Flood insurance just got cheaper … for now

From the Star Ledger:

President signs bill approving flood insurance rollbacks

President Obama signed legislation today, fast tracked by Congress last week, that rolls back scheduled increases in federal flood insurance.

The new law caps annual rate increases and repeals provisions eliminating flood insurance subsidies on existing properties for home buyers at the time of sale.

U.S. Sen. Robert Menendez (D-N.J.), one of the sponsors of the legislation, called it a tremendous victory for thousands of New Jersey homeowners who were facing skyrocketing flood insurance costs. He said the planned increases, due to take effect next year, would have further threatened the state’s recovery from Hurricane Sandy and jeopardized the financial security of thousands of residents.

Congress took up the issue after Hurricane Sandy, as homeowners began raising concerns over mandated changes in the National Flood Insurance Program implemented in 2012 meant to make the program more financially stable.

Those reforms under the Biggert-Waters Act, which had passed with overwhelming bipartisan support, had called for rates reflecting the true cost of flood risk. But the new rules led to big premium increases for policyholders who complained they end of the subsidies would force them from their homes.

Under the bill signed by the president today, annual rate increases in flood insurance will be capped at an average of 15 percent, with a maximum of 18 percent for primary homeowners. Secondary homeowners can still see their premiums rise by 25 percent a year.

This entry was posted in Economics, Housing Recovery, New Jersey Real Estate, Shore Real Estate. Bookmark the permalink.

64 Responses to Flood insurance just got cheaper … for now

  1. grim says:

    From the NYT:

    A New Weapon for Bidding Wars

    In response to the fierce competition for homes in healthy metropolitan markets like those surrounding New York City, some mortgage lenders are taking steps to put buyers who must borrow on par with those offering to pay in cash.

    Buyers in need of financing are finding they are at a disadvantage in competitive markets. Because inventory is so low, well-priced homes are drawing multiple bids, and sellers are showing a preference for offers that aren’t conditional on financing.

    Of course, buyers can sign a purchase contract without the usual mortgage contingency, which provides an out if they are unable to obtain financing. But they risk losing their deposit if their loan is declined.

    To make borrowers feel more comfortable about proceeding without a contingency, some lenders are putting loan applications through a more thorough vetting process before the buyer enters into a contract. Luxury Mortgage in Stamford, Conn., has begun “pre-underwriting” clients in Westchester and Fairfield counties. Unlike a preapproval for a certain loan amount, usually based on a check of a borrower’s credit history, pre-underwriting involves a thorough review of all the documentation required for a formal approval, said Peter Grabel, a senior loan originator.

    The underwriting is done before a contract is negotiated, but usually after a house is selected and an offer accepted.

    Mr. Grabel suggests buyers seek an appraisal before signing a contract, to forestall a financing shortfall should the value come in low.

  2. yome says:

    Low inventory ; decrease in capable buyers = High inventory ; loose mortgage lending NO?

  3. Fast Eddie says:

    grim/30 year realtor,

    Ok, so here is Waldwick. A standard CHC and hasn’t been updated in 40 years. Asking price is 595K and taxes are 15K. Not much difference than the “need to have” towns. That’s why I hesitate with this town. Where’s the value added difference?

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1408090&dayssince=&countysearch=false

  4. Ben says:

    Heh, good story for you. My mother owns a co-op in NYC in Greenwich village. Bought in 2001 after 9/11. Wasn’t a bad deal. But she still couldn’t afford it. As of now, rent was covering the mortgage. Her income is extremely small from her job. Anyway, she got a mortgage modification through some federal program that Wells Fargo steered her into. She’s renting right now in Jersey and claimed it as her primary residence. So Wells now got the mortgage payment lowered $300 and she raised rent $400. Thanks to the feds, she’s no $400 in the green every month instead of teetering on foreclosure. Wells was all too happy to do this.

  5. Fast Eddie says:

    Sellers will move contingent on finding a new home. LMAO! Good luck! And if route 17 was any closer, traffic would be driving through the kitchen.

