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April 24, 2006

ForeclosureS.com: South Florida Condo Market May Collapse, Sparking Wave of Foreclosures

SACRAMENTO, Calif.--(BUSINESS WIRE)--April 24, 2006--California based ForeclosureS.com, a real estate investment advisory firm specializing in distressed property and nationwide foreclosure property listings, reported that a combination of overbuilding and rampant speculation in the South Florida condo market could lead to a severe price correction.

"According to a recent study by the PMI Group, the Miami metro area has a 32.7% chance of a price correction in the next two years," said ForeclosureS.com president Alexis McGee, adding, "but the condo market appears to be much more vulnerable than that."

Citing a recent report in Forbes magazine, she said that 25,000 condos were under construction in the Miami-Dade area, more than the total that have sold in the last nine years, and that speculators held 75% of them.

"Local realtors there report that the speculators were selling to each other," said Ms. McGee. "We've seen that before, in Phoenix, AZ and Las Vegas, NV. Sooner or later they come to the end of the line and foreclosures jump.

"Foreclosures are already happening at twice the national average," she pointed out, adding that the number unsold condos in that area has reportedly doubled in the last year.

ForeclosureS.com has been tracking housing markets, assisting foreclosure investors since 1992 and publishes foreclosure property lists nationwide.

"Our goal," said Ms. McGee, "is to help investors locate homeowners in distress and create win-win solutions to their problem that benefit both the homeowner and investor." She went on to say that she applauded the efforts of local and state law enforcement agencies to put a stop to so-called foreclosure rescue scams. She added, "Those people are simply crooks, bent on fleecing people in distress out of money and property. There is an honest and ethical way to deal in foreclosures, and that's what we teach and what we do."

Ms. McGee pointed out that Florida's rapid population growth might mitigate a price correction somewhat. "1000 people a day are reportedly coming into the state, but not all of them are going to buy half million dollar condos," she stated. "That market is getting seriously overbuilt."

She added that, with such rampant speculation going on, there wasn't much her investor clients could do but stand by and watch. "It's very possible that our clients will wind up helping as many lenders as homeowners when properties start going back to the banks," Ms. McGee concluded.

Nation's Insurance Commissioners Offer Consumer Tips on Homeowner's/Renter's Insurance

KANSAS CITY, Mo., April 24 /PRNewswire/ -- As the home selling season swings into high gear and many people begin Spring home improvement projects, the National Association of Insurance Commissioners (NAIC) has compiled a wealth of information about homeowner's and renter's insurance for individuals and families-all organized by life stage needs and available at the NAIC's newly launched consumer education web site, http://www.InsureUonline.org.

Most Americans -- approximately three quarters -- insure their homes and personal possessions against fire, theft and other damages, according to a recent NAIC consumer survey. However, there's one notable exception: young singles. Only 34 percent of Americans who own a home or rent an apartment at this life stage have homeowner's or renter's insurance.

Homeowner's insurance covers a home's physical structure and the owner's personal property. In contrast, renter's insurance only protects personal property. Everyone -- homeowners and renters -- benefits from liability coverage, which provides financial protection in case others are injured while visiting their home.

"Understanding your options with regard to homeowner's/renter's insurance is the first step in making sure you get the right type and amount of coverage to fit your individual needs," said Alessandro A. Iuppa, NAIC president and Superintendent of the Maine Bureau of Insurance. "We've identified many of the key considerations by life stage on the NAIC's Insure U web site."

Important Considerations for all Homeowners/Renters

Consumers should understand the major factors that affect their homeowner's/renter's insurance costs:

* Where a consumer lives makes a big difference in the cost of coverage.
People in states prone to hurricanes, high winds and/or hail typically
pay higher premiums for homeowner's insurance, as those risk factors
have a big impact on insurance costs. According to the most recent NAIC
data, in 2003 the average cost to insure a home was $668.

* Many consumers are not aware that they have the option to insure their
home and belongings for either the replacement cost or the actual cash
value. Actual cash value is the amount it would take to repair a home or
replace damaged possessions after factoring in depreciation. Replacement
cost is the amount it would take to repair a home with materials of
similar kind and quality, or to purchase new possessions without
deducting for depreciation. Understandably, insuring property to cover
replacement costs is more expensive than insuring it for its actual cash
value, but may be worth the difference if a consumer can afford the
higher premiums.

* Another simple tip that can save consumers time and aggravation if they
ever need to file a claim: make an inventory of personal belongings and
save receipts for major items, along with a photograph or video of each
room. This documentation should be stored in a safe place outside the
home, such as a safe deposit box, in case the dwelling is destroyed.

* As many consumers learned from last year's violent hurricane season,
damage to a home or belongings caused by flooding is NOT typically
included in a homeowner's policy. Consumers who live in areas prone to
flooding should inquire about flood insurance through the federal
government's National Flood Insurance Program (NFIP).

* People who own expensive valuables-like jewelry, antiques or art-will
probably want to purchase an endorsement to their homeowner's policy, as
these types of valuables are typically not covered by basic policies.

Tips to Help Consumers Lower their Homeowner's or Renter's Premiums

Many factors that affect insurance costs are within the control of consumers:

* Shop around and compare the costs of comparable coverage from different
insurers to get the best value.

* Install smoke detectors in key locations; keep fire extinguishers handy,
especially in the kitchen.

* Install dead-bolt locks and a burglar alarm system, particularly one
that directly contacts the police or fire department or an external
monitoring service.

* Keep up a solid credit history, as many insurance companies offer better
rates to individuals with good credit ratings.

* If you can absorb the higher out of pocket expenses in the event of a
loss, select a policy with a higher deductible (the amount not
reimbursed by your insurance); the higher the deductible, the lower the
premium.

* Consolidate homeowner's and auto policies with the same insurer to
qualify for a multi-policy discount.

Homeowner's/Renter's Insurance Tips for Different Life Stages

At different life stages, consumers' homeowner's/ renter's insurance needs are likely to change. For example:

* Young singles, who typically rent rather than own and may have one or
more unrelated roommates, should know that each leaseholder needs
his/her own individual renter's policy to protect his/her own
possessions and against liability for accidents that happen on their
premises.

* Young families who may be buying their first home should know that in
most instances it only makes sense to insure their home itself and
belongings-not the land on which the home sits. Also if they install a
swing set or trampoline for their kids, they should consider additional
umbrella liability insurance to cover them in the event a visiting child
is injured while on their property.

* Established families that may be remodeling or building an addition to
their home should update their homeowner's policy to reflect these
enhancements, particularly if they add $5,000 or more to the value of
their home.

* Seniors should ask if they are eligible for discounts. And if they've
just paid off their mortgage-and their homeowner's insurance was
previously paid through their mortgage company-they need to alert their
insurance company to send the premium bills directly to them and to pay
on time so that their homeowner's policy doesn't lapse.

"All consumers need to protect themselves from being scammed by fake insurance companies selling bogus insurance policies," noted Catherine J. Weatherford, NAIC Executive Vice President and CEO. "All they need to do is take a few minutes to stop, call their state insurance department and confirm that a company is legitimate and authorized to sell insurance in their state before purchasing insurance."