By Les Christie
CNN staff writer
NEW YORK (CNNMoney.com) -- Nearly half of all Americans who claimed the first-time homebuyer tax credit on their 2009 tax returns will have to repay the government.
According to a report from the Inspector General for Tax Administration, released to the public Thursday, about 950,000 of the nearly 1.8 million Americans who claimed the tax credit on their 2009 tax returns will have to return the money.
The confusion comes because homebuyers were eligible for two different credits, depending on when their homes were purchased.
Those who bought properties during 2008 were to deduct, dollar for dollar, up to 10% of the home's purchase price or $7,500, whichever was less. The catch: The money was a no-interest loan that had to be repaid within 15 years.
Had they waited to buy until 2009, they could have gotten a much sweeter deal. Congress extended the credit and made it a refund rather than a loan.
Now, the IRS is developing a strategy for separating the 2009 taxpayers who are required to repay the credit from those who are not.
A review by the Inspector General earlier this year found that the IRS could not easily distinguish between home purchases made in 2008 and 2009. That heightened concerns that some claims could be erroneous or even fraudulent, that buyers could, for example, claim their purchase came later than it actually occurred.
Thursday's release reported that 73,000 claims, more than 4% of the 1.8 million homebuyers who received the credit, had incorrect purchase dates recorded by the IRS.
Some of the inaccuracies counted against the taxpayers, Nearly 60,000 were listed as purchasing in 2008 (meaning they had to repay the credit) or had no purchase dates at all, rather than their correct 2009 purchase dates, which would free them of the obligation to pay it back.
It is also taking a look at all those deceased taxpayers who received credits.
The inspector general reported that 1,326 single people listed as dead by the Social Security Administration claimed more than $10 million in credits. The IRS threw out 528 of those 1,326 claims, saving $4 million.
Homekeys searches high and low every morning and throughout the day for the latest in real estate related news because the more informed we are, the better we can help you. Here on this blog, we take that news and deliver it to you.
Sunday, September 12, 2010
Saturday, September 11, 2010
Chinese drywall was so bad supplier wouldn't take it for free Read more: http://www.miamiherald.com/2010/06/04/1664344/so-bad-supplier-wouldnt-take-i
Miami-based Banner Supply was so uncomfortable with Chinese-made drywall, the company wouldn't even take it even if it was free, a company executive testified late last month.
That revelation, along with a confidential agreement between Banner and Chinese drywall manufacturer Knauf Plasterboard Tianjin made in 2007 became public Friday, when they were unsealed by Miami-Dade Circuit Court Judge Joseph Farina.
The unsealed documents will play a key role in the first jury trial in the country over Chinese drywall, which begins Monday in Miami-Dade Circuit Court. At issue is drywall linked to corrosion in homes across the U.S., including many in South Florida.
Local and federal lawsuits contend many companies in the drywall production and supply chain intended to deceive consumers.
``Why is it that KPT is still fighting homeowners in the United States? Why not do for Jason and Melissa Harrell what they did for Banner Supply?'' said Miami attorney Victor Diaz, who represents the Harrells and other clients affected by Chinese drywall.
Under the confidential arrangement unsealed Friday, KPT agreed to substitute Banner's remaining supply of drywall from China at no charge, and Banner not say a word to anyone about the switch.
In a statement Friday, KPT said it did not have information from other customers that there were complaints of odor in the company's drywall sold to those customers.
Several months after KPT struck a deal with Banner to swap out Chinese-made drywall with domestic, KPT offered to give Banner the product.
``They offered me the drywall for free and I said no,'' Banner executive Donald ``Mickey'' Coblentz said in a deposition. ``I go, `You take care of your board. I don't want it.' ''
According to the deposition, Coblentz said he explained the situation to a KPT employee like this: ``I said to him if I was a lawyer, OK, I would open this case and close it. Opening arguments would be my closing. I'd go to the jury. I'd take a piece of that drywall, the Chinese, have them smell it. Give them a piece of American, have them smell it. And I'd say at the end what house do you want to live in.''