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1406399&dayssince=&countysearch=false

  6. Fast Eddie says:

    At least it’s got a little charm and warmth to it. Pictures always make it look bigger until you step inside. It looks like it was lifted from the Allwood section of Clifton. S.hitty locale and the summer/winter pictures tell you how long this thing has been listed. I’d say in the low 400s… maybe closer to 400:

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1404911&dayssince=&countysearch=false

  7. Fast Eddie says:

    And now for the “to die for” towns: This one has been for sale forever. It’s on the corner of a main road and no yard. I was in it a year ago. I remember the overwhelming dog smell vividly. I think realtors should include everything in the description: “This one is a real charmer, reeks of aromatic cabbage and p1ss, hurry, bring the checkbook!”

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1406959&dayssince=&countysearch=false

  8. Fast Eddie says:

    619 f.ucking thousand dollars for a cape in the “less” desirable part of town. Two blocks over and you’re in Hawthorne. G0d forbid! What would Muffin and Pierce’s friends think! I love the summer/winter pictures. The sellers of this place need to be slapped:

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1406757&dayssince=&countysearch=false

  9. grim says:

    A standard CHC and hasn’t been updated in 40 years.

    Are we looking at the right pictures? I see new windows, roof, siding, updated kitchens and baths.

  10. grim says:

    Just looking at closing prices in Waldwick over the past few months. 3br splits are closing around $400k with no updates, to $440k with a few updates.

    4br splits and colonials look to be closing at $500k and above depending on updates.

  11. Doyle says:

    #10 I agree. Looks like a pretty nice house.

  12. Fast Eddie says:

    grim,

    My bad, it has been updated, I was looking at two things at once. 15K in taxes? My point is you either pay for it in taxes or mortgage. It’s not like you’re getting any value because it’s “Waldwick.” Might as well look in the other town that begins with a “W”.

    Still, the bigger message is the same: First time home buyers are getting royally f.ucked beyond belief. I’ll repeat it over and over; this is not a normal market, farthest thing from it. Anyone who bought anything before 2002 has leverage. Everybody else is paying for someone’s bailout. You see these houses every week. Most of them are over-priced, wretched wrecks. In the mid 90s, we walked into 4 houses and seriously considered everyone of them. It took us a few days to decide and we signed the contract. Things were normal. Today, it’s a smash and grab with real live victims.

  13. Nothing says “weekend morning” like gary’s self-induced water torture.

    Gary, you should be stocking up on guns, shiny and potable water. All the rest is a sad kabuki and prelude to the inevitable collapse of everything.

  14. Don’t forget to lay in a few cases of Rheingold, Gary.

  15. grim says:

    My bad, it has been updated, I was looking at two things at once. 15K in taxes? My point is you either pay for it in taxes or mortgage. It’s not like you’re getting any value because it’s “Waldwick.” Might as well look in the other town that begins with a “W”.

    It won’t close at $595k in Waldwick, probably closer to $550k. If it was in Wyckoff it might have $15k taxes too, but it would also have a good chance at closing over $700k.

  16. grim says:

    At that point you might as well just buy in Wayne, since you could get something for a similar price with taxes closer to $11-12k.

    Nice place just came up for sale around the corner, nice neighborhood, ask is $519k but it’ll close with a 4 handle. Only downside is that it’s a split.

  17. Fast Eddie says:

    All the rest is a sad kabuki and prelude to the inevitable collapse of everything.

    I can’t help but think that anyone signing a contract today has just been a player in a ruse. To know how things operated pre-bubble and seeing what I see today, it just boggles my mind. You are absolutely right, it’s nothing more than a f.ucking shell game. How does everyone not see it?

  18. Fast Eddie says:

    grim,

    You know the deal with Wayne; the kid, distance to school, and so on. :) Since I’ve been in the area so long now, I’ll probably b1tch and m0an for two more years and wind up somewhere in Tom’s Lake anyway.

  19. Fast Eddie says:

    Meat,

    Apparently, cabbage, Rheingold, over-weight folks with no grooming habits and wet dog smell are big selling features!

  20. Gary, distance will mean nothing when we’re walking every day to the nearest stream in order to do wash and gather water.

  21. gary (20)-

    That stuff is like the kiss you get from a h00ker the morning after.

  22. Fast Eddie says:

    [22],

    LOL! And how exactly would you know? :)

  23. Metaphorically speaking, of course.

  24. chicagofinance says:

    ““Purity is a big thing with the coolerati,” notes Gutfeld. “But, like cool, it exists separate from the notions of good and evil. Pure sugar is delicious. How about pure cocaine? How about pure horses–t?” That depends: Is it locally sourced?”

    xx

    Why are good things seen as bad, and why are bad things seen as good?

