Hurricane Ian could cripple Florida’s home insurance industry
Alexis Christoforous – September 29, 2022
Hurricane Ian could cripple Florida’s already-fragile homeowners insurance market. Experts say a major storm like Ian could push some of those insurance companies into insolvency, making it harder for people to collect on claims.
Since January 2020, at least a dozen insurance companies in the state have gone out of business, including six this year alone. Nearly 30 others are on the Florida Office of Insurance Regulation’s “Watch List” because of financial instability.
“Hurricane Ian will test the financial preparedness of some insurers to cover losses to their portfolios, in particular smaller Florida carriers with high exposure concentrations in the impacted areas,” Jeff Waters, an analyst at Moody’s Analytics subsidiary RMS and a meteorologist, told ABC News. Waters said Florida is a peak catastrophe zone for reinsurers, and those with exposure will likely incur meaningful losses.
PHOTO: This aerial photo shows damaged homes and debris in the aftermath of Hurricane Ian, Sept. 29, 2022, in Fort Myers, Fla. (Wilfredo Lee/AP)
More than 1 million homes on the Florida Gulf Coast are in the storm’s path, and while Ian’s track and severity can change in the coming days, one early estimate pegs the potential reconstruction cost at $258 billion, according to Corelogic, a property analytics firm.
Industry analysts say years of rampant and frivolous litigation and scams have brought Florida’s home-insurance market to its knees, with many large insurers like Allstate and State Farm, reducing their exposure to the state in the past decade.
“Insurers most exposed to the storm will be the Florida-only insurers, which we define as insurance companies with at least 75% of their homeowners and commercial property premiums written in Florida,” according to a report from Moody’s Analytics submitted to ABC News.
The state-run, taxpayer-subsidized Citizens Property Insurance Corp. stands to lose the most. As more local insurance companies in Florida have closed their doors, Citizens has seen its number of policyholders swell from 700,000 to more than 1 million in just the past year.
Florida state Sen. Jeff Brandes, a Republican from St. Petersburg and a vocal critic of Florida’s insurance industry, warns that if Citizens can’t pay its claims, Floridians should brace for assessments to go up on their own insurance policies under a state law that allows it to assess non-customers to pay out claims.
“Every policy holder in the state of Florida, home and auto, should be watching this storm very carefully because it could have a direct impact on their pocketbooks,” said Brandes. He predicts policy holders will see rate hikes of up to 40% next year as a result of Ian.
A spokesperson for Citizens tells ABC News that if their preliminary estimate of 225,000 claims and $3.8 billion in losses holds, the insurer of last resort would be in a position to pay all claims without having to levy a “hurricane tax” on residents.
Florida is already home to the highest insurance premiums in the U.S., something Charlie Crist, the former Florida governor running against incumbent Gov. Ron DeSantis, blames on his opponent.
“Gov. DeSantis let these insurance companies double Floridians’ rates and they’re still going belly up when homeowners need them most. You pay and pay and pay, and the insurance company isn’t there for you in the end anyway,” Crist said in a statement Monday.
A spokesperson for DeSantis did not immediately respond to ABC News’ request for comment.
In May, DeSantis signed a bipartisan property insurance reform bill into law that poured $2 billion into a reinsurance relief program and $150 million into a grant program for hurricane retrofitting. Among other things, it prohibits insurance companies from denying coverage based on the age of a roof and limits attorney fees on frivolous claims and lawsuits.
At a news conference Tuesday, DeSantis said a lot of the damage from Ian would be from flooding and storm surge. DeSantis said the danger with the Tampa Bay area is that the water has no place to go, noting that the area has close to 1 million residents enrolled in a national flood insurance program.
PHOTO: A man begins cleaning up after Hurricane Ian moved through the Gulf Coast of Florida on Sept. 29, 2022 in Punta Gorda, Fla. (Win Mcnamee/Getty Images)
Homeowner policies typically do not cover flood damage, and most homeowners located in a flood zone often get coverage from the Federal Emergency Management Agency (FEMA). Most private property insurance companies insure primarily for wind damage.
President Joe Biden on Thursday approved DeSantis’ request for a disaster declaration for a number of counties in the state. It includes grants for temporary housing and home repairs and low-cost loans to cover uninsured property losses.