In an interview Friday, Banner attorney Michael Peterson said his company is a victim alongside homeowners. His company turned to KPT when installers told Banner there was a smell coming from some of the drywall.
KPT tested the product -- including for the emission of sulfur compounds now blamed for the product's corrosive effects -- and found no health risk.
``Banner as a distributor is not responsible for testing its products,'' Peterson said. ``We, just like the homeowners, expect [KPT] to step up and pay for the damage.''
Homeowners Armin and Lisa Seifart of Miami are among those suing Banner -- and whose case goes to trial Monday.
The documents establish ``that the defendant had actual knowledge with the problems with the drywall . . . that Banner wanted to take care of itself and nobody else,'' said Miami attorney Ervin Gonzalez, who is representing the Seifarts. ``In essence, KPT recalled the product for [Banner]. Banner didn't have the courtesy to recall the product for it's own customers.''
Read this article at it's source: The Miami Hearald
That revelation, along with a confidential agreement between Banner and Chinese drywall manufacturer Knauf Plasterboard Tianjin made in 2007 became public Friday, when they were unsealed by Miami-Dade Circuit Court Judge Joseph Farina.
The unsealed documents will play a key role in the first jury trial in the country over Chinese drywall, which begins Monday in Miami-Dade Circuit Court. At issue is drywall linked to corrosion in homes across the U.S., including many in South Florida.
Local and federal lawsuits contend many companies in the drywall production and supply chain intended to deceive consumers.
``Why is it that KPT is still fighting homeowners in the United States? Why not do for Jason and Melissa Harrell what they did for Banner Supply?'' said Miami attorney Victor Diaz, who represents the Harrells and other clients affected by Chinese drywall.
Under the confidential arrangement unsealed Friday, KPT agreed to substitute Banner's remaining supply of drywall from China at no charge, and Banner not say a word to anyone about the switch.
In a statement Friday, KPT said it did not have information from other customers that there were complaints of odor in the company's drywall sold to those customers.
Several months after KPT struck a deal with Banner to swap out Chinese-made drywall with domestic, KPT offered to give Banner the product.
``They offered me the drywall for free and I said no,'' Banner executive Donald ``Mickey'' Coblentz said in a deposition. ``I go, `You take care of your board. I don't want it.' ''
According to the deposition, Coblentz said he explained the situation to a KPT employee like this: ``I said to him if I was a lawyer, OK, I would open this case and close it. Opening arguments would be my closing. I'd go to the jury. I'd take a piece of that drywall, the Chinese, have them smell it. Give them a piece of American, have them smell it. And I'd say at the end what house do you want to live in.''
In an interview Friday, Banner attorney Michael Peterson said his company is a victim alongside homeowners. His company turned to KPT when installers told Banner there was a smell coming from some of the drywall.
KPT tested the product -- including for the emission of sulfur compounds now blamed for the product's corrosive effects -- and found no health risk.
``Banner as a distributor is not responsible for testing its products,'' Peterson said. ``We, just like the homeowners, expect [KPT] to step up and pay for the damage.''
Homeowners Armin and Lisa Seifart of Miami are among those suing Banner -- and whose case goes to trial Monday.
The documents establish ``that the defendant had actual knowledge with the problems with the drywall . . . that Banner wanted to take care of itself and nobody else,'' said Miami attorney Ervin Gonzalez, who is representing the Seifarts. ``In essence, KPT recalled the product for [Banner]. Banner didn't have the courtesy to recall the product for it's own customers.''
Read this article at it's source: The Miami Hearald
Friday, September 10, 2010
Sinkholes drive Citizens' request for insurance rate hike
By Nirvi Shah
The Miami Herald
Although Florida has gone largely unscathed by hurricanes for the last five years, the state's property insurers, including state-run Citizens, are being swamped by a different kind of catastrophe: sinkholes.