    Greg Gutfeld poses the question and supplies an answer in “Not Cool: The Hipster Elite and Their War On You” (Crown Forum). Gutfeld paints a picture of a coolocracy in which the world is run by star-bellied Sneetches who tell us what’s hip and we obediently keep running in and out of the belly-star-making gizmo.

    Icons of cool like Robert Redford, Mark Zuckerberg, Jesse James and Yoko Ono get shredded in the book, which is as breezy, enlightening and funny as Gutfeld’s two TV shows, “The Five” and “Red Eye.”

    On both shows, the way he delivers truths disguised as jokes makes him a kind of reverse Jon Stewart.

    Gutfeld finds that cool warps everything. In 2012, for instance, Zuckerberg’s Facebook not only didn’t pay any net federal income tax but was actually due a refund of about $430 million. Why? Because the company (lawfully) deducted the stock options it issues to Facebook employees, many of them now deliriously wealthy because of those options. If Exxon or Koch Industries had managed that, someone might have noticed.

    But because it was Facebook — a company that oozes cool out its pores — it was a one-day story that people forgot about. “If this company were something that actually made something in a factory or a field,” writes Gutfeld, “it would be roundly condemned by every single media hack on the planet.”

    Never mind that companies like Exxon and Koch supply the energy without which Facebook wouldn’t work: They’re not cool.

    Hipster iconoclasm dates back at least to the 1950s (James Dean, Marlon Brando), but cool remained outside the establishment until the Woodstock Generation began to take over. It imposed warped values — artfully cultivated rebellion, counterproductive liberal “social consciousness,” romantic outlaw status for murderous enemies of America (the Weather Underground, Mumia Abu-Jamal, the Boston Marathon bombers) — on the mainstream. Today Flower Power types run the media, the networks, the Hollywood studios, even the Justice Department.

    But ask someone in their 80s and 90s what’s cool, Gutfeld figures, and they’d probably say something like, “Killing Nazis.”

    A 1950s study that tried to measure coolness of jobs identified five factors that gave a career prestige: importance of the task performed, level of authority you have, the know-how required, the dignity of the tasks required and pay.

    Scoring highest were jobs like bankers, executives, ministers and professors.
    Fast-forward to today, when, writes Gutfeld, “the Labor Department reports that only 47% of Americans have a full-time job. That’s because it’s hard to get full-time work as a maker of artisanal tricycles.” “Raising awareness” didn’t strike anyone as much of a career in the 1950s, but a recent survey of 350 college students discovered that “social consciousness,” i.e., daft activities like collecting signatures on petitions for Greenpeace, was among the accepted cool traits.

    The end result of eco-minded hipster thinking is, for example, the San Francisco ban on plastic shopping bags. This well-intentioned move in favor of all that is green and natural actually wound up killing people. Why? Because when you use bags to transport food, bacteria collects in them.

    Reusing that Earth-friendly tote gradually turns it into a chemical weapon. The ban, declared a University of Pennsylvania study, “is associated with a 46% increase in death from food-borne illnesses. That implies an increase of 5.5 annual deaths for the county.” (The researchers added that this was a conservative estimate.)

    So the bag ban is basically a serial killer on the loose. But it’s cool because we probably saved the lives of at least five seagulls, and more important, it makes us feel cool. More cities are sure to follow. A similar jihad against DDT, which saved an estimated 500 million lives according to The Economist, has led to the deaths of perhaps millions in Africa, where cool environmentalism meets cold hard reality. Now a few groovy artisanal types are sounding the alarm about vaccines, with predictably depressing results.

    A year ago a Florida county saw its first death from whooping cough in decades. The victim, a baby, had parents who decided not to vaccinate.

    Vaccines, DDT, genetically modified foods — all these things are unnatural or impure, hence suspect.

    “Purity is a big thing with the coolerati,” notes Gutfeld. “But, like cool, it exists separate from the notions of good and evil. Pure sugar is delicious. How about pure cocaine? How about pure horses–t?” That depends: Is it locally sourced?

