Report Says Consumers Need To Better Understand Their Credit Scores
September 25th, 2008 Categories: Credit And Financing
Americans can save billions of dollars annually on credit card and other interest payments by raising their credit scores, but many consumers still don’t know enough about the complex numerical values that represent their credit risk.
According to the consumer group Consumer Federation Of America, public awareness of credit scores has improved but is still poor. 
Although awareness of credit scores has increased in the past year, it remains poor, the Consumer Federation of America and Seattle-based bank Washington Mutual Inc. found in an annual survey released Thursday.
Given the participation of Washington Mutual, also knowns as WaMu, you would think they really care about the consumer and want to save you money.
One of my favorite bloggers, Karen George, has a different take on WaMu. If you are considering doing business with them, I would read her articles Once Again, WaMu Screws Me and Preditory Banking On A Smaller Friendlier Scale
To learn more about exactly what a credit score is, refer to my article “What Is A FICO Score “.
FICO scores are used by banks and insurance companies to determine rates for mortgage loans, credit cards, auto loans and other financing. Utilities, landlords and employers also check credit scores. Lower credit scores can cost you in many ways.
To learn more about how you can increase your overall wealth by improving your credit score, check out Your Credit Score - The Key To Building Your Future Wealth .
One way to raise a credit score is to avoid charging above the maximum limit on a credit card, or coming close to the limit, the study said.
However, many credit card issuers have recently cut limits on many cards to reduce their credit risks. These reductions can hurt credit scores because they are based partly on the amount a consumer has on a card compared to its overall limit.
For example, if you have charged $4,000 on a card with a $10,000 limit, the “utilization rate” is 40 percent. But if a card issuer reduces the limit to $5,000, that bumps your utilization rate up to 80 percent. Bad for you, but good for them. Isn’t that just business in America these days.
The Consumer Federation recommends credit card users keep the utilization rates below 50 percent, said Stephen Brobeck, executive director of the group.
To improve their credit scores, consumers should also avoid opening multiple new accounts quickly, and pay off debt rather than moving it around, the study said.
Look for upcoming articles on Pensacola Real Estate News regarding ways to improve your credit scores.
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Pensacola Real Estate News Weekly Market Report for Week Ending September 6, 2008
September 22nd, 2008 Categories: Pensacola Real Estate News
Pensacola Real Estate Market Data
Weekly Update For Residential Listings
In Escambia and Santa Rosa Counties
Here is another weekly Pensacola real estate market report. This one covers the week of August 31 - September 6, 2008.
This is my first weekly report in several weeks, so I added the weeks in the August 24th through September 6 timeframe to catch up. I’d like to say the Pensacola real estate market has been keeping me too busy to write blog posts, but that is not the case. Other issues have required my time, but hopefully I’ll be back on track here soon.
We saw a hopeful ending to August with 160 sales and a large drop in the inventory of homes on the market. But my overall monthly Pensacola real estate sales data for August was not as bright.
We’re in the middle of hurricane season right now, so buying real estate can be tricky when there is an active storm in the area. Hurricane Ike did nothing to help people feel better about moving to the Gulf Coast. As many of us remember the destruction wreaked upon Pensacola by hurricane Ivan in 2004, we can imagine the devestation and misery in Galveston right now. Also look for repercussions in the insurance industry.
If you are interested in sales of homes in different areas of Pensacola, check out my Pensacola Real Estate Market Report By Area post which breaks out the sales by different areas Northwest Florida.
- The table shows the weekly market data for Pensacola residential property.
- These numbers include only residential homes and condominiums in Escambia County and Santa Rosa County that are listed in the Pensacola MLS.
- They do not include vacant land or lots, mobile homes or manufactured homes or Pensacola FSBOs.
- The numbers above are created using data from the Pensacola MLS and are deemed reliable but not guaranteed
Click on Pensacola Real Estate News for a list of articles indexed by category.