A sharp increase in claims related to damage caused by collapsing earth -- including about 300 in South Florida, where sinkholes aren't usually found – contributed to Citizens' request for an average statewide 8.4 percent rate increase heard Tuesday by insurance regulators.
Rates could rise even higher in some parts of Miami-Dade and Broward counties, but could actually drop in coastal parts of both counties.
Comments are being accepted until Sept. 14; a ruling could come later this month.
During 2009, Citizens collected about $19.6 million in premiums for sinkhole coverage, but covered losses worth about $97 million. While sinkholes bring to mind the image of a home being swallowed by a circle of collapsing ground, said Paul Palumbo, Citizens' senior vice president of underwriting, no claims in the insurers history have been for a catastrophic loss.
Instead, they have been for damage including cracks in driveways and other parts of homes.
"You're not making money on homeowners insurance even in a non-hurricane year," Deputy Insurance Commissioner Belinda Miller said. "That's a lot of money."
In August, Insurance Commissioner Kevin McCarty requested that Florida insurers report data about sinkhole claims to his office by later this month.
"The Office has heard from the industry that there has been a substantial increase in the frequency of claims, and that these claims are being filed outside the traditional 'sinkhole alley' in Hernando and Pasco counties'," his office said in a statement. The results could lead to regulatory changes or requests for legislative action.
Claims for other damage, including fires, also contributed to the request for rate increases, along with the need to shore up Citizens' ability to pay claims in the event of a catastrophic storm. Citizens is the state's largest property insurer, with about 1.2 million residential policies -- including about 900,000 the insurer has absorbed since March and following the liquidation of at least two private insurers.
In some parts of Broward, the requested increase is about 11 percent, though coastal Broward could see a drop of about 10 percent. Miami Beach could see a 6 percent drop in rates, but Citizens wants an increase of about 11 percent in rates for most of the rest of the Miami-Dade.
Citizens says it needs to raise rates by larger percentages but is limited to raising rates by 10 percent.
Because the insurer can charge above the cap to pay for back-up insurance, some of the proposed hikes are slightly higher.
A rate increase would be the second-straight hike following a three-year freeze that ended in 2009. The new rates, if approved by the Office of Insurance Regulation, would take effect in early 2011, Palumbo said.
Steve Alexander, an actuary in the state's insurance consumer advocate office, said the exponential increase in sinkhole claims needs a hard look. To keep up with sinkhole payouts, Citizens would have to ramp up premiums from the current $20 million to about $140 million, Alexander said.
"With the 10 percent cap on premiums ... the concern is you're never going to get there," Alexander said. "Somebody needs to look at this problem and figure out a solution. It's a very, very serious problem. I think the 10 percent cap does not work for this coverage."
Citizens has paid nearly $13 million for 141 claims for sinkhole damage in Broward County since January 2008, spokeswoman Candace Bunker said.
Unlike other states, Florida's law about how far property insurance extends is unclear, said Lynne McChristian, of the industry-backed Insurance Information Institute.
"Cracks in your home -- that's not necessarily a sinkhole," McChristian said. But it can be difficult to prove exactly what the cause is. "There are more claims happening down in [South Florida], which is not an area historically known for sinkholes. That makes those claims even more suspect."
While Citizens is struggling to raise rates at a pace that would keep the insurer solvent in the event of a major storm, Chief Financial Officer Alex Sink and state Sen. Jeff Atwater, R- Palm Beach Gardens, have questioned some of Citizens' expenses.
Both want information about why the insurer did not go out for bid on more than 30 contracts, relying on an emergency exemption -- even though some of the vendors were given multiyear deals.
Read the full article at it's source: SunSentinel.com
The Miami Herald
Although Florida has gone largely unscathed by hurricanes for the last five years, the state's property insurers, including state-run Citizens, are being swamped by a different kind of catastrophe: sinkholes.
A sharp increase in claims related to damage caused by collapsing earth -- including about 300 in South Florida, where sinkholes aren't usually found – contributed to Citizens' request for an average statewide 8.4 percent rate increase heard Tuesday by insurance regulators.
