damage, and standing floodwater levels.

•Make a list of damaged or lost items and include their date of purchase, value, and receipts, if possible.
•Officials may require disposal of damaged items so, if possible, place flooded items outside of the home.

STEP THREE:

Your adjuster will provide you a Proof of Loss form for your official claim for damages. You'll need to file this claim with your insurance company within 60 days of the flood. This document substantiates the insurance claim and is required before the National Flood Insurance Program (NFIP) or insurance company can make payment.

You'll receive your claim payment after you and the insurer agree on the amount of damages and the insurer has your complete, accurate, and signed Proof of Loss form. If major catastrophic flooding occurs, it may take longer to process claims and make payments because of the sheer number of claims submitted.

Disaster Assistance: (800) 621-FEMA, TTY (800) 462-7585


http://www.floodsmart.gov/floodsmart/

August Bay State Foreclosure Deeds Reach Highest Level In 2011

Over the past year, foreclosures have fluctated, reaching new highs and lows. What's next for Massachusetts? Banker & Tradesman Managing Editor Cory S. Hopkins gives his take in this podcast. More than 900 foreclosures were completed in Massachusetts in August - the highest monthly level recorded so far this year, according to The Warren Group, publisher of Banker & Tradesman.


A total of 937 foreclosure deeds were recorded in August, marking the largest amount in any month in 2011. June recorded the second highest amount at 931. Year-over-year foreclosure deeds dropped more than 22 percent from 1,207 in August 2010. A total of 5,465 foreclosure deeds have been filed so far this year, a near 45 percent decrease compared to 9,887 deeds recorded during the same period last year.

"We're seeing completed foreclosures hover around the 1,000 mark - a sign that lenders are beginning to work through the backlog and finalize the foreclosure process," said Banker & Tradesman Managing Editor Cory S. Hopkins. "Foreclosures have been delayed by robo-signing and other documentation problems. This could certainly mean a glut of foreclosed homes will be pushed through the pipeline in coming months and years."

Year-over-year petitions were down in August, dropping to 1,397 - a near 53 percent decline from 2,961 in August 2010. This is the second consecutive month petitions have exceeded 1,000 - and the fourth month so far this year. A total of 8,253 foreclosure petitions have been initiated so far this year, down 56 percent from 18,606 petitions filed the same period last year.

The number of auction announcements tracked by The Warren Group also decreased in August. Auction announcements declined 36 percent to 1,266 from 1,988 in August 2010. From January through August, 11,373 auctions have been announced, a 44 percent decline from 20,456 auctions during the same period in 2010.

US Foreclosure risk on rise, analysts say

Top News

Wednesday, 24 August 2011 05:52

The Mortgage Bankers Association said yesterday that 8.4 percent of homeowners missed at least one mortgage payment in the April-June quarter.

That figure rose 0.12 percentage point from the January-March period.

In a normal market, the percentage of delinquent borrowers is about 1.1 percent, according to the trade group.

Delinquent mortgages have plummeted from a record high of more than 10 percent of residential mortgages a year ago.

But the decline is due partly to delays in foreclosure filings that are backlogged in state courts, including in Florida, New Jersey, Illinois, and New York.

The end of a state and federal investigation into faulty foreclosure paperwork will probably lead to more foreclosures later this year.

Analysts say the increase is especially worrisome because it is due mainly to high unemployment, which tends to raise the number of missed payments and foreclosures over time.

Once delayed foreclosures are restarted, the economy could suffer a hit.

“The current processing delays mean this will not happen quickly, underlining our view that both the housing market and the economy will remain weak for a few years,’’ said Paul Dales, senior US economist at Capital Economics.

Last Week in the News



Pending home sales, a forward-looking indicator based on signed contracts, fell 1.3% in July after a 2.4% increase in June. On a year-over-year basis, pending sales are up 14.4%.

The Standard & Poor's/Case-Shiller 20-city housing price index — on a non-seasonally adjusted basis — rose 1.1% in June after a 1% increase in May. On a year-over-year basis, prices fell 4.5% compared with June 2010.

The consumer confidence index fell to 44.5 in August from 59.5 in July. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending August 26 fell 9.6%. Refinancing applications decreased 12.2%. Purchase volume rose 0.9%.