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Pensacola Real Estate News Monthly Market Update for August 2008
September 18th, 2008 Categories: Pensacola Real Estate News
Pensacola Market Data For August 2008
Residential Properties in
Escambia and Santa Rosa Counties
The table shows the Pensacola real estate market data for the month of August 2008, as compared to previous months. Pensacola home sales have not reached the level they did in the previous 4 months. And the average sold price is also down a bit. And, the average days on market (DOM) has increased quite a bit. All bad!
As my regular readers may have noticed, I haven’t published much real estate news in the past month or so. I’m sorry for the lack of reports, but I had an illness in the family and haven’t been able to get my blogging time in. Hopefully that will get better here soon.
But as you can see from the table, very little has changed in the Pensacola real estate market, and most small changes have not been for the better. I was hoping for some brighter numbers, but it seems to be business as usual. We have seen the inventory of homes drop by a few hundred, which is good.
Now that we are seeing this massive financial crisis, I can only guess that the local real estate market is going to slow down even more. I’m thinking we are going to have a very slow fall and winter. This is bad news for local home sellers, but buyers should be able to have their pick of the bargains, assuming they can get a home loan.
Keep checking back for my weekly and monthly updates to keep abreast of what is going on in this market.
If you are interested in sales of homes in different areas of Pensacola, check out my Pensacola Real Estate Market Report By Area post which breaks out the sales by different areas Northwest Florida.
- The table shows the monthly market data for Pensacola residential property.
- These numbers include only residential homes and condominiums in Escambia County and Santa Rosa County that are listed in the Pensacola MLS.
- The numbers do not include vacant land or lots, mobile homes or manufactured homes.
- The numbers are generated using data from the Pensacola MLS and are deemed reliable but not guaranteed
Click on Pensacola Real Estate News for a list of articles indexed by category.
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Restaurant Chains Looking To Expand Into The Mobile Alabama Area
September 7th, 2008 Categories: Local Stories
Mobile Alabama is getting a lot of attention these days.
I have been trying to keep up with the ever-changing saga of the U.S. Air Force tanker contract war between Boeing and Northrop Grumman. If you haven’t heard, Boeing protested the awarding of the contract to Northrop Grumman
See Pensacola Real Estate News article Boeing Wins Air Force Tanker Award Protest
Next, the Pentagon decided the Air Force could not competently handle the bidding and award process and took it upon themselves to handle the rebid process. The Pentagon recently issued a revised set of criteria for the award. These criteria appear to favor the Northrop Grumman plane (Good for Mobile), and thus Boeing is crying foul on these criteria and trying to push the bidding process into the next presidential administration.
The Pentagon, however, has insisted that the contract will be awarded by the end of the year.
Note that the real losers in this game are our men and women in uniform who desperately need these new airplanes. This seems to be lost on the companies, and on Congress.
Either way, this contract dispute has attracted a lot of attention for Mobile Alabama. Real estate is in high demand.
See Pensacola Real Estate News article Mobile Alabama Needs Real Estate
Now, according to the Alabama Press Register, many restaurant chains are looking into expanding their businesses into Mobile.
Some of the names mentioned were Dunkin, Einstein Bros Bagels, Quiznos, Baskin-Robbins, Jimmy John’s sandwiches, Roly Poly, Zoe’s Kitchen and Cheeburger Cheeburger. In the Alabama Press article they state “Many fast-casual restaurateurs feel Mobile is the perfect fit, thanks in large part to the economic growth expected in the near future.”
James Franks, national director of franchising for Baskin-Robbins, has said the company likes the demographics in Mobile and Baldwin counties, calling the area home to plenty of working professionals and families. “It’s very simple — the people are there, and we don’t just appeal to one demographic. In a tight economy, consumers like a quality product that doesn’t break the bank.”
“Even if (the tanker assembly plant) doesn’t come to Mobile, the area is still continuing to grow and becoming a major force within our region,” said George Waldron, who has directed the opening of 32 Quiznos in the four-state Gulf Coast area in the past 11-plus years.