Rates could rise even higher in some parts of Miami-Dade and Broward counties, but could actually drop in coastal parts of both counties.
Comments are being accepted until Sept. 14; a ruling could come later this month.
During 2009, Citizens collected about $19.6 million in premiums for sinkhole coverage, but covered losses worth about $97 million. While sinkholes bring to mind the image of a home being swallowed by a circle of collapsing ground, said Paul Palumbo, Citizens' senior vice president of underwriting, no claims in the insurers history have been for a catastrophic loss.
Instead, they have been for damage including cracks in driveways and other parts of homes.
"You're not making money on homeowners insurance even in a non-hurricane year," Deputy Insurance Commissioner Belinda Miller said. "That's a lot of money."
In August, Insurance Commissioner Kevin McCarty requested that Florida insurers report data about sinkhole claims to his office by later this month.
"The Office has heard from the industry that there has been a substantial increase in the frequency of claims, and that these claims are being filed outside the traditional 'sinkhole alley' in Hernando and Pasco counties'," his office said in a statement. The results could lead to regulatory changes or requests for legislative action.
Claims for other damage, including fires, also contributed to the request for rate increases, along with the need to shore up Citizens' ability to pay claims in the event of a catastrophic storm. Citizens is the state's largest property insurer, with about 1.2 million residential policies -- including about 900,000 the insurer has absorbed since March and following the liquidation of at least two private insurers.
In some parts of Broward, the requested increase is about 11 percent, though coastal Broward could see a drop of about 10 percent. Miami Beach could see a 6 percent drop in rates, but Citizens wants an increase of about 11 percent in rates for most of the rest of the Miami-Dade.
Citizens says it needs to raise rates by larger percentages but is limited to raising rates by 10 percent.
Because the insurer can charge above the cap to pay for back-up insurance, some of the proposed hikes are slightly higher.
A rate increase would be the second-straight hike following a three-year freeze that ended in 2009. The new rates, if approved by the Office of Insurance Regulation, would take effect in early 2011, Palumbo said.
Steve Alexander, an actuary in the state's insurance consumer advocate office, said the exponential increase in sinkhole claims needs a hard look. To keep up with sinkhole payouts, Citizens would have to ramp up premiums from the current $20 million to about $140 million, Alexander said.
"With the 10 percent cap on premiums ... the concern is you're never going to get there," Alexander said. "Somebody needs to look at this problem and figure out a solution. It's a very, very serious problem. I think the 10 percent cap does not work for this coverage."
Citizens has paid nearly $13 million for 141 claims for sinkhole damage in Broward County since January 2008, spokeswoman Candace Bunker said.
Unlike other states, Florida's law about how far property insurance extends is unclear, said Lynne McChristian, of the industry-backed Insurance Information Institute.
"Cracks in your home -- that's not necessarily a sinkhole," McChristian said. But it can be difficult to prove exactly what the cause is. "There are more claims happening down in [South Florida], which is not an area historically known for sinkholes. That makes those claims even more suspect."
While Citizens is struggling to raise rates at a pace that would keep the insurer solvent in the event of a major storm, Chief Financial Officer Alex Sink and state Sen. Jeff Atwater, R- Palm Beach Gardens, have questioned some of Citizens' expenses.
Both want information about why the insurer did not go out for bid on more than 30 contracts, relying on an emergency exemption -- even though some of the vendors were given multiyear deals.
Read the full article at it's source: SunSentinel.com
Thursday, September 9, 2010
Hopes Rise with Sale of Downtown Miami Condos
By Toluse Olorunnipa
Miami Herald
tolorunnipa@MiamiHerald.com
Residents and officials longing to see downtown Miami transformed into the nexus of a bustling, 24-hour city are beginning to see a little cooperation from the market.
Even as home prices have continued to drop across South Florida, downtown Miami -- the hub of the over-development that many believe sparked the housing market collapse -- seems poised for a comeback, a new study released by the Miami Downtown Development Authority shows.
