PHILADELPHIA – Oct. 26, 2009 – Ralph Zimmerman did something that most of us wish we could, but few of us manage:

In 1996, Zimmerman paid off the mortgage on the Whitpain Township, Pa., house he bought in 1983. Thirteen years instead of 30, when fixed interest rates were as high as 18 percent and rarely lower than 8 percent.

In 1994, the loan was sold to PNC Mortgage, a change he was informed of promptly. He sent the remaining two years of monthly mortgage payments to PNC.

This summer, Zimmerman decided to buy a second home. He was going to use the equity he had accumulated in the house he’s owned free and clear for 13 years to secure the mortgage.

But at settlement, the title company told Zimmerman that the mortgage he had paid off still showed up as a lien on the books at the Montgomery County Courthouse in Norristown, Pa.

“After numerous calls and a lot of grief from PNC, I was told their mortgages were sold to Washington Mutual, and WaMu said they just sold everything to Chase,” Zimmerman said. “I have faxed and e-mailed all documentation I had and have gotten nowhere.” He has hired a lawyer, too.

The title company accepted the proof he submitted, because both houses he owns are in his name, but it would not have done that if he had been selling his first home. He has all his tax forms from every year, and, most important, the payoff documentation from PNC.

Zimmerman said PNC told him it could do nothing because its records don’t go that far back and “they sold all the mortgage information.”

“Why would they sell a mortgage that was paid off?” he asked. “I thought I was great paying it off. Now, I have to worry.

“Will anyone take responsibility to remove the lien?” he asked.

I contacted Ed Kozmore, vice president of PNC media relations, and Michael Fusco at JPMorgan Chase, to see whether this could be fixed easily.

As has been the case several weeks running, Fusco got the Chase staff working on the problem quickly. Kozmore, a first-timer on the “On the House” rescue team, got on the stick quickly as well, but not before apologizing for the way customer-service representatives apparently had dismissed Zimmerman’s inquiries.

Why the customer-service reps acted that way, especially when Zimmerman had proof that he’d paid off the mortgage, has no justification.

After being stymied for weeks, Zimmerman has now received six telephone calls from three people: one from PNC and two from Chase.

“They all assure me they will take care of it some way, but they are not sure if it will be PNC or Chase,” Zimmerman said. “In fairness to Chase, they just merged with WaMu, so they are late to the problem.”

Both have requested more documentation, which Zimmerman’s lawyer is handling.

Though Zimmerman said he will not feel satisfied until the matter is cleared up and the lien is taken off the books, “at least it seems that someone is paying attention.”

© 2009 The Philadelphia Inquirer, Al Heavens. Distributed by McClatchy-Tribune News Service.

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TALLAHASSEE, Fla. – Oct. 26, 2009 – Florida mandates property insurance discounts for homeowners willing to fortify their homes against a hurricane. But Citizens Property Insurance Corp. says many owners have lied to cut the cost of coverage fraudulently claim hurricane mitigation discounts to cut costs.

As a result, Florida’s insurer of last resort plans to randomly inspect 500 homes to see how many owners don’t deserve the discounts, and to get a feel for the extent of the problem. About 400,000 Citizens policyholder claim some kind of hurricane mitigation discounts, for a total savings of about $700 million in wind mitigation credits.

Florida law requires the insurance discounts. Providing they actually perform the change, homeowners receive a discount off their property insurance for mitigation efforts such as storm shutters, impact-resistant windows and doors, and reinforced garage doors.

The problem, say insurers, is that it’s difficult to monitor and easy to abuse. Homeowners willing to lie to an insurance company are in little danger, so far, of being caught.

Other insurers also voice frustration with the discount credits for mitigation, and some have criticized adjustors who may have filled out forms incorrectly. The Florida Office of Insurance Regulation says companies that suspect fraud should file a complaint.

Citizens’ action, approved by its board, will cover homes and commercial policies. Each inspection will cost about $150, and the company will decide whether to expand the program or focus on a specific type of discount after it studies the results of the first phase. It has not ruled out an inspection of all homes that claim some kind of mitigation discount credit.

“This is one of the most important initiatives that Citizens has ever undertaken,” says Citizens Senior Vice President of Underwriting Paul Palumbo. “Citizens will benefit by ensuring that it has accurate information on the risk it covers. Policyholders will benefit because they will receive validated information on the storm worthiness of their home.”

Source: St. Petersburg Times, Oct. 24, 2009; Jeff Harrington.

TALLAHASSEE, Fla. (AP) – Oct. 26, 2009 – Universal Property and Casualty Insurance has received approval from Florida regulators to raise its average homeowners insurance rates about 14.6 percent statewide.