“The expense will be higher because of higher construction costs and overall inflation,” Denise Rappmund, the vice president of Moody’s Public Project and Infrastructure Finance Group, told ABC News. “FEMA is the key source of aid following a natural disaster, but much of the costs to repair and rebuild damaged property will be borne by property insurers who will benefit from $2 billion of state-funded reinsurance.”
Analysts say Hurricane Ian has the potential to be among the four costliest storms in U.S. history, mostly because Florida’s population has exploded in recent years.
No state in the eastern U.S. has grown faster in population than Florida in the past decade and the state’s fastest growing cities: Tampa, Fort Myers and Sarasota, are all in the storm’s path. Analysts warn that more people and more homes mean that a major storm could become more destructive and costly.
Rising homelessness is tearing California cities apart
Lara Korte and Jeremy B. White – September 21, 2022
Jae C. Hong/AP Photo
SACRAMENTO, Calif. — A crew of state workers arrived early one hot summer day to clear dozens of people camped under a dusty overpass near California’s Capitol. The camp’s residents gathered their tents, coolers and furniture and shifted less than 100 feet across the street to city-owned land, where they’ve been ever since.
But maybe not for much longer.
The city of Sacramento is taking a harder line on homeless encampments, and is expected to start enforcing a new ban on public camping by the end of the month — if the courts allow.
As the pandemic recedes, elected officials across deep-blue California are reacting to intense public pressure to erase the most visible signs of homelessness. Democratic leaders who once would have been loath to forcibly remove people from sidewalks, parks and alongside highways are increasingly imposing camping bans, often while framing the policies as compassionate.
“Enforcement has its place,” said Sacramento Mayor Darrell Steinberg, a Democrat who has spent much of the past year trying to soothe public anger in a city that has seen its unsheltered homeless population surpass that of San Francisco — 5,000 in the most recent count compared with San Francisco’s 4,400. “I think it’s right for cities to say, ‘You know, there are certain places where it’s just not appropriate to camp.'”
Steinberg is one of many California Democrats who have long focused their efforts to curb homelessness on services and shelter, but now find themselves backing more punitive measures as the problem encroaches on public feelings of peace and safety. It’s a striking shift for a state where 113,000 people sleep outdoors on any given night, per the latest statewide analysis released by the U.S. Department of Housing and Urban Development in 2020. California’s relatively mild climate makes it possible to live outdoors year-round, and more than half of the nation’s unsheltered homeless people live here.
Democratic Gov. Gavin Newsom recently announced the state had cleared 1,200 encampments in the past year, attempting to soften the message with a series of visits to social service programs. But without enough beds to shelter unhoused people, advocates say efforts to clear encampments are nothing more than cosmetic political stunts that essentially shuffle the problem from street corner to another.
Steinberg, a liberal Democrat who resisted forcibly removing people until more shelters can come online, has for more than 20 years championed mental health and substance abuse programs as ways to get people off the street. But such programs have been largely unable to keep up with the rising number of homeless people in cities like Sacramento, where local leaders are now besieged by angry citizens demanding a change.
He and many of his fellow Democratic mayors around the state are not unsympathetic to their cause. San Diego has penalized people refusing shelter. Oakland upped its rate of camp closures as the pandemic receded. San Jose is scrambling to clear scores of people from an area near the airport or risk losing federal funding.
“No one’s happy to have to do this,” San Diego Mayor Todd Gloria said earlier this summer as he discussed ticketing people who refuse shelter. “We’re doing everything we can to provide people with better choices than the street.”
Other Democratic leaders around the country, facing similar pressure, have also moved to clear out encampments and push homeless people out of public spaces. New York City Mayor Eric Adams, a former police captain who won his office on a pledge to fight crime, came under fire this year for his removal of homeless people from subways and transit hubs. The city’s shelter system is now bursting at the seams.
In California, where the percentage of people living day-to-day on the streets is far higher than New York, the shortage of shelter beds has caused friction and embroiled local and state officials in court challenges.
A recent court decision requires local governments to provide enough beds before clearing encampments — a mandate that does not apply to state property. But that’s easier said than done in a state where there are three to four times as many homeless people as shelter beds.