Factory orders rose 2.4% in July to a seasonally adjusted $453.2 billion, following a revised 0.4% decrease in June. Excluding the volatile transportation sector, orders rose 0.9% in July.

The Institute for Supply Management reported that the monthly composite index of manufacturing activity fell to 50.6 in August after a reading of 50.9 in July. A reading above 50 signals expansion. It was the 25th straight month of expansion.

Total construction spending fell 1.3% to $789.5 billion in July, following an upwardly revised 1.6% gain in June. Economists had anticipated an increase of 0.1% in July.

Initial claims for unemployment benefits fell by 12,000 to 409,000 for the week ending August 27. Continuing claims for the week ending August 20 fell by 18,000 to 3.7 million. The monthly unemployment rate remained unchanged at 9.1% in August.

Upcoming on the economic calendar are reports on international trade on September 8 and wholesale trade on September 9.

Mario Grosser
Prospect Mortgage

New Oil Heating System Upgrade, Insurance Law and Asbestos Removal

8/26/2011


Homeowner Oil Heating System Upgrade and Insurance Law

Introduction

This fact sheet contains important information for those who heat their homes with oil. By September 30, 2011, you must upgrade your home heating system equipment to prevent leaks from tanks and pipes that connect to your furnace. By making a relatively small expenditure now, you can prevent a much greater expense in the future.

Massachusetts has a new law to address oil leaks from home heating systems (Chapter 453 of the Acts of 2008, as most recently amended in 2010). This law has two major provisions that require:


•the installation of either an oil safety valve or an oil supply line with protective sleeve on systems that do not currently have these devices; and

•insurance companies that write homeowner policies to offer coverage for leaks from heating systems that use oil.

Most homeowner policies do not currently include such coverage, leaving many to pay for costly cleanups out of their own pocket. Although it is mandatory that insurance companies make this coverage available by July 1, 2010 to homeowners whose systems are upgraded, the insurance is an optional purchase.

Who must take action?

Owners of 1- to 4-unit residences that are heated with oil must already have or install an oil safety valve or an oil supply line with a protective sleeve, as shown in the diagram above. Installation of these devices must be performed by a licensed oil burner technician. Technicians are employed by companies that deliver home heating oil or are self-employed. It is important to note that heating oil systems installed on or after January 1, 1990 most likely are already in compliance because state fire codes implemented these requirements on new installations at that time.

Who is exempt?

Homeowners are exempt from taking these leak prevention steps if:

•the oil burner is located above the oil storage tank and the entire oil supply line is connected to and above the top of the tank OR

•an oil safety valve or oil supply line with protective sleeve was installed on or after January 1, 1990, AND
•those changes are in compliance with the oil burning equipment regulations; a copy of the oil burner permit from the local fire department may be used to demonstrate compliance.

Why comply?

Not only is complying with the new law required, it makes good financial and environmental sense. Homeowners who take these preventive measures can avoid the disruption and expense that can be caused by heating oil leaks. A leak may result in exposure to petroleum vapors in your home. If the leak reaches the soil or groundwater beneath your house, then a cleanup must be performed to restore your property to state environmental standards. Leaks that affect another property or impact drinking water supply wells can complicate the cleanup and increase the expense. Each year, several hundred Massachusetts families experience some kind of leak.

What will an upgrade cost?

The typical cost of installing either an oil safety valve or oil supply line with a protective sleeve ranges from $150 - $350 (including labor, parts, and local permit fees).

What could it cost to cleanup a leak?

The cleanup cost for a "simple" leak can be as much as $15,000. In cases where the leak impacts the groundwater or is more extensive, the cleanup costs can reach $250,000 or more.

What kind of insurance is available?

To be eligible for the new insurance coverage, homeowners must ensure that their oil heating systems are in compliance with the new law. Homeowners who have been certified to be in compliance with (or exempt from) the leak prevention measures qualify to purchase insurance that:

•provides "first party coverage" of at least $50,000 for the cost of cleaning up a leak to soil, indoor air, or other environmental media from a home heating system at the residence itself and reimbursement for personal property damage, AND

•provides "third party coverage" of at least $200,000 for the cost of dealing with conditions on and off the insured's property because the leak from this system has or is likely to impact groundwater or someone else's property. The coverage also includes costs incurred for legal defense, subject to a deductible not to exceed $1,000 per claim.

