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Thread: Hard choices for Gulf homeowners

  1. #1
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    Hard choices for Gulf homeowners

    Left homeless and jobless, some Katrina survivors won't be able to meet their mortgage obligations.
    September 22, 2005: 2:54 PM EDT
    By Jeanne Sahadi, CNN/Money senior writer

    http://money.cnn.com/2005/09/22/real...ners/index.htm

    NEW YORK (CNN/Money) – Imagine it's July and you're behind on your mortgage payments, or you're making them, but just barely. You don't have adequate homeowner's insurance, and you've borrowed against the equity in your home.

    Now fast forward to today. A hurricane has obliterated your house, your job and very likely the property values in your area. The few things left in tact, it seems, are your mortgage and your other debts.

    What's a homeowner to do?

    That's a question that will face an untold number of Katrina survivors in the coming months.

    For now, mortgage companies are cutting all sorts of breaks. They are letting survivors defer payments, waiving late fees and not reporting delinquent accounts to the credit bureaus.

    But at some point payment will come due.

    There are 1.4 million single-family residences in the federally declared disaster areas in Louisiana, Mississippi and Alabama, according to data from First American Real Estate Solutions.

    The National Association of Realtors (NAR) estimates that a minimum of 200,000 homes have been lost to Katrina, not including homes that are damaged but repairable.
    Welcome to the World Baby Caleb!!!

  2. #2
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    Sounds sad. I can't imagine what this Rita along with Katrina is going to do to the economy down here. It is going to be a sad sad year to come for this part of the country.

  3. #3
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    Quote Originally Posted by tybee204
    Left homeless and jobless, some Katrina survivors won't be able to meet their mortgage obligations.
    September 22, 2005: 2:54 PM EDT
    By Jeanne Sahadi, CNN/Money senior writer

    http://money.cnn.com/2005/09/22/real...ners/index.htm

    NEW YORK (CNN/Money) – Imagine it's July and you're behind on your mortgage payments, or you're making them, but just barely. You don't have adequate homeowner's insurance, and you've borrowed against the equity in your home.

    Now fast forward to today. A hurricane has obliterated your house, your job and very likely the property values in your area. The few things left in tact, it seems, are your mortgage and your other debts.

    What's a homeowner to do?

    That's a question that will face an untold number of Katrina survivors in the coming months.

    For now, mortgage companies are cutting all sorts of breaks. They are letting survivors defer payments, waiving late fees and not reporting delinquent accounts to the credit bureaus.
    But at some point payment will come due.

    There are 1.4 million single-family residences in the federally declared disaster areas in Louisiana, Mississippi and Alabama, according to data from First American Real Estate Solutions.

    The National Association of Realtors (NAR) estimates that a minimum of 200,000 homes have been lost to Katrina, not including homes that are damaged but repairable.
    How nice of them!!!

    So often times it happens that we live our life in chains, and we never even know we have the key. ...Eagles, "Already Gone"

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    FEMA will help out renters without insurance by providing funds to cover lost and destroyed items like furniture.

    Where insurance on residences doesn't exist at all or where damages aren't covered because of flooding, there may be economic catastrophe for both individuals and banks holding mortgages on property that no longer exists.

    I don't know the answer, but I sure recognize that this problem is huge.

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    I don't understand this article. Mortgage companies require that you have insurance. If you don't have it, they purchase it for you. You are actually in default if you don't carry insurance. Yes, some deductibles are high, thats one thing that FEMA helps with. We experienced this here in Fl last season because the insurance companies tried to force the deductibles twice, once for each hurricane. FEMA also pays rent to rental property owners whose property was deemed unliveable until its repaired.

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    I dunno how to deal with it - but when you choose not to get insurance, you take a gamble. You gamble all of your posessions against the cost of an insurance premium (which, BTW, is pretty small for renters insurance). Sometimes you win, sometimes you lose. When you've got a mortgage, your gamble is even higher. Most mortgages that I've ever heard of require insurance to cover at the very least the mortgage amount - insurance doesn't want you in that position anymore than you want to be there - so if the worst happens, the insurance pays the bank back, and the homeowner is left with no debt - maybe some money back depending on how well insured, but at the least, no debt.

    I agree with the government helping people who have lost everything out a little to get back on their feet, but if you want your home replaced, better have it insured.