California’s homelessness problem has deep, gnarled roots dating back decades, but has become increasingly pronounced in recent years. Tents and tarps on sidewalks, in parks and under freeways have become a near-ubiquitous symbol of the state’s enduring crisis. A pandemic-spurred project to move people from encampments to motels has lapsed, and eviction moratoriums have dissolved. Homelessness is a top concern for voters in the liberal state, and as Democrats prepare for the midterm elections, Newsom and other leaders have been eager to show voters they’re taking action.
But the practice of clearing out camps can be a futile exercise, particularly when the people being forced to pack up their tents have nowhere else to go or simply end up doing the same thing just a few blocks away.
Weeks after state transportation workers cleared the space under the Sacramento highway, people are still camped out along a city sidewalk across the street, with blankets, chairs, tires and shelves spilling out onto the street and, at times, blocking driveways.
Syeda Inamdar, who owns a small office building on the block, said her tenant is afraid to come to work because of the camp. A nearby Starbucks abruptly closed earlier this year, citing safety concerns.
“This is not safe for anybody,” said Inamdar, who is sympathetic to the people in the camp but says she’s nevertheless thinking of just giving up and selling the property.
Jay Edwards, a homeless man in his 60s, said he and many of his fellow residents felt safer under the overpass, where their tents didn’t block footpaths and people didn’t bother them. Newsom and others have described living situations like his — in a blue tent, with a dirty mattress, surrounded by piles of random belongings and trash — as inhumane. Edwards disagreed.
“It’s not inhumane,” he said. “It’s the people’s attitudes that make it inhumane.”
The state has given more than $12 billion in recent years to help local governments build housing and shelter. But it could be years before those units are built.
In Sacramento, city and county leaders just made it easier for authorities to clear tents from sidewalks and along a popular river trail. But some want even tougher laws. Earlier this year, a coalition of Sacramento business owners approached city councilors hoping to put a measure on the November ballot that would compel the city to move camps blocking sidewalks and create more shelter for those they moved. The Council, whose members run without party affiliation, voted to put the measure on the ballot, with some caveats that enlist the help of the county. Councilmember Katie Valenzuela was one of two members who voted against it.
She said moving the camps won’t help the root of the problem, and the city can’t afford the amount of space that would be necessary to house people cleared from encampments.
“People are saying ‘oh you’ve got the space to do this, just put them all on 100 acres.’ That’s not how this works,” she said.
Newsom appears to be feeling the pressure as well, channeling voter frustration by calling proliferating encampments “unacceptable” and pointing to the litter-filled highway underpasses he cleans during press events as evidence the state has become “too damn dirty.”
Historically, California governors have been reluctant to funnel significant resources to combat the homeless problem. But Newsom, a former mayor of San Francisco, has made it a centerpiece of his administration. The governor has secured hundreds of millions of dollars to help local governments address encampments by offering residents services and helping them find shelter, on top of the billions of dollars California has poured into homelessness more broadly and a state program to convert hotels and motels into low-income housing.
But those efforts aren’t happening fast enough for many in California, including merchants who are languishing in downtowns that are inundated with tents, tarps and other refuse from the people who have taken up residence on sidewalks and street corners. Business owners in San Francisco’s historic Castro District threatened to stop paying taxes last month if city officials didn’t do something about the vandalism, littering and frequent display of psychotic episodes that are a result of the neighborhood’s homeless population.
The governor has also personally weighed in when those efforts collided with resistance from courts and local governments. Earlier this year, he decried a federal judge for “moving the goal posts” in an order that blocked CalTrans from removing a camp in San Rafael. The Newsom administration and Oakland also clashed over a sprawling encampment where a July fire menaced a nearby utility facility that stored explosive oxygen tanks.
A judge blasted both the state and the city for trading blame while failing to find shelter for camp residents, accusing the parties of wanting “to wash their hands of this particular problem” and blocking the state’s plan to clear the site. Newsom excoriated the judge’s order and subsequently threatened to pull funding from Oakland, arguing the city was shirking its obligations. The judge ultimately allowed the clearing to proceed despite camp residents outnumbering available city beds.
Those tensions illustrate a larger test for the housing first philosophy that Newsom and other Democrats espouse. The basic premise is that long-term housing is the starting point for getting people off the streets. But it would take years to address California’s chasmic housing shortage while people are clamoring for solutions to street homelessness now.
