More than one-quarter (26 percent) of respondents said they are unsure whether damage caused by natural disasters is covered under their policy. In addition, more than one-third (36 percent) are unsure whether their policy will cover damage caused by a hurricane, the survey said. More than 40 percent are uncertain about earthquake coverage and 26 percent are unsure about flood damage.

Meanwhile, homeowners are not staying on top of their coverage. The survey found that 44 percent of homeowners had not revisited their insurance coverage in the past year—some not in the last 10 years, the survey said.

"It's not at all unusual for homeowners to get insurance coverage when they buy a house, but not revisit it for years," said Joseph Lacher, executive vice president of Travelers Personal Insurance. "There are so many things that can impact your coverage—remodeling, installation of burglar alarms, major purchases—but the survey suggests that few people are making sure that as those changes occur, their insurance remains in-synch with their lives."

Lacher noted that homeowners should review their coverage before they have a claim. "If something happens, being underinsured is an unpleasant surprise when coupled with a financial loss," he said.

Harris Interactive Inc., Rochester, N.Y., conducted the survey of more than 1,300 homeowners.
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ZipRealty introduced "Client Ratings," a feature where consumers can see reviews and comments posted by their peers about properties for sale.

The features allow home buyers and sellers to weigh in with their own reviews and ratings on most of the 900,000 homes listed on the Multiple Listing Service in ZipRealty's 19 active markets, including San Francisco, Los Angeles, Washington, D.C., Boston, Miami, Houston and Seattle, among others.

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Sky Financial Group Inc., Bowling Green, Ohio and Waterfield Mortgage Company Inc., Fort Wayne, Ind., will merge Waterfield into Sky Financial. A specific date for closing of the merger has not yet been determined.

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Indianapolis-based Ace Holding Co. will invest $3.6 million and add 245 jobs after receiving $965,000 in state and local incentives to expand its business. Nearly 175 of the new back office and professional services jobs will be located at 7820 Innovation Boulevard at 71st Street and Interstate 465 on the Northwestside while 70 more positions will be added at a current location near 10th Street and I-465 on the Westside.
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“The two main differences between one year ago and today are that the premiums are much higher and the deductibles are much higher for southeast coast windstorm coverage,” said Bernard Brown, president of Insurance Advisors LLC, Stamford, Conn. “It is any where from 25 to 30 percent up to 1,000 percent in terms of premium increases. For deductibles, they have gone uniformly from 3 percent of value to 5 percent of value and we are seeing quotes for 10 percent of value. That raises the question as to whether or not [a commercial property owner] even has insurance.”

Marc Racicot, president of the American Insurance Association (AIA), and former governor of Montana, said financial incentives should be maximized for home and business owners to physically secure their properties against weather-related disasters.

"A positive, much-needed legacy of Katrina's unprecedented destruction would be an active effort to better protect communities from Texas to Maine," Racicot said. “Among the specific steps that should be taken are enactment and enforcement of effective, appropriate building codes and land use policies, honestly reflecting the risks of coastal living through implementation of cost-based pricing for both private and public property insurance.”

“It is too late to do anything now about insurance,” Brown said. “No one is offering any policies at this point in time and they won’t until the end of November. The window has been shut on insurance availability for the most part. [Owners] cannot get a new policy. They can only get a renewal of the old policy if there is an existing property. With a new property acquisition on [an owner’s] plate, it cannot get coverage.”

Brown said other than California or large cities with terrorism concerns, insurance markets are softening and premiums are declining. Hurricane projection paths to determine insurance premiums in the southeast can go as high north as North Carolina. The current projection for tropical storm Ernesto is to hit Florida and move north, up the coast, through the Carolinas and into Virginia.

“More and more carriers are starting to ‘redline’ the northeast coast, all the way up to Boston. That is a trend right now because of all the concentration of values,” Brown said.

Pennsylvania Insurance Commissioner Diane Koken urged state property owners yesterday to review their insurance policies and the recovery strategies if their businesses suffer from weather-related property damage.

"It is essential for consumers to educate themselves and review their insurance policies long before a weather disaster strikes,” Koken said, noting that consumers should make certain that they have appropriate coverage for their homes or businesses. "Severe weather can strike at any time, and the lessons learned from previous storms and flooding can help us to be better prepared for whatever the future might hold."