    OK, so why aren’t conservatives cool? Gutfeld makes a valid point: “From my experience being around conservatives, it’s extremely frustrating how dismissive they are of ‘weird’ things, and that hurts them.”

    Gutfeld chooses the music that backs his segments on “The Five” and “my choices are never met with ‘That’s good’ or ‘That sucks.’ It’s always rewarded with anguished looks on the other panelists’ faces and the two-word review, ‘That’s weird.’ ”
    Automatically dismissing tradition and latching onto whatever’s new isn’t cool. But neither is being closed-minded.

  25. anon (the good one) says:

    am glad Duke is out

  26. chicagofinance says:

    My favorite line…..

    Fast-forward to today, when, writes Gutfeld, “the Labor Department reports that only 47% of Americans have a full-time job. That’s because it’s hard to get full-time work as a maker of artisanal tricycles.”

  27. chicagofinance says:

    anon: The Tar Heels deserved to be out on their a%%es too……..

  28. anon (the good one) says:

    and then you accuse Anon (the good one) of being a troll. who’s the real troll here

    “Not Cool: The Hipster Elite and Their War On You” (Crown Forum).

  29. anon is prolly a Dookie.

  30. Comrade Nom Deplume, Guardian of the Cronut Realm says:

    [30] clot

    anon is probaby a Gooner.

    How much does it suck being them today?

  31. Comrade Nom Deplume, Guardian of the Cronut Realm says:

    [29] anon,

    Remember your reusable, recycled, plastic shopping bag. Its good for the environment. Use it often.

  32. Comrade Nom Deplume, Guardian of the Cronut Realm says:

    [21] clot

    ” distance will mean nothing when we’re walking every day to the nearest stream in order to do wash and gather water.”

    That’s all of 50 feet. I’ve a stream on my property. Not sure I’d want to drink from it without some serious filtration though.

  33. anon (the good one) says:

    @tim_cook: Check this out. @jimmyfallon and @billyjoel with iPad and a cool app called Loopy HD. Magical. http://t.co/dWlZr6Lsm6

  34. anon (the good one) says:

    @billmaher: March Madness really is a stirring reminder of what America was founded on: making tons of money off the labor of unpaid black people

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  36. Ragnar says:

    Anon, shows the typical leftist ‘ s reflexive anti Americanism combined with a faulty and perverted understanding of history that you and Maher share.

  37. joyce says:

    Why are you parroting the crap that Bill M says? He’s part of the evil 1% and doesn’t pay his fair share.

    What’s that… he supports raising tax rates? So, I assume he overpays voluntarily now. Oh right, he doesn’t. What’s he waiting for? Why does he need to law to force him to write a bigger check to the treasury… nothing stopping him from doing that now.

  38. Cronut Nom Deplume says:

    [35] anon,

    Keep it down over there, will you? We’re trying to watch the tournament.

  39. 30 year realtor says:

    This weekend’s slice of the North Jersey real estate market…late Thursday afternoon I enter a listing into NJMLS for a 3 unit, brick building in Elmwood Park. Property was foreclosed by a company I represent who buys delinquent mortgages. Property is in clean overall condition, has a driveway, all units are rented with a monthly rent roll of $3475. Only utility paid by landlord is cold water. Taxes are about $9000.

    To determine an asking price we relied on a cash flow analysis because there were no truly comparable sales in the last year. The asking price settled upon was $389,900. Using real expenses, a vacancy factor, a repair reserve and a management fee, the property shows a 5% cash on cash return if a buyer paid 95% of the asking price.

    Due to the fact that there are 3 tenant occupied units, scheduling showings is challenging. All the showings are taking place today between 2:00 – 5:00. Right now there are nearly 40 showings scheduled.

    Apparently there is a strong demand for small income producing properties in suburban areas.

  40. anon (the good one) says:

    @GarySzatkowski: Good morning. If you’ve stepped outside, you know our brief flirtation with spring has ended & winter has returned.

  41. joyce says:

    Thank god we have twitter to tell us what it’s like outside; heaven forbid we actually go out there ourselves.

  42. joyce says:

    Does anyone else wonder when a parking lot becomes a bigger parking deck plus apartments/condos… where are these new tenants going to work? Unless, the sole plan is hope people move in from neighboring communities/states.