While Pensacola is not the target for any major industries or contracts, we can at least hope for some spillover from Mobile’s economic growth into our area. It is too bad that our local leaders cannot seem to get along well enough to do anything productive for our area.
See Pensacola Real Estate News article about Mobile’s super economic growth: The Real News Is Next Door In Mobile .
Click on Pensacola Real Estate News for a list of articles indexed by category.
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PMI Companies Hit Hard By the Real Estate Market Downturn
September 1st, 2008 Categories: Credit And Financing
A lot of companies are being hit hard by the real estate market downturn. Included in that group are the Private Mortgage Insurance (PMI) companies. If you are not familiar with the term PMI, here are a couple of short definitions:
“PMI protects the lender against a loss if a borrower defaults on the loan. It is usually required for loans in which the down payment is less than 20 percent of the sales price or, in a refinancing, when the amount financed is greater than 80 percent of the appraised value.”
“PMI consists of insurance policies written by private companies insuring lenders against loss resulting from defaults on mortgages.”
Note that in both definitions I have emphasized that PMI insures the lender against loss. It is not insurance that protects the buyer/home owner. However, it is the buyer/homeowner who foots the bill for PMI, not the lender. This is why I believe PMI is one of the biggest ripoffs in the real estate industry.
Basically, the home buyer is paying an extra monthly premium for insurance that provides them no protection whatsoever. However, very few buyers have the required 20% down payment needed to avoid paying PMI, thus making PMI a necessary evil.
In this slow real estate market awash in foreclosures, banks are losing a lot of money, and they are turning to their PMI policies to collect some of their losses from the PMI companies. This has put the PMI companies in a precarious position.
Mortgage insurer PMI Group Inc. said it lost $274 million in the first quarter, compared with a $102 million profit a year ago. Whenever there’s a default and foreclosure, PMI has to shell out claims to investors that hold the mortgages.
Higher claim rates were driven by home-price declines and the reduced availability of certain loan products, which made it harder for troubled borrowers to refinance, the company said. Average claim size has grown in part because of higher loan sizes and coverage levels, and because declining home prices limit loss mitigation opportunities.
What does this mean for buyers in the Pensacola real estate market? It means that if buyers have less than 20% of the sales price of a home to put down, it will be harder to get a loan to purchase the home. In these cases, my advice is to go for an FHA loan. Yes, you will still pay PMI, but it appears to be the best alternative in this market.
Click on Pensacola Real Estate News for a list of articles indexed by category.
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Allstate To Pay Fine and Settle Insurance Dispute With Florida
August 25th, 2008 Categories: Insurance, Pensacola Real Estate News
Allstate Insurance has a jaded record in Florida, and last week they decided to settle their disputes with the state.
For more about Allstate, check out the Pensacola Real Estate News article Think You’re In Good Hands? Think Again for more on Allstate’s treatment of its customers.
Florida Insurance Commissioner Kevin McCarty complained that Allstate failed to provide rate-related documents regulators had demanded, falsely claimed the material contained trade secrets and falsely certified a request to raise rates by more than 40 percent. Those complaints sound pretty serious to me.
As a result of McCarty’s complaints, Allstate has agreed to:
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Insure 100,000 more Florida homeowners against hurricanes and other perils
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Forgive a $175 million loan to its Florida subsidiaries
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Pay a $5 million fine
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Give an additional 5.6 percent rate cut to homeowners insured by Allstate Corp. in Florida
“It’s unfortunate that Allstate’s disregard for Florida’s laws required the office to take such drastic actions. However, I’m glad that we’ve reached this agreement,” McCarty said. “We’re looking forward to restoring the confidence of Allstate insurance companies.”
But wait, there’s more. Mr. McCarty has said that his office will continue to investigate Allstate for other possible violations of state law in claims handling and potential collusion with rating organizations, trade associations and other entities.