  7. #7
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    Most people have hurricane insurance on their homes but many don't have flood insurance. Insurance companies have declared that most damages to coastal residences were due to flood rather than hurricane, which leaves home owners virtually with no insurance coverage.

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    Quote Originally Posted by Details
    I dunno how to deal with it - but when you choose not to get insurance, you take a gamble. You gamble all of your posessions against the cost of an insurance premium (which, BTW, is pretty small for renters insurance). Sometimes you win, sometimes you lose. When you've got a mortgage, your gamble is even higher. Most mortgages that I've ever heard of require insurance to cover at the very least the mortgage amount - insurance doesn't want you in that position anymore than you want to be there - so if the worst happens, the insurance pays the bank back, and the homeowner is left with no debt - maybe some money back depending on how well insured, but at the least, no debt.

    I agree with the government helping people who have lost everything out a little to get back on their feet, but if you want your home replaced, better have it insured.
    Along with H.O. you need flood insurance. Flood insurance is inexpensive, considering you lose everything if the damage is from rising water.

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    If its a flood zone they are required to have flood insurance. I was even forced to have sinkhole insurance this year.

    If you default and don't carry the proper insurance, they purchase it for you, but they are the benefactors and it only covers the structure not contents. They add the amount to the principle of your mortgage.
    I spent a couple years in the foreclosure dept. of a savings and loan bank.
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  10. #10
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    Quote Originally Posted by LovelyPigeon
    Most people have hurricane insurance on their homes but many don't have flood insurance. Insurance companies have declared that most damages to coastal residences were due to flood rather than hurricane, which leaves home owners virtually with no insurance coverage.
    opps..I didn't see your post when I wrote mine.

  11. #11
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    In Georgia you are required to have flood insurance if you are in a flood plane.(assuming you are getting a mortgage) But apparently this is not the case in other areas. I would think it prudent to require this in the gulf states.I had it when I lived in Sarasota, Fl.

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    Flooding isn't usually the problem a mile and more from the coast--hurricane wind forces are the possible expected problem. Katrina, however, with storm surges in the Gulf, flooded homes a mile and more from the beach fronts.

    Homeowners’ damage claims denied in aftermath of Katrina
    Friday, September 23, 2005 By DUNCAN MANSFIELD Associated Press writer

    MOSS POINT, Miss. — The insurance adjuster took one look at the mildewed walls and buckled floors in Jerry and Cynthia Wilson’s water-logged home and issued an immediate ruling: the wreckage caused by Hurricane Katrina was not his company’s responsibility.

    The damage, the Allstate Corp. agent told the couple, was caused not by wind or rain, but by flooding — and they had no flood insurance.

    Not so fast, say the Wilsons and thousands of Gulf Coast homeowners in similar straits. They, along with regulators, politicians and consumer advocates, are already girding for an increasingly contentious battle with billions of dollars in property claims on the line. And similar battles may take place in Texas if Hurricane Rita causes similar havoc when it rams the coast line this weekend.

    “It may take a team of New York lawyers to get down here and straighten this out,” Cynthia Wilson said.

    The battle hinges on what, from a distance, might seem straightforward. Were homes and businesses in Katrina’s path battered by the hurricane’s 145 mph winds or a storm surge that sent Gulf waters up to 30 feet high rushing more than a mile inland, well beyond designated flood zones?--->>


    http://www.cantonrep.com/index.php?C...&ID=243554&r=1

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    Honestly, anyone in the metro New Orleans should perceive of flood insurance and the mortgage companies would be remiss in not requiring this.

  14. #14
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    Quote Originally Posted by concernedperson
    In Georgia you are required to have flood insurance if you are in a flood plane.(assuming you are getting a mortgage) But apparently this is not the case in other areas. I would think it prudent to require this in the gulf states.I had it when I lived in Sarasota, Fl.
    Roughly 25% of all claims paid by the NFIP are for policies in low- to moderate-risk communities.
    http://www.floodsmart.gov/floodsmart...statistics.jsp

    You don't have to live in a flood prone area to need flood insurance. I live in an area that is referred to as a preferred index.That means that my house should not normally flood. My house will be flooded with this hurricane. It is cheap to carry. Not worth the risk to NOT carry it. I have carried it for 25 years. I have spent 7,500 for it...25 years x 300 a year = 7,500 Sounds like a good deal in light of the fact that I would have nothing left but a mildewed hole if I had not carried it.

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