The report found sales of downtown condos have accelerated during the first half of this year, and the inventory of empty new condos on the market is steadily declining. Prices are on the rise as well.
In the first six months of this year, there were 1,933 units sold in Miami's downtown area, which stretches from Brickell north to Midtown and from I-95 east to Biscayne Bay. That's an increase of 110 percent over the first six months of 2009, when 919 units closed.
``Downtown is an exciting place to be right now, with everything going on, and the report shows that people want to live downtown. They want to live in the heart of the city,'' said Leo Zabezhinsky, the DDA's manager of business development, real estate and research. Zabezhinsky moderated a downtown-themed discussion during the Greater Miami Chamber of Commerce's Real Estate Committee meeting on Tuesday.
The average sales price of a downtown home was $356,100 in the first six months of the year, up about 16 percent from the first two quarters of 2009, when the average unit sold for $306,700. For comparison, existing condo prices across Miami-Dade County dropped about 9 percent between June 2009 and June 2010 to $128,800.
The inventory of new, unsold condo units in the downtown area stood at an estimated 5,400 units as of June 30.
About half of the unsold units in the downtown area are in the Brickell area. The Central Business District, bounded by NE Fifth Street on the north and the Miami River on the south, contains nearly a quarter of the remaining new condo units.
At the current sales pace, downtown Miami's glut of new condos could be absorbed within the next 18 months, but there are a couple of caveats.
First, the DDA's numbers do not include the 870 units at the completed Mint at Riverfront and Paramount Bay buildings, currently empty but set to begin sales in the near future. Secondly, much of the sales activity has been generated by investors, who are largely expected to unload these properties back onto the market once prices rise and the housing picture brightens.
``Resale of investor-owned properties could continue for four or five years,'' said Craig Werley, president and owner of Focus Real Estate Advisors and one of the authors of the study.
In the meantime, those hoping that an active rental market can spur the type of downtown renaissance longed for by a growing group of supporters are encouraged by an occupancy rate inching towards 75 percent. The DDA's report shows leasing activity up 14 percent in the first six months of the year compared to 2009, with average rent down about 1 percent, to $1,787.
Another potential economic stimulator for the area, though still untested, is the arrival of the revamped Miami Heat team at downtown's AmericanAirlines Arena. With LeBron James, Chris Bosh and Dwyane Wade promising multiple championships, the effect on AAA's neighborhood could be transformative, said William Talbert III, president and CEO of the Greater Miami Convention and Visitors Bureau.
``Just think about all the restaurants that are going to open up,'' he said. ``You talk about a stimulus package -- that's one.''
But a number of major issues still hinder Miami's downtown from rivaling some of the other metropolitan hubs like Chicago and New York, said Sharon Dresser, co-founder of High Street Retail USA in Midtown.
The lack of flagship shopping destinations, inadequate public transportation between central downtown and areas like Midtown and the Design District and ``real or perceived'' safety issues all need to be addressed, she said.
``If you want to do serious shopping, you have to leave the downtown area,'' she said.
Read this article at it's source: The Miami Herald
Miami Herald
tolorunnipa@MiamiHerald.com
Residents and officials longing to see downtown Miami transformed into the nexus of a bustling, 24-hour city are beginning to see a little cooperation from the market.
Even as home prices have continued to drop across South Florida, downtown Miami -- the hub of the over-development that many believe sparked the housing market collapse -- seems poised for a comeback, a new study released by the Miami Downtown Development Authority shows.
The report found sales of downtown condos have accelerated during the first half of this year, and the inventory of empty new condos on the market is steadily declining. Prices are on the rise as well.
In the first six months of this year, there were 1,933 units sold in Miami's downtown area, which stretches from Brickell north to Midtown and from I-95 east to Biscayne Bay. That's an increase of 110 percent over the first six months of 2009, when 919 units closed.
``Downtown is an exciting place to be right now, with everything going on, and the report shows that people want to live downtown. They want to live in the heart of the city,'' said Leo Zabezhinsky, the DDA's manager of business development, real estate and research. Zabezhinsky moderated a downtown-themed discussion during the Greater Miami Chamber of Commerce's Real Estate Committee meeting on Tuesday.