Parent company Universal Insurance Holdings said rates were effective Thursday for new business and Dec. 11 for renewal business. Universal is the second-largest private insurer in Florida after State Farm.

Officials said that as of the beginning of this year Universal had 461,000 policies, or about 7.5 percent of the market.

The company is among a flurry of insurers that have sought to raise rates.

Florida Insurance Commissioner Kevin McCarty has said that each request is being considered on its own merits, but in general he sympathized with the rationale for seeking higher rates.

Information from: St. Petersburg Times, http://www.sptimes.com

TALLAHASSEE, Fla. – Oct. 21, 2009 – Florida insurance regulators are failing in their duties if they don’t make the state-backed Citizens Property Insurance Corp. raise property insurance rates by 10 percent across the board, a business group lobbyist said Tuesday.

Barney Bishop III, president of Associated Industries of Florida, said it’s “astonishing” that the state-backed insurer would not increase rates on all policies by 10 percent.

“It is our position that every rate should go up,” Bishop told representatives from the Office of Insurance Regulation. “The rates haven’t been actuarially sound for the last five years.”

OIR deputy commissioner Belinda Miller and Bishop sparred over legislative intent.

Bishop argued that lawmakers wanted policies increased 10 percent while Miller said OIR believed the legislation established a ceiling, but that various rates could be assessed and that some decreases would even be awarded.

He called Citizens a cash-starved, bond-challenged entity that has ignored legislative intent by failing to move forward with the double-digit increase.

“They’re gonna be leaving money on that table and that means money that’s not gonna be available to pay losses,” Bishop said.

Citizens was created by the Legislature in 2002 as a safety net to offer property coverage to homeowners without private insurance options, albeit not necessarily at cheaper rates. The fiscal viability of Citizens rests with Florida residents who would make up any losses through a statewide assessment.

Florida residents with auto, residential property or commercial property insurance policies are already paying a 1 percent assessment to shore up the Hurricane Catastrophe Fund tagged with huge losses after the 2004 and 2005 hurricane seasons.

“The only way to pay for those losses is to borrow the money and when you borrow that money you have to pay it back for years and years and years on all of our personal insurance policies and all of our business insurance policies,” Bishop said. “If you’re a small business person you’re going to pay both personally and for your business.”

Bishop said Citizen’s $4 billion surplus is far short of what would be needed to avoid having Florida residents on the hook for millions of dollars in assessments if a big storm struck the state. He said Citizen’s present exposure is $413 billion.

He said an across-the-board 10 percent increase would generate an additional $211.5 million to ease the huge deficit Citizens would find in trying to pay claims following a Category 2 or greater hurricane.

Miller argued the 10 percent was a cap set by lawmakers and not intended to be applied equally to all Citizens’ policy holders.

“We don’t want to increase rates too quickly because people would have a hard time paying for it.” Miller said. “Nor do we want to have a rate that is not adequate to pay their claims. Our concern is to make sure that this strikes the appropriate balance.”

Copyright © 2009 The Associated Press, Brent Kallestad, Associated Press writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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WASHINGTON (AP) – Oct. 21, 2009 – Key congressional leaders want to extend the tax credit for first-time homebuyers beyond its scheduled end-of-November expiration despite complaints of fraud and Obama administration concerns about the costs.

Housing and Urban Development Secretary Shaun Donovan says the administration is not sold on the idea. For the past several weeks, Obama administration officials have been talking about possibly extending the credit to help spur the economy and create jobs. But at a congressional hearing Tuesday, Donovan said the administration needs better cost estimates.

“To truly understand the costs, we will not know that until Americans have filed their tax returns,” Donovan told the Senate Banking Committee. “We believe it’s critical to have the information necessary to make a fully informed decision about the costs.”

Tax filing season doesn’t start until next year. But Donovan said he expects to get cost data in the next few weeks. “We understand the urgency of this situation,” Donovan said.

The Internal Revenue Service has opened 107,000 examinations of questionable claims and identified 167 criminal schemes involving the tax credit since it was expanded as part of the economic stimulus package enacted in February.

But lawmakers understand the program is popular and has helped the struggling housing industry recover.

Lawmakers said they might add protections to help prevent fraud. But there is a growing consensus among congressional leaders that the housing market is still fragile enough to justify extending the program.

House Majority Leader Steny Hoyer, D-Md., said he favors extending the existing credit through the end of the year as lawmakers work to “find out about how ethically and how honestly this policy is being pursued.”

Senate Banking Committee Chairman Chris Dodd said, “We still need to use every tool at our disposal” to help the

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