What should I do next?

•Determine whether you have had an oil safety valve or new oil supply line with protective sleeve installed since January 1, 1990. If you have, your permit from the fire department for the installation can be used to document your compliance. You can request a copy from the fire department if the permit is on file, or a licensed oil burner technician can certify that status on a form.

•If you do not have an oil safety valve or oil supply line with protective sleeve in place, have one or the other installed and certified. Either contact your oil delivery company to ask if they employ a licensed oil burner technician or find a service person in your area. (A list of licensed technicians can be viewed at http://db.state.ma.us/dps/licenseelist.asp. Click on the "individuals" tab, scroll down to and then select "Oil Burner - Technical Certificate" in the "select a license type" box, type in your city or zip code, and click "select").
•Consider buying insurance coverage for the cleanup of a leak.

◦Determine whether your existing policy provides oil leak coverage.

◦If it does not, consider calling your homeowner insurance agent to amend the policy to include this coverage.

Department of Fire Services Forms

MA Department of Fire Services Forms for use by Licensed Oil Burner Technicians to document compliance of oil heating system upgrades may be found at:

OSFM Forms Web site


Asbestos

Q. I have a listing that has pipes in the basement that appear to be insulated in asbestos. The seller said he heard that his house would sell faster if it were removed, so he said he was “going to take care of it.” I’m afraid he’s going to try to remove it himself. What can I do to protect him, as well as myself?

A. Explain to your client that the worst thing he can do is try to remove it himself. Removal may very well be unnecessary and it is definitely dangerous to his family'S health, as well as his own. In fact, the state’s DEP explicitly states that if asbestos is in good condition, no state or federal law requires its removal.

There are a lot of jobs around your home where being a do-it-yourselfer can be fun and safe. Asbestos removal is most certainly not one of them. Asbestos is a potentially fatal disease that is caused by the inhalation of asbestos fibers. Disturbance of asbestos insulation by attempting its removal can cause the release of these fibers into the air in the home. You should provide your client with information about asbestos to help him understand why following your advice on this issue is essential. DEP’s information and FAQ sheet is located at the following web address: www.mass. gov/dep/air/asbguid.htm.

Massachusetts Department of Environmental Protection

Hurricane Safety Checklist

Be Red Cross Ready


Hurricanes are strong storms that cause life- and property- threatening hazards such as flooding, storm surge, high winds and tornadoes.
Preparation is the best protection against the dangers of a hurricane.

Know the Difference

Hurricane Watch—Hurricane conditions are a threat within 48 hours. Review your hurricane plans, keep informed and be ready to act if a warning is issued.

Hurricane Warning—Hurricane conditions are expected within 36 hours. Complete your storm preparations and leave the area if directed to do so by authorities.


What should I do? What supplies do I need? What do I do after a hurricane?

❏ Listen to a NOAA Weather Radio for critical information from the National Weather Service (NWS).

❏ Check your disaster supplies and replace or restock as needed.

❏ Bring in anything that can be picked up by the wind (bicycles, lawn furniture).

❏ Close windows, doors and hurricane shutters. If you do not have hurricane shutters, close and board up all windows and doors with plywood.

❏ Turn the refrigerator and freezer to the coldest setting and keep them closed as much as possible so that food will last longer if the power goes out.

❏ Turn off propane tanks and unplug small appliances.

❏ Fill your car’s gas tank.

❏ Talk with members of your household and create an evacuation plan. Planning and practicing your evacuation plan minimizes confusion and fear during the event.

❏ Learn about your community’s hurricane response plan. Plan routes to local shelters, register family members with special medical needs as required and make plans for your pets to be cared for.

❏ Evacuate if advised by authorities. Be careful to avoid flooded roads and washed out bridges.

❏ Because standard homeowners insurance doesn’t cover flooding, it’s important to have protection from the floods associated with hurricanes, tropical storms, heavy rains and other conditions that impact the U.S. For more information on flood insurance, please visit the National Flood Insurance Program Web site at www.FloodSmart.gov.