If these violations are substantiated the company could face fines, suspension or revocation of its licenses to do business in Florida.
Does this sound like a company you want to do business with? Do you really think you’re in “good hands”?
Check out the related web sites below for more information.
You’re In A Bully’s Hands With Allstate
Consumer Affairs Allstate Complaints
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Harbour Pointe Condo Auction Results From Pensacola Real Estate News
August 20th, 2008 Categories: Local Stories, Pensacola Real Estate News
On Saturday August 16th, a Pensacola Condo auction was held for Harbour Pointe Condos. The results of the auction are shown in the table below. I apologize for the size of the text in the table. It can be hard to fit that much data in my limited blog space.
I believe it is fair to say that the winning condo bidders ended up with some very good deals. Just look at the sold prices compared to the original asking prices.
Here were the terms of the auction:
Terms: Penthouse Units 2, 3, 4 & 5 — 10% down with $25,000 per condo being in personal check, business check or certified funds; Floor Plan A (3 Bedrooms & 3 Baths) Units 101, 201, 210 & 510 — 10% down with $15,000 per condo being in personal check, business check or certified funds; Floor Plan B (2 Bedrooms & 2 Baths) Units 102, 107, 109, 202, 206, 207, 209, 302, 304, 306 (Model) 307, 309, 409, 506, 507 & 509 — 10% down with $10,000 per condo being in personal check, business check or certified funds; Floor Plan C (2 Bedrooms & 2 Baths) Units 108 & 208 — 10% down with $5,000 being in personal check, business check or certified funds. Closing in 30 days.
Here is the description provided by the auction company:
Property Description
Views are nothing less than breathtaking at Harbour Pointe, a new luxury condominium community gracing the sugary shores of Big Lagoon Bay, a tiny coastal paradise near Pensacola, Florida. Positioned to capitalize on the natural beauty of pristine surroundings, the two, three and four-bedroom residences are draped in vistas of the bay, the Gulf of Mexico and the Gulf Island National Seashore.
Harbour Pointe amenities bring the sparkling waters of the gulf and lagoon directly to the door of this island paradise, which features deeded boat slips and a boardwalk to the beach. Other fine appointments include temperature-controlled garages, storage units, swimming pool, hot tub, cabana, state-of-the-art fitness center, lobby and extensive tropical landscaping. Each condominium displays attention to details with crown molding, tiled floors and upscale appliances.
Close proximity to Big Lagoon State Park makes Harbour Pointe a recreational haven with vast opportunities for fishing, boating, canoeing, crabbing, hiking and simply viewing the abundance of wildlife which flock to this area. Just down the road from Orange Beach, Alabama, Harbour Pointe is convenient to championship golf courses, greyhound racing, a number of old forts and a wide selection of fine restaurants and unique shops.
Property Highlights
- 2, 3 & 4-Bedroom Condos Fronting on Big Lagoon Tiled Entry
- Living Room with Glass Doors Opening to Balcony Overlooking Big Lagoon, Gulf Island National Seashore & Gulf of Mexico
- Upscale Kitchens with Solid Surface Countertops, Washer/Dryer Connections, Refrigerator/Freezer/Icemaker, Built-in Microwave & Kitchen Disposal
- Ceiling Fans
- Tiled Floors
- Community Amenities, Including Large Outdoor Swimming Pool, Cabana, Hot Tub, Fitness Center, Lobby, Computer Room, Sandy Beaches, Extensive Tropical Landscaping, Boat Slips & Temperature-Controlled Garages & Storage Units
This information is provided to show readers the deals that can be found in the Pensacola real estate market. Congrats to the winning bidders at the Harbour Pointe auction. Enjoy the beautiful views.
I’d like to thank Susan Carleton, broker of Pointe South Realty for sending me the table of values.
How do these condo prices compare with other condos sold recently in Pensacola? Look for that post to come soon.
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