Koken outlined a number of steps to prepare for a weather-related disaster, including:

• Taking an inventory of property, noting model numbers and serial numbers, and storing the information off the premises with a relative or in a safe-deposit box;

• Talking to an insurance agent about insurance options and possible gaps in current coverage;

• Learning facts about the different types of insurance policies that are available for homeowners, renters and condominium owners; and

• Learning facts about flood insurance. 

Koken said that many Gulf Coast homeowners learned last year that a standard homeowner policy does not include flood protection.
 
“Flood insurance is still available through the National Flood Insurance Program [NFIP],” Brown said. “But if [property owners] are buying commercial insurance, they are having the same problems as they had with windstorm—because they are linked…When I say windstorm insurance premium and deductibles, it is the same thing for the flood on the commercial side.”
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Love Funding Corp

The Hampton Inn, built in 1989, is a four-story, 126-room property located just off Interstates 90 and 91. The property is six miles from the Basketball Hall of Fame and within 20 miles of more than 15 colleges and universities.

The loan terms include a 6.42 percent interest rate, 10-year term and 25-year amortization.

Love Funding also closed on Almira Manor Senior Apartments in Greenville, Ill. The refinance loan for $1,641,700 was handled by Love Funding Vice President Robyn Cunningham.

Love Funding financed the property through HUD’s FHA 223(f) refinance loan program. The property previously held a 202 insured loan from HUD at an interest rate of 9.25 percent. Under the new terms, Love Funding secured a 5.75 percent fixed-interest rate for 27 years.

Almira Manor Senior Apartments was built in 1989 and consists of 40 units within a three-story building. The property is managed by St. Andrew’s Management Services.

Last month, Leonard Lucas, first vice president, secured $31.35 million in financing for the Silver Oak Portfolio and The Terrace at Mountain Creek, two separate transactions involving eight senior housing facilities.

The Silver Oak Portfolio loan of $27.15 million was funded for the acquisition of seven properties in Nebraska, Oklahoma and Texas. The properties have a combined unit mix of 345 independent, assisted and memory care units. The 10-year note included a combination fixed-rate and floating-debt.

The Terrace at Mountain Creek in Chattanooga, Tenn., a 114-unit assisted and independent living facility, was arranged as a refinance loan for $4.2 million with a portfolio lender. The refinance included initial funds to repay the expiring debt and funds for capital expenditures. The terms of the transaction included a three-year loan with a floating interest-rate and interest-only for one year.
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• McLean, Va.–based BearingPoint Inc.’s Lowell Alcorn and Tim Davis, managing directors, identified key considerations for lenders in capitalizing on this window of opportunity.

• A white paper, released by Xactly Corp., San Jose, Calif., discusses how spreadsheets used for financial reporting are scrutinized under the Sarbanes-Oxley Act Section 404 compliance mandates.

All this and more in MBA Tech NewsLink, a weekly look at mortgage technology issues from the Mortgage Bankers Association. MBA Tech NewsLink delivers value-added, original stories that don’t appear anywhere else. A subscription to MBA Tech NewsLink is free to employees of MBA member companies.

For free subscription information, email Gloria McCullough at gmccullough@mortgagebankers.org.
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The conference, organized by The Lending Industry Diversity Conference Inc., and co-sponsored by Compliance Technologies and Genworth Financial, is a forum for promoting racial and ethnic diversity in mortgage lending by providing information about industry careers and facilitating recruitment of college students and recent graduates. This year’s conference includes learning tracks; a reception on Capitol Hill; and a Career Fair.

Topics to be covered include:

• Minority workforce participation in the mortgage industry;

• Understanding market opportunities;

• Policies affecting minority homeownership; and

• Closing the gap: exploring effective solutions.

New this year is a congressional Reception on Capitol Hill (Sept. 27) and a Career Fair (Sept. 29). The industry is seeking to increase racial and ethnic diversity in order to better penetrate emerging markets. Each candidate will have an opportunity to meet and talk one-on-one with the nation’s fastest growing and leading mortgage lenders and other prospective employers who value diversity. Career paths include: loan production; marketing; credit analysis; secondary marketing; mortgage securitization; risk management; compliance management; loan administration; warehouse financing; internship programs; loan brokering and CampusMBA School of Mortgage Banking training. Participation in the Career Fair is free.