    Juice Box says:
    March 23, 2014 at 9:13 am
    http://www.nj.com/essex/index.ssf/2014/03/s_orange_unveils_64m_mixed-use_development_urges_residents_with_2_cars_to_downsize.html#incart_river_defaultouth Orange trying to be Hoboken.

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  44. joyce says:

    You gotta love they’re not even hiding it (re: Tesla in New Jersey)

    http://www.theverge.com/2014/3/19/5525544/new-jersey-auto-dealers-respond-to-teslas-elon-musk

    “This Musk guy, he wants all the profits for himself,” says Tom Dougherty, a 25-year veteran of the business who now works in sales at a luxury vehicle dealership in upscale Princeton, New Jersey. “They wanted to go direct, which means no sales force. That’s cutting out a lot of people. No way that’s gonna fly.”

    “”Mr. Musk is a brilliant man, and Tesla is an innovative company. We can all respect that,” says NJ CAR’s Appleton. “But he doesn’t get what it takes to do business in New Jersey.”

  45. Street Justice says:

    Tea in the harbor?

    March 16, 2014, 9:13 p.m. ET
    NY gun-rights protesters burn registration forms
    Associated Press
    WILTON, N.Y. — Protesters at a gun-rights rally in New York have burned assault weapons registration forms to protest the state’s 2013 gun law.

    The Saratogian reports (http://bit.ly/1nwakhk ) that dozens of gun owners attending Sunday’s rally at the Saratoga Springs Elks Lodge burned New York State Police assault weapons registration forms in a barbecue grill.

    They were protesting the SAFE Act, New York’s gun restrictions enacted last year.

    The deadline to register assault weapons under the law is April 15.

    Lisa Donovan, an organizer of the rally, said organizers were telling gun owners that “once they register, that gun is no longer theirs.”

    Gov. Andrew Cuomo pushed the SAFE Act through the state Legislature in response to the Newtown, Conn., massacre that took the lives of 20 first graders and six educators.

    http://online.wsj.com/article/AP73069ec176e94dd3ab3f46f38733532a.html

  46. chicagofinance says:

    I was out last night with two brothers I knew from the old neighborhood. I hadn’t seen the younger one in about 30 years. He has MS and is at an intermediate stage……holy sh!t that disease sucks…..he’s 44, but his entire body has been short circuited….he was 6′ 2” and kind of strapping, but now he is fcuked……I will say one thing about the bleeding hearts out there ….. just STFU….. we are walking (trying) down the street and these bleeding heart douche try to say some inspiration sh!t…….just go fcuk yourselves…..it’s bad enough that he has to live like that, but you need to remind him that he is a public spectacle too……..selfish idiots……

  47. Michael says:

    Guess, I’m not the only one who sees the value of rental properties in north jersey. It’s terrible, there is no inventory at all in thus part of the market. Btw, cut out the management fee, and you make a lot more than 5% on your money. That # seems really low even with a management fee included. You must have been on the high end for your cost calculation.

    “Apparently there is a strong demand for small income producing properties in suburban areas”

  48. Juic Box says:

    Just took the tour of Greenwood Lake down to Wayne and then back onto the highway. I see little if any appeal to living anywhere near the route 23 corridor. Gotta love those condos carved out rock of some mountain pass in Butler. Hurry now bring your checkbook low 400s….the commuet will be a nightmare of stop and go traffic and smoky sitting on the side of the road waiting to pull you over if you exceed 50 mph, but hey it’s prestigious.

  49. joyce says:

    Good job Mikey misreading his post. Did you eat paint chips as a kid?

  50. Michael says:

    51- what did I misread?

  51. Comrade Nom Deplume, Guardian of the Cronut Realm says:

    [46] joyce

    “That’s cutting out a lot of people. No way that’s gonna fly.”

    If you didn’t tell me who said that, I would have sworn it was uttered by a longshoreman.

  52. anon (the good one) says:

    @NewsBreaker: JUST IN: Apple is in talks with Comcast about teaming up for a streaming-television service http://t.co/QymGlbPAc7 – @WSJbreakingnews

  53. joyce says:

    He wasn’t saying one could or should earn 5% on rental properties; he explicitly calculated an asking price based on the REAL and current expenses and rent, etc. and said 5% is the return if you pay close to this price. I know math is hard for you Mikey, but is reading tough too?

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  55. Lead paint tastes oh, so sweet…

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