The average sales price of a downtown home was $356,100 in the first six months of the year, up about 16 percent from the first two quarters of 2009, when the average unit sold for $306,700. For comparison, existing condo prices across Miami-Dade County dropped about 9 percent between June 2009 and June 2010 to $128,800.
The inventory of new, unsold condo units in the downtown area stood at an estimated 5,400 units as of June 30.
About half of the unsold units in the downtown area are in the Brickell area. The Central Business District, bounded by NE Fifth Street on the north and the Miami River on the south, contains nearly a quarter of the remaining new condo units.
At the current sales pace, downtown Miami's glut of new condos could be absorbed within the next 18 months, but there are a couple of caveats.
First, the DDA's numbers do not include the 870 units at the completed Mint at Riverfront and Paramount Bay buildings, currently empty but set to begin sales in the near future. Secondly, much of the sales activity has been generated by investors, who are largely expected to unload these properties back onto the market once prices rise and the housing picture brightens.
``Resale of investor-owned properties could continue for four or five years,'' said Craig Werley, president and owner of Focus Real Estate Advisors and one of the authors of the study.
In the meantime, those hoping that an active rental market can spur the type of downtown renaissance longed for by a growing group of supporters are encouraged by an occupancy rate inching towards 75 percent. The DDA's report shows leasing activity up 14 percent in the first six months of the year compared to 2009, with average rent down about 1 percent, to $1,787.
Another potential economic stimulator for the area, though still untested, is the arrival of the revamped Miami Heat team at downtown's AmericanAirlines Arena. With LeBron James, Chris Bosh and Dwyane Wade promising multiple championships, the effect on AAA's neighborhood could be transformative, said William Talbert III, president and CEO of the Greater Miami Convention and Visitors Bureau.
``Just think about all the restaurants that are going to open up,'' he said. ``You talk about a stimulus package -- that's one.''
But a number of major issues still hinder Miami's downtown from rivaling some of the other metropolitan hubs like Chicago and New York, said Sharon Dresser, co-founder of High Street Retail USA in Midtown.
The lack of flagship shopping destinations, inadequate public transportation between central downtown and areas like Midtown and the Design District and ``real or perceived'' safety issues all need to be addressed, she said.
``If you want to do serious shopping, you have to leave the downtown area,'' she said.
Read this article at it's source: The Miami Herald
Wednesday, September 8, 2010
Is latest government plan for underwater borrowers just more red tape?
By Paul Owers of SunSentinel.com
September 8, 2010 07:00 AM
Arguably the most revealing part of the Obama administration's latest plan for underwater borrowers is contained deep in an Associated Press story.
“Government officials acknowledge that getting the plan going will be complicated.”
Let's just say that’s not what homeowners want to hear from an administration whose previous attempts at fixing the housing mess were widely criticized for being ineffective and bogged down in bureaucracy.
The Federal Housing Administration is allowing lenders to give underwater borrowers refinanced loans backed by the government. The lenders must forgive at least 10 percent of the original mortgage amount.
Sounds good, but the program is voluntary for lenders. And it's not likely to help homeowners in places like Florida who are seriously underwater.
Tell us what you think.
September 8, 2010 07:00 AM
Arguably the most revealing part of the Obama administration's latest plan for underwater borrowers is contained deep in an Associated Press story.
“Government officials acknowledge that getting the plan going will be complicated.”
Let's just say that’s not what homeowners want to hear from an administration whose previous attempts at fixing the housing mess were widely criticized for being ineffective and bogged down in bureaucracy.
The Federal Housing Administration is allowing lenders to give underwater borrowers refinanced loans backed by the government. The lenders must forgive at least 10 percent of the original mortgage amount.
Sounds good, but the program is voluntary for lenders. And it's not likely to help homeowners in places like Florida who are seriously underwater.
Tell us what you think.
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