❏ Water—at least a 3-day supply; one gallon per person per day

❏ Food—at least a 3-day supply of

non-perishable, easy-to-prepare food

❏ Flashlight

❏ Battery-powered or hand-crank radio

(NOAA Weather Radio, if possible)

❏ Extra batteries

❏ First aid kit

❏ Medications (7-day supply) and medical items (hearing aids with extra batteries, glasses, contact lenses, syringes, cane)

❏ Multi-purpose tool

❏ Sanitation and personal hygiene items

❏ Copies of personal documents (medication list and pertinent medical information, proof of address, deed/lease to home, passports, birth certificates, insurance policies)

❏ Cell phone with chargers

❏ Family and emergency contact information

❏ Extra cash

❏ Emergency blanket

❏ Map(s) of the area

❏ Baby supplies (bottles, formula, baby food, diapers)

❏ Pet supplies (collar, leash, ID, food, carrier, bowl)

❏ Tools/supplies for securing your home

❏ Extra set of car keys and house keys

❏ Extra clothing, hat and sturdy shoes

❏ Rain gear

❏ Insect repellent and sunscreen

❏ Camera for photos of damage



❏ Continue listening to a NOAA Weather Radio or the local news for the latest updates.

❏ Stay alert for extended rainfall and subsequent flooding even after the hurricane or tropical storm has ended.

❏ If you evacuated, return home only when officials say it is safe.

❏ Drive only if necessary and avoid flooded roads and washed-out bridges.

❏ Keep away from loose or dangling power lines and report them immediately to the power company.

❏ Stay out of any building that has water around it.

❏ Inspect your home for damage. Take pictures of damage, both of the building and its contents, for insurance

purposes.

❏ Use flashlights in the dark. Do NOT

use candles.

❏ Avoid drinking or preparing food with tap water until you are sure it’s not contaminated.

❏ Check refrigerated food for spoilage. If in doubt, throw it out.

❏ Wear protective clothing and be cautious when cleaning up to avoid injury.

❏ Watch animals closely and keep them under your direct control.

❏ Use the telephone only for emergency calls.





Let Your Family Know You’re Safe

If your community has experienced a hurricane, or any disaster, register on the American Red Cross Safe and Well Web site available through RedCross.org/SafeandWell to let your family and friends know about your welfare. If you don’t have Internet access, call

1-866-GET-INFO to register yourself and your family.

Foreclosure reforms may be coming to a head

Getting banks, investors and borrowers together to work out a solution that benefits them all is the most promising idea to emerge since the housing market first crashed.

We are now in the fifth year of a housing crisis in which more than 3 million Americans have lost their homes to foreclosure, with millions more still at risk.

Every initiative — government or private — to stem the tide of misery has fallen leagues short in the face of continued economic gloom and the intransigence of lenders.

So it's an odd moment to be identifying glimmers of optimism that solutions to the crisis might finally be emerging. Yet that may be the case.

Over the next few weeks, several initiatives aimed at reforming the foreclosure process, holding mortgage lenders and services accountable for their past abuses, and creating more effective mortgage workouts are coming to a head.

First, some context. The complexity of the foreclosure crisis stems from the process of bundling hundreds of thousands of mortgage loans into securities and selling them to investors.

Typically, banks and other lenders retained almost no financial interest in the mortgages they originated, other than the duty to service them — collect payments and pursue delinquent borrowers, say — for which they received a fee.

Several drawbacks to that system emerged when the housing economy crashed. Because the loans weren't going to stay on their books, the lenders hadn't been too careful about whom they lent to and on what terms.

Ownership of the repackaged loans was dispersed among investors, so it's hard to know even today who the owners are or whether their ownership is properly documented. This has led to further abuses, such as the infamous "robo-signing" outbreak, in which institutions trying to foreclose on mortgages have submitted forged documents attesting to their legal right to do so.

Perhaps the biggest problem is that although the servicers, which include huge banks such as Bank of America and Wells Fargo, are burdened with the responsibility to renegotiate mortgages to keep borrowers out of foreclosure, their authority to do so on behalf of investors is murky.

