Saturday, December 01, 2007

Catastrophe Fund Backed To Insure Coastal Homes While Deductibles Skyrocket

As a homeowner on Martha's Vineyard Island, living on the water, I can tell you I have felt the bite of insurance companies backing away from so-called high risk locations. Before I was forced into the Massachusetts Fair Plan, a representative from my home owners insurance provider came to my house and subsequently I received a terse letter saying if I did not remove and cut back all the trees that were close to me house, the insurance provider, Vesta would cancel my insurance. I was bewildered and called my local insurance agent. I was surprised when my agent told me to ignore it because --- Vesta was going to cancel me anyway. They filed for protection with the US Bankrupcy Court, and became another casualty of the disastrous hurricane season in 2005.

According to an editorial in the Boston Globe reported by Bruce Mohl, "A special legislative commission called for the creation of a state-run catastrophic event fund to help reduce the cost of home insurance in Massachusetts. Few details were provided in the report, but the fund would be set up to sell reinsurance to companies at below-market rates. Industry officials participating on the commission dissented from the majority view, saying the fund would drive up insurer costs. Consumer groups also dissented, saying they wanted caps on the increases being sought by the Massachusetts Fair Plan, the home insurer of last resort. Insurers have been canceling policies or raising premiums along the coast on fears of a major hurricane. The Fair Plan provides coverage for about 40 percent of homes on the Cape and islands."

In the meantime, as of December 15, 2007 many residents of Martha's Vineyard insured under the Massachusetts Fair Plan will have the highest windstorm and hail deductibles in the country, up from a minimum of two to five percent. The increase will affect homes valued up to $500,000.
Follow this link to read > Bills Grow Larger For Home Insurance

Relief in Sight for Some Massachusetts Home Owners

You've all read countless articles and tales of woe and devestation caused by the subprime mortgage market debacle. The predatory behavior of many mortgage companies coupled by the lack of understanding of borrowers who either did not fully understand what they were getting into or were sold a bill of goods by the lenders has wiped out many homeowners.

In Massachusetts alone there are 24,650 adjustable rate mortgages due to reset at the beginning of 2008. However, there appears to be good news on the horizon for some > Subprime mortgage rates could be frozen for some .

In addition, an Associated Press release just reported that Governor Deval Patrick has signed a measure seeking to slow the state's recent spike in home foreclosures. According to the Governor, the new law gives Massachusetts one of the nation's most consumer-friendly mortgage lending statutes. The legislation requires mortgage companies to file a 90-day notice of intent to foreclose with the homeowner and the state. Borrowers would be required to receive consumer counseling before obtaining certain high-cost mortgages. Grants totaling $2 million would establish 10 education centers statewide and promote first-time home buyer and foreclosure counseling. (AP)