Jeff Baxter

On October 1, 2009, important changes to the National Flood Insurance Program (NFIP) will take effect. There will be an increase in rates, the standard deductibles will increase, and the basic insurance limits will increase. However, the total coverage available will stay at a $250,000 maximum. These combined changes will result in an average premium increase of 8 percent. The increases will apply only to policies that are written or renewed after October 1, 2009.

I'm going to include much of the detail from the FEMA announcement, so please bear with me. The increase in the minimum deductible and the rate increases are the most important aspects of this annoucement. It's also interesting that they are finally doing away with the paper maps.

For more information about the NFIP, please visit www.FloodSmart.gov.

The standard deductible of $500 is being discontinued for all properties. The new standard deductible for Post-FIRM (Flood Insurance Rate Map) properties will be $1,000 and Pre-FIRM properties will be $2,000. Owners of Pre-FIRM properties have the option to buy back the $1,000 deductible within 60 days of the renewal of their flood insurance policy. Otherwise, deductibles cannot be reduced midterm unless required by the mortgagee. It is important to remember that there is a 30-day waiting period unless it is a requirement for loan closing. In most cases the deductible is only a fraction of the average flood insurance claim, which can be substantial.

Just as with other lines of insurance with high claim potential, such as wind insurance, it is not unusual for minimum deductibles to increase to foster the soundness of the program. The NFIP's previous deductibles were in place for almost a decade. In taking inflation into consideration over time, the new standard deductibles being changed effective October 2009 are comparable in value to the previous deductibles when they were first established.

• The basic insurance limits are also increasing for all categories of buildings and contents:
• The basic limit for 1-4 Family Dwelling Coverage will increase from $50,000 to $60,000. Additional insurance limits are $190,000 for a total limit of $250,000.
• Other Residential Building Coverage basic limit will increase from $150,000 to $175,000 with additional insurance limits of $75,000 for a total limit of $250,000.
• Non-Residential Building Coverage will increase from $150,000 to $175,000 for the basic limit. Additional insurance limits are $325,000 for a total of $500,000.
• Residential Contents Coverage basic limit will increase from $20,000 to $25,000. Addition limits are $75,000 for a total insurance limit of $100,000.
• Non-Residential Contents Coverage basic limit will increase from $130,000 to $150,000. Additional insurance limits are $350,000 for a total insurance limit of $500,000.

The premium increases vary by Zone. V Zones are coastal high-velocity zones and will have larger rate increases as a result of the Heinz Center's Erosion Zone Study, which clearly indicates that current rates significantly underestimate the increasing hazard from steadily eroding coastlines. The premium increases by zones are as follows:

V Zones

V Zone premiums will increase 10 percent.

A Zones

A Zones, which are non-velocity zones that are primarily riverine zones, will increase by 8 to 10 percent.

• Post-Firm A1-A30 and AE Zones will increase 10 percent.
• Pre-FIRM AE Zones premiums will increase 10 percent to decrease the amount of subsidy in our Pre-FIRM rate.
• AO, AH, AOB, and AHB, which are shallow flooding zones, will have an 8 percent increase in premiums.
• Unnumbered A Zones, which are remote A Zones where elevations have not been determined, will have increase of 10 percent in premiums.
• A99 Zones, which are approved flood mitigation projects, e.g., levees still in the course of construction, and AR Zones will have premium increases of 10 percent.

X Zones and Miscellaneous

• X Zones, which are zones outside the Special Flood Hazard Area, will have an increase of 8 percent for a Standard Risk Policy and no increase in premiums for a Preferred Risk Policy (PRP).
• Mortgage Portfolio Protection Program (MPPP) will have an increase in
  premiums of 10 percent.

Discontinuance of Paper Flood Insurance Rate Maps

Effective October 1, 2009 FEMA will discontinue the distribution of paper maps. The paper maps will be replaced with Digital Flood Insurance Rate Maps (DFIRMs). Replacing the paper map products with digital versions is more environmentally friendly and will improve the usability of FEMA's flood hazard data. It also provides users with a more powerful tool for insurance activities and flood risk management.

Jeff Baxter - Mortgage Banking at the Beach

SCAOR (Sussex County Association of Realtors) sponsored a fun, if rain filled, evening at Jungle Jim's in Rehoboth Beach this past Friday to raise money for RPAC - the Realtor Political Action Committee. Most of the local real estate offices purchase an "Office Duck" to decorate and race as a way to raise money. I decided that Prosperity Mortgage would do the same and challange the real estate offices I service and support. My Pirate Duck, the Rate Slasher, is seen here.

It was down to the wire as office ducks jockey for top duck; small ducks vie to win prizes. Which office had the most REALTORS® attending?..... It was time for the Prosperity Mortgage Pirate Duck to emerge from seclusion and have a little fun.

Although we missed out winning the Dapper Duck Award for "best dressed" to Little Miss RPAC 2009 submitted by the Rehoboth Beach Long and Foster office, I think the trophy was stolen. Here's a picture of Little Miss RPAC and I'll let you decide.

Regardless, the evening was a blast and my Pirate Duck came in 3rd in the overall office duck race, handily beating Little Miss RPAC and the entry from my other Long and Foster office in Bethany Beach - Biker Chick.