As a result, though the investor, the borrower and the economy in general benefit if a home is kept out of foreclosure, even if that means its owner makes lower payments than were required by the original mortgage, the servicing banks are leery of renegotiating too aggressively.

The most closely followed remedial effort involves the 50 state attorneys general under the leadership of Iowa Atty. Gen. Tom Miller.

Last March, the group produced a 27-page proposal for foreclosure reforms that drew fire from some consumer advocates for being too lenient — its provisions include mandates that banks comply with state law in dealing with borrowers, as if that's a novel concept — and from business interests for putting too much pressure on banks to reduce principal balances for homeowners having trouble keeping up payments on homes with values that have fallen below the mortgage balance.

But Miller's group is under pressure to issue a final proposal around Labor Day. The longer the settlement talks drag on, some observers say, the harder it becomes to keep all the participants on board.

Indeed, a key attorney general who has been skeptical of Miller's approach is pursuing his own line.

New York's Eric T. Schneiderman recently took a promising step by filing to intervene in the proposed legal settlement between Bank of America, which acquired mortgage king Countrywide Financial, and Bank of New York, which managed 530 investment trusts that bought packages of Countrywide mortgages. Schneiderman wants to block the settlement unless it's improved.

The settlement calls for BofA to pay investors in the trusts $8.5 billion and to commit to an improved mortgage servicing and modification process, including giving "individualized attention" to high-risk borrowers aimed at helping them stay in their homes.

Among the deal's flaws, according to Schneiderman's motion, is that the payment is too low and the settlement indemnifies Bank of New York against further claims for fraud in its handling of the trusts. Schneiderman says the bank, which he contends is guilty of numerous violations of state law, had a conflict of interest in cutting a deal that let itself off the hook. (The New York state judge overseeing the BofA settlement talks with Bank of New York hasn't yet ruled on Schneiderman's motion.) Several investors have also objected that the two banks made the settlement privately and secretly.

Despite its shortcomings, the proposal settlement does provide a possible framework for solving the foreclosure crisis by giving all parties something they want: Borrowers get efforts at loan modifications from their banks, in return for which the banks and investors would get the borrowers' acknowledgment that they're owed the money. Fewer foreclosures, more loan modifications and an end to robo-signing — in the housing world, that's nirvana.

Schneiderman has some pretty heavy artillery to bring to the battlefield.

Most of the trusts subject to the proposed settlement fall under the jurisdiction of New York law (the rest come under the law of Delaware, whose attorney general, Beau Biden, is working with Schneiderman). As my colleagues Nathaniel Popper and Alejandro Lazo reported last month, the standard for fraud claims under New York law is less stringent than under federal law.

A third driver of solutions to the foreclosure crisis is investigations by individual states into foreclosure abuses. California, where nearly 800,000 homes have been lost to foreclosure since 2006, according to the property information service DataQuick, and tens of thousands more might fall in the next year, is ground zero of the foreclosure crisis.

Atty. Gen. Kamala Harris has been playing both sides of the fence; she has met with Schneiderman to discuss cooperating in his investigation of securitization fraud, but is also watching the 50-state effort to see if it produces "accountability and results" for California borrowers. Read that as: a cash settlement commensurate with the pain caused to Californians by foreclosure abuses, and real reform. The louder that states like California threaten investigations, the more inclined banks may be to agree to reform.

It's still unclear how each of these initiatives will influence the others, or indeed if any of them will result in relief for strapped and defrauded homeowners. Bankers have been perfectly candid about their power to draw out the legal process indefinitely if they choose: Bank of New York has defended its proposed $8.5-billion settlement with Bank of America in court by warning that the alternative is "litigation …over the course of several years."

It warns that there might be legal questions over whether Bank of America, which acquired Countrywide in 2008, could be forced to cover judgments against the latter. Without BofA's deep pockets, it's hinted, there won't be money for anyone.

The one incontrovertible fact about the foreclosure crisis is that voluntary loan modification efforts, whether they're conducted under the sponsorship of the government's Home Affordable Modification Program or the mortgage industry, haven't helped more than a handful of affected borrowers.

Bringing the banks, investors and borrowers to the same table to work out a solution that benefits them all is the most promising idea to emerge since the housing market first crashed. Why has it taken so long to get there?

Mortgage Lending News