Who Should Attend:
• Minority-owned Mortgage Bankers, Brokers and Real Estate Professionals
• Wholesale/Retail Lenders seeking Minority Origination Sources
• Secondary Market Investors and Housing Finance Agencies
• Mortgage Insurance Companies
• Credit Unions
• Non-profit Housing Organizations
• Senior & Mid-Level Management
• Emerging Market Professionals
• Underwriting/Credit Policy Professionals
• Fair Lending Officers & CRA Officers
• Housing Policy Makers

To register online, go to https://guest.cvent.com/EVENTS/Register/IdentityConfirmation.aspx?e=9c0d5d6c-9406-4ad3-9d43-3bd7e4cb643f.

For more information about the conference, go to www.mortgageindustrydiversity.com/index.htm.
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MBA NewsLink: Are e-signatures as far along as you thought they would be at this point?

Huff: I think they are moving along in accordance with the timeline I had in mind. When adopting a new technology like this, it is not about the technology—it is about the disruption of the business process and how quickly the business process evolves to accept that new technology.

I have lived through a couple different iterations of this phenomena back when we started using PCs [personal computers], there was a very similar ramp-up period. When the fax machine was implemented…there was a very similar timeline there as well. I even watched the age of EDI come into processing manufacturing, albeit at a slow pace. I think the same will be true for the financial services industry—more specifically, the mortgage banking industry as we adopt the implementation of e-signature technology in various pieces of the organization.

Based on my experience, it always seems as though the low hanging fruit gets grabbed first. In our example, it was on the origination side. Loans are taking the process of being electronically christenated and that is kind of the low hanging fruit. Now, for the first time ever, eLynx and others are using the e-signature process to originate loans electronically. Instead of traditionally sending Fedex or UPS packages out to the homebuyer or a mortgage inquirer, we are now capturing that content electronically and presenting it on the Web and collecting electronic approval in minutes versus the three-to-six days involved in that process early on. That is right now catching a big wave in the e-signature adoption timeline. That is usually the first thing that happens in any adoption. In new technology, there is usually an obvious application of that technology that is very rarely, if ever, what people envision as the ultimate possibilities for that technology. That is what is going on now.

MBA NewsLink: How did you view this year going into it?

Huff: I thought that 2006 would involve a great number of participants grabbing the ‘low-hanging fruit’ and that is precisely what is happening.

MBA NewsLink: Does a loan need to be an e-mortgage to have an e-signature?

Huff: In order to take advantage of e-signature technology, absolutely not. It doesn’t have to be an e-mortgage at all. There are many areas where e-signatures are being applied in the broader financial services space that don’t involve the e-mortgage…The origination—delivering the RESPA docs out to the homebuyer and getting signed approval of those documents—that is the first place in which e-signatures are being applied. It doesn’t have to be an e-mortgage at all to realize the benefits of e-signatures.

MBA NewsLink: Since the E-SIGN Act was put into effect more five years ago, how long do you think it will take until e-signatures are widely accepted in the mortgage industry?

Huff: As dangerous a question as that is, everyone has a different opinion. I’ll make my statement by saying I think it will be at least another five years before we will see any meaningful acceptance or meaningful traction of [e-signatures] widely used in mortgages.

MBA NewsLink: Will title agents need to be the ones to adopt the e-signature technology for closings? Will the settlement attorneys make that adoption?

Huff: Yes, I think that is what you’ll see in the next five years. I think you’ll see the bigger title insurance underwriters like the Stewart Title’s and the First American’s have their own versions of what they call ‘closing rooms’ that they will offer up for lenders to use. The 80-20 rule will apply—80 percent of the volume is probably 20 percent of the settlement agents and [that] 20 percent consists of the large underwriters. I think they will be the ones to introduce their own versions of e-signature technology. That will help drive the adoption.

I think that secondary part—small, locally-owned and operated settlement agents or attorney’s offices—I think they will be the trailing participants, and I think you will see them in that post-five-year timeline.
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