The governor’s top homelessness adviser, Jason Elliott, said it was “impossible to say” if the state had sufficient short-term shelter for everyone living outside and conceded that “we don’t have enough money to afford a home for every person who experiences homelessness.” But he argued the state could and should move swiftly on “the most unsafe” sites, calling it a first step to help people.
“The criticism that we should not do anything about dangerous, unsafe encampments until we achieve millions of more units, I think, ignores the seriousness of the problem,” Elliott said. “Street homelessness is deeply dangerous and unsafe for people in the community and for people living in those tents.”
Addiction and mental illness can drive people into homelessness and keep them there, which has fueled Newsom’s push for a civil court system that would create treatment plans for those with the most critical needs and allow involuntary commitment for people who do not participate. The CARE Courts program, which Newsom is expected to sign into law soon, is estimated to help between 7,000 and 12,000 people — a small portion of the more than 160,000 Californians without stable housing.
Outside of interventions in critical mental health cases, policymakers broadly agree that poverty and a dearth of affordable housing are still driving more Californians to live on the street and that, on any given day, more people may become homeless than find housing.
Wary advocates are responding with legal challenges.
Oakland amended an ordinance barring camping near locations including homes, schools and businesses after advocates for the homeless sued, calling the policy inhumane. Advocacy groups in Sacramento unsuccessfully sued to block a ballot measure they called cruel and unusual.
In Los Angeles, a sprawling lawsuit over encampments endangering public welfare has produced a vow to build more shelters — and created the legal authority to clear people from public spaces. Last year, the LA City Council prohibited people from sleeping in sensitive public spaces selected by council members in a move the city of Riverside emulated. Then, Los Angeles bolstered its prohibition in early August by banning camping near schools and daycares, acting at the behest of school district officials who warned children were being traumatized and threatened by people in a growing number of encampments.
A backlash erupted as protesters filled the City Council chambers, chanting and shouting over speakers as they accused council members of inflicting death and violence on homeless people. Authorities ultimately cleared the chambers before lawmakers could return and vote. The proposal passed overwhelmingly with the blessing of Rep. Karen Bass, a Democrat running for LA mayor. But dissenters accused the Council of displacing the problem.
“When you don’t house people, when you don’t offer real housing resources to people at a particular location, the best outcome that you can hope for from a law like this is that people move 500 feet down the street,” Councilmember Nithya Raman said in an interview. “I’m up against a wall. I don’t have any available shelter, and I would imagine other council members are feeling the same way.”
Seventy percent of California’s homeless population is unsheltered, according to a recent Stanford University study, compared to New York, where the figure is 5 percent. The same study found that a large portion of the California homeless population have either a severe mental illness or long-term substance abuse problem, or both.
State and local officials have feuded for decades over who bears responsibility for housing and caring for people with severe mental health illnesses — those who might have been institutionalized a half-century ago, before the national closure of state-funded psychiatric hospitals.
Steinberg, the Sacramento mayor, has been trying to solve this problem for decades. In 2004, as a state legislator, he authored a landmark ballot measure, the Mental Health Services Act, which charged a 1 percent income tax on earnings more than $1 million to provide funding for mental health programs. Steinberg and others have praised the measure as a success, and some reports show that those who participate in the programs funded by the law see a reduction in homelessness.
But nearly two decades later, Steinberg is now dealing with a sprawling homeless population. Sacramento’s bans on camping along sidewalks and along the scenic river trail are set to go into effect at the end of the month. The city ban would classify a violation as a misdemeanor, but homeless people are not supposed to be automatically jailed or fined unless there are extraordinary circumstances, per a companion resolution Steinberg introduced.
With the upcoming ballot measure, championed by business leaders, the city is prepared to put tougher enforcement laws to voters in November, despite fierce criticism and legal challenges from advocates for homeless people. Steinberg said it’s still worth a shot.
“It is not perfect and it is not the way I would write it,” he said of the ballot measure. “But it is progress toward what I believe is essential: that people have a right to housing, shelter and treatment and in a very imperfect way.”
Climate change could wipe $108 billion from U.S. property market, study finds
Alex Lubben – September 20, 2022
Sea level rise will flood huge swaths of the country and submerge billions of dollars’ worth of land, according to a new report.
