MORTGAGE DEBT FORGIVENESS – Americans who lose their home to foreclosure or bankruptcy no longer have to pay income taxes on any debt forgiven by the bank. A bill signed by President Bush yesterday voids the Internal Revenue Service practice of considering the bank’s write-off on the loan a taxable form of income for the family that already lost a home.

PRIVATE MORTGAGE INSURANCE – President Bush signed legislation yesterday that extends the Internal Revenue Service tax deduction for private mortgage insurance (PMI) premiums. Qualified borrowers get the deduction for mortgage originations between 2007 and 2010.

MORTGAGE RATES – Mortgage rates edged up for a second straight week and 30-year loans reached their highest level, 6.14 percent, in a month, according to Freddie Mac’s weekly nationwide survey.

2007’s TOP REAL ESTATE STORIES – What were the top real estate stories of 2007? The slowing home sales market heads the list, followed by Florida-specific concerns – real estate taxes and homeowners insurance – along with troubles in the mortgage market and, finally, a proposed Hometown Democracy constitutional amendment that could go before voters in 2008. Here are the issues that shaped Florida’s real estate world in 2007 and a glimpse at what the New Year holds.

For more information about Hometown Democracy you may want to look at these resources:

Tommy at Sticks of Fire: a Tampa blog writes: "I’m sure you have heard of Hometown Democracy. Citizens tired of unchecked development and rampant growth have put together a constitutional amendment to make sure that nearly each and every property improvement is voted on by citizens like you. …."

J. Miller at Daytona Beach News – Journal – writes "The adversaries in the battle over changing Florida’s rules for handling growth make no secret of their disdain for one another–or the fact that they’re in a no-holds-barred campaign.  …."

"For the next many months, the phrase Hometown Democracy is likely to pop up in the news and on many streetcorners as proponents of the initiative seek to change the state constitution to require residents to vote on land-use changes. Florida was once ruled by insider deals until the Growth Management Act imposed a more scientific regimen…" You read more on the It’s Your Time blog.

REAL ESTATE TAXES – Florida House Speaker Marco Rubio is speaking around the state in support of a citizens’ constitutional amendment that, if passed, would cap property taxes at 1.35 percent of taxable value. “It’s a grassroots campaign and I am absolutely committed to helping however I can,” Rubio said.

HOMEOWNERS INSURANCE

Florida Governor Charlie Crist has asked three trial lawyers to review the property insurance industry’s compliance with the 11-month-old reform plan and recommend whether to sue the insurers for failure to deliver the 24 percent rate reduction it promised. Meanwhile, Allstate is pursuing its request for a rate hike.

MORTGAGES

What if you make a law and no one enforces it? The Federal Reserve proposed changes this week to guard against deception and fraud in mortgage lending, but the two biggest sources of abuse – mortgage brokers and non-bank lenders – were, and are, regulated at the state level.

FANNIE MAE

It’s a real estate conspiracy theory: The former Chief Executive Officer of Fannie Mae claims the Bush administration helped orchestrate an accounting scandal that cost him his job. He describes in court documents an unofficial White House task force dubbed “Noriega” charged with weakening Fannie Mae and driving down its stock price.

UNDERSTANDING REAL ESTATE TAXES – The latest research provides a better understanding of Florida’s real property tax system by analyzing the various property owner-groups – residential homestead, residential non-homestead, commercial, industrial, agricultural and others – in 10 representative counties, including Bay, Citrus, Dade, Flagler, Hillsborough, Lafayette, Leon, Okaloosa, Orange and Palm Beach. The study also reviews and analyzes the four major components included in the constitutional amendment that Florida voters will consider at the ballot box in January.  Real estate tax study.

HOMEOWNERS INSURANCE – Cheaper insurance rates? Maybe. A Florida rule change that received preliminary approval yesterday would enable foreign-based backup insurance companies to better compete with national insurers. Regulators hope that the increased competition will bring lower insurance rates.

MORTGAGES – The Federal Reserve endorsed new rules Tuesday that would restrict lenders from penalizing risky borrowers who pay loans off early, require lenders to make sure money is set aside to pay for taxes and insurance, and bar lenders from making loans without proof of a borrower’s income.

FORECLOSURES – A surprising new monthly report suggests that United States home foreclosures declined 10 percent in November. “This could indicate that foreclosure activity has topped out for the year,” says RealtyTrac Chief Executive Officer James Saccacio. But “the true test of whether this ceiling will hold will come at the beginning of next year.” Florida, with one filing for every 282 households, ranked second nationwide.  Although Florida ranks second – prospective buyers need to assess the foreclosures within a particular town, city or county as each one does have higher or lower foreclosures than another area.

MY SAFE FLORIDA HOME – The My Safe Florida Home program has spent the majority of its money, despite being short of its target goal of 400,000 free hurricane inspections.

SUBPRIME MORTGAGES – United States Treasury Secretary Henry Paulson says the Bush administration remains opposed to any type of government bailout when it comes to dealing with the mortgage crisis. “I think what we need is to help the markets work the way they’re intended to work and avoid those foreclosures that are preventable,” Paulson says.

FORECLOSURES – What’s the primary cause of foreclosures? So far, evidence seems to point to the usual culprits: job loss, sickness and divorce, instead of ARM resets. Data from Countrywide Financial Corp. shows that almost 60 percent of the lender’s loan defaults in the first 10 months of this year were due to customers having their income cut; just under 2 percent resulted from ARM payment adjustments.

IS EVERYBODY HAPPY? – Despite turmoil in the mortgage market in 2007, borrowers’ overall satisfaction with the mortgage lending industry has remained steady since 2006, says J.D. Power and Associates’ 2007 Primary Mortgage Origination Study. The study measures customer satisfaction with application approval, interaction with loan representatives, closing and problem resolution. “While it’s true that borrowers with weaker credit and those seeking larger ‘jumbo’ loans experience longer approval times and requests for more documentation, satisfaction has remained steady among the 75 percent of mainstream borrowers with good credit applying for moderately sized loans,” says Tim Ryan, senior director of the mortgage practice at J.D. Power. The study concluded that consumers were more satisfied when they worked directly with the lender rather than through a broker. It also found that customers who demand clear communication from their lender are more likely to get it. And customers who supply required documentation upon application have a smoother loan process. The overall mortgage lender satisfaction ranking was based on a 1,000-point scale:

Wachovia, 827
SunTrust Mortgage, 818
Bank of America, 760
National City Mortgage, 759
CitiMortgage/Citibank, 753
Chase, 752
Industry Average, 750
Wells Fargo, 749
Countrywide Home Loans, 745
GMAC Mortgage, 744
ABN AMRO Mortgage, 740
American Home Mortgage Corp., 736
WaMu, 733
First Franklin, 595

HOUSING STARTS – Housing construction fell in November and single-family activity dropped to the lowest level in more than 16 years, according to numbers released this morning by the U.S. Commerce Department.

PROPERTY MANAGEMENT – Turmoil in local housing markets could move to the rental market in the form of stalled apartment construction, growing number of renters and record-high rents. But many recent investment homebuyers find they still cannot charge enough rent to cover the mortgage.