Individual realtors also purchased ducks and raced them as well. Entertainment was provided by a steel drum band and everyone had a great time.

Events like this are always a fun way to blow off steam and get aways from the pressures of the business we're in. Whether selling houses or loans, this market can make us all a little crazy.

I produced a "virtual tour" of the event for everyone that couldn't make it in person. Hope you enjoy it:

Click Here for the Show

Jeff Baxter - Mortgage Banking at the Beach

The "end of summer" at the beach is actually the beginning of some great weather conditions at the shore. September and October are generally very mild and sometimes we even get some nice beach days. The real estate market has picked up considerably over the past 4-6 months and sales are definately happening. The mix of my business with regard to refinance mortgages versus purchase money mortgages has firmly turned in favor of the purchase side of things. We closed 14 loans in August and 10 were purchases, including 3 jumbo mortgages.

Now, I'm not talking about short sales and REO properties. Some buyers are still searching for "deals" on the distressed side of the market, but it's not easy. You will more than likely wait and wait for contract acceptance by the lending bank, while other buyers get great deals on non-distressed sales. None of the purchase loans I closed this summer were on short sales or bank owned properties, yet that seems to be all the media talks about.

I'm looking forward to a great Fall season at the beach. If you are looking for a vacation home or investment property, I can recommend the best realtors in the area. If you want to discuss restructuring your current mortgage, give me a call as well. Mortgage rates are still very low - even lower than 2 months ago. I hope you had a great summer and I look forward to speaking with you about your financing needs. All the best!

In the summer of 2002, Peter "Wolf" Toff drove into the seaside resort of Bethany Beach in his Winnebago. He arrived at the City Hall wearing cut-off jeans, a beer t-shirt and a deep golden tan, remembers Bethany City Council Woman Margaret Young.

Young did not envision the Hungarian-born Toth, a sculptor who had carved more than 60 statutes of American Indians throughout the United States and Canada, to be so laid back.

But laid back and easy going has been a way of life for Toth since 1972, when he completed his first scuplture of a American Indian, carved from the cliff of Wind and Sea Beach in La Jolla, Calif. While completing his second sculpture, in Sand Run Park in Akron, Ohio, he made a life-changing decision.

"I will make a sculpture of an Indian, to honor them, in each of the fifty states," he reportedly decided according to www.dcschumaker.com, a site that chronicle's the artist's work.

Toth identified with the American Indians and sought to honor them through his works. The son of an artist, Toth spent much of his early childhood living in fear in Hungary. A 1956 uprising, allowed him, his parents and 10 siblings, to escape the country. The family spent years in refugee camps before finally immigrating Akron, Ohio.

Once he made the decision to carve the sculptures, which he calls "Whispering Giants," Toth set off in his "whisper" mobile and landed in Bethany in 1976. Toth first approached Rehoboth Beach about building a statue there, but the city declined his offer. Bethany readily accepted, said Young.

The statue stood for more than a decade and became a focal point for the town center.

"It lasted a decent amount of time, then the termites got it," said Young.

The city lived without a totem pole for a few years. Then in 1994, the city council commissioned Dennis Beach to build a new one.

"One Christmas the city put a Santa Claus hat on the statue," Young said. "The Indians raised cane. They didn't think it was cute or funny."

Within a few years, termites destroyed that statue from the inside out.

In 2002, the city commissioned Toth to build a replacement statue. The statue cost the city $36,647. Toth received $15,000. The wood cost $14.757 and installing and securing the sculpture cost $6,890.

Toth carved the statue out of Pacific Northeast Redwood, which naturally repels termites. The city expects the three to last between 50 and 150 years, Young said.

This is Toth's dream, as well.

"With proper care my statues should be around for a long time," he told www.dschumaker.com. "Years... maybe decades after I'm gone."

(Story originally published in Coastal Sussex Weekly.)

If you own rental property in Bethany Beach, get ready for a new town mandated safety checklist to protect your tenant's (even weekly summer visitor's) safety.

Bethany Beach Town Council members voted 5-1 at their Jan. 16 meeting to adopt the new safety checklist, which will be sent out to property owners each year as part of their rental license package from the town. Owners will be required to certify that every itme on the checklist is complete and in working order beginning with the 2010 summer rental season.

The required items include:

1. battery-operated smoke detectors for each bedroom in the rental home;
2. deadbolt locks that do not require interior keys;
3. ground-fault circuit interrupter (GFCI) protection on all outdoor electrical receptacles, bathroom receptacles, garage wall outlets, kitchen receptacles and all receptacles in crawl spaces;
4. a minimum of 4-inch-high exterior house numbers; and
5. secure window locks for all windows within 12 feet of grade and second-story windows accessible by fire escapes or stairs.

Rental property owners will be required in 2010 to submit a completed checklist with their license application. The checklist must be signed by the owner, to attest to the accuracy of the form, and notarized.

The town is offering the service of town staff to perform that notarization, free of charge at town hall. The notarization requirement was offered so the town could allow a "self-inspection" with the checklist instead of requiring a town employee to inspect for compliance in person.