An analysis from Climate Central, a nonprofit research group, put a price tag on just how much all that land is worth — and how much local governments stand to lose when it goes underwater. The report found that nearly 650,000 privately owned parcels of land over more than 4 million acres will fall below tide lines within the next 30 years. The analysis indicates that sea level rise could reduce the value of that private land by more than $108 billion by the end of the century.
Because all land below the tide line is, by law, state-owned, the encroachment of the tides could essentially vaporize huge amounts of private, taxable wealth. That, in turn, will decrease property tax revenue substantially in coastal areas, which experts caution could ultimately bankrupt local governments.
For millennia, tide lines haven’t really budged. Nor has the notion that any land under water is public, which is an “idea that goes way back to Roman times,” said Peter Byrne, the director of the Georgetown Environmental Law and Policy Program. “The tidelands, the sea, they’re open to the public because they’re navigable. They’re inherently public.”
But as the planet heats, the old tide lines are climbing uphill. The study found that an area the size of the state of New Jersey that is now above water will be submerged at high tide in 2050.
“Sea level rise is ultimately going to take land away from people,” said Don Bain, a senior adviser with Climate Central, who wrote the report. “That’s something we haven’t come to grips with.”
Losing such a huge amount of private land over a few years could have far-reaching consequences. Insurance companies have already started to pull out of coastal markets or are raising their premiums substantially. Banks and other financial institutions are starting to look at whether it makes sense to lend to homeowners and businesses along the coastline.
All told, places that are currently livable will become increasingly hard to live in. Here’s what this might mean for local governments.
Risk isn’t evenly distributed
Climate Central found that, unsurprisingly, the effects of sea level rise aren’t evenly distributed across the U.S. The Atlantic and Gulf Coasts will feel its effects more than other parts of the country. In many areas along the coast, sea levels will rise significantly faster because land is sinking as sea levels rise.
By 2050, Climate Central estimates that about 75% of Terrebonne Parish, Louisiana, will be underwater. In Hudson County, New Jersey, $2.4 billion worth of taxable property will be submerged. In Galveston County, Texas, more than 4,200 buildings that are currently above sea level will be at least partially underwater.
Kyle Harner kayaks along a flooded street in Friendswood, Texas, on Sept. 22, 2020. (Stuart Villanueva / The Galveston County Daily News via AP file)
“Climate impacts are not going to happen far off into the future, but within the life of the mortgage on your house,” said Anna Weber, a policy analyst with the National Resources Defense Council.
While sea level rise is one of the major impacts of the climate crisis, it’s not the only one. Supercharged hurricanes and wildfires will also cause displacement and will contribute to the erosion of local tax bases as people move to safer areas. More frequent intense rainstorms are expected to cause more inland flooding in many parts of the U.S. Coastal counties won’t be the only places affected.
“These numbers are relatively conservative,” said Jesse Keenan, a professor of sustainable architecture at Tulane University, who was not involved with the Climate Central study. “That’s what should scare people.”
Doing more with less
In many places, coastal property is the most valuable real estate — and a major source of property taxes for local governments. Without it, municipalities could see a huge loss of revenue at a time when the costs of adapting to climate change are expected to skyrocket. The costly measures that municipalities will need to undertake to adapt to rising sea levels, like building seawalls or elevating roads, could become more difficult to fund.
“When that property tax revenue base shrinks, it’s a compounding problem for adaptation,” said A.R. Siders, a climate adaptation researcher at the University of Delaware’s Disaster Research Center. That could create a vicious cycle: “Not being able to protect those homes reduces their value and so you have fewer resources to protect those homes.”
That won’t just affect the owners of beachfront property. Municipalities rely on property taxes to fund roads, schools, trash pickup — all the basic services that residents rely on.
“It seems probable to me that over time we’re going to have to figure out a different funding model for really flood-prone communities, or communities along the coastline,” Siders added. “They’ve been relying on the perpetual growth of the housing market and that just doesn’t deem realistic in places that are going to experience the effects of climate change.”
One tool that municipalities use to raise money to fund projects that make them more resilient to climate change is municipal bonds — to do things like build a new bridge, fund the construction of a school, or, maybe, to pay for flood control so a city doesn’t get submerged by the next big storm.
Huge Snow Storm Slams Into Mid Atlantic States (Andrew Renneisen / Getty Images file)
Flooding poses threats to crops, commuting routes, utilities, wastewater treatment plants and buildings, the report noted. How local governments react to these economic hits will have implications for their ability to repay debt and keep their credit ratings afloat.
“Before they even reach bankruptcy, stress is going to reverberate through the muni bond market,” Keenan said. “What we’ll begin to see is a more explicit [climate] premium and a higher cost of borrowing for these counties.”
‘Choices to be made’
There are parts of the country that are exacerbating their exposure to the climate risks by continuing to build in coastal areas that will soon be underwater. Climate Central’s report calls for stricter restrictions on new developments and for building new housing outside of risk zones.
Buyouts, in which the government offers to purchase flood-prone buildings, could help create a natural “buffer zone” along the coasts, other experts suggest.
“This issue of losing tax base is something that comes up a lot when we talk about home buyouts because in that case, you are deliberately converting a property from private ownership to public ownership,” Weber said. “What this report shows is that, in some cases, that process is going to happen whether you do it deliberately or not.”
Besides building codes and moving people out of harm’s way, there’s still time to change course on greenhouse gas emissions, Bain emphasized. If the world continues to produce emissions at the current rate, the tides will rise faster; reducing emissions now will allow crucial time to adapt to the rising tides.
“We may not be able to change much between now and 2050, but we can make a large difference going forward from that,” Bain said. “There are still choices to be made — between better outcomes and far worse outcomes.”
Patagonia founder is giving away his billion dollar company and ensuring that all profits go towards fighting climate change
Kelsey Vlamis and Lakshmi Varanasi – September 14, 2022
Yvon Chouinard announced Wednesday he is giving away his multi-billion dollar company, Patagonia.
Chouinard said instead of selling it or taking it public, Patagonia will be owned by a trust and nonprofit.
The trust is set up to ensure Patagonia’s profits go towards addressing climate change.
Patagonia founder Yvon Chouinard is giving away the company by transferring it to a newly established trust and nonprofit in order to ensure its profits go towards combatting the climate crisis.
Chouinard, the rock climber-turned-billionaire, announced the move in a statement on Wednesday.
“Instead of ‘going public,’ you could say we’re ‘going purpose.’ Instead of extracting value from nature and transforming it into wealth for investors, we’ll use the wealth Patagonia creates to protect the source of all wealth,” he wrote.
Chouinard, 83, said that he opted for the unique ownership model instead of selling the company to an owner that could potentially compromise Patagonia’s values, or going public and leaving the company beholden to shareholders first.
Instead, ownership of the outdoor apparel company, valued at around $3 billion, is being transferred to the Patagonia Purpose Trust and Holdfast Collective.
“It’s been nearly 50 years since we began our experiment in responsible business, and we are just getting started. If we have any hope of a thriving planet—much less a thriving business—50 years from now, it is going to take all of us doing what we can with the resources we have. This is another way we’ve found to do our part,” Chouinard said.
Patagonia said going forward all profits that are not reinvested back into the company will be distributed to Holdfast Collective to go towards environmental causes, according to an additional statement provided to Insider. The company estimates this amount will total about $100 million each year.
Founded by Chouinard nearly 50 years ago, Patagonia is well known for breaking with conventional business practices and for its commitment to sustainability.
In an interview with The New York Times about the decision, Chouinard said he hopes the move will “influence a new form of capitalism that doesn’t end up with a few rich people and a bunch of poor people.”
“We are going to give away the maximum amount of money to people who are actively working on saving this planet,” he said.
Dan Mosley of merchant bank BDT & Co., who helped Patagonia structure the move, told The Times he’s never seen anything like it: “In my 30 plus years of estate planning, what the Chouinard family has done is really remarkable.”
“It’s irrevocably committed. They can’t take it back out again, and they don’t want to ever take it back out again,” Mosley said.
Chouinard and his family have given away most of their wealth throughout his lifetime, making them one of the most charitable families in the US.
Chouinard has also famously said that Patagonia’s decisions that were good for the planet have also been good for business.
“I didn’t know what to do with the company because I didn’t ever want a company,” Chouinard told The Times. “I didn’t want to be a businessman. Now I could die tomorrow and the company is going to continue doing the right thing for the next 50 years, and I don’t have to be around.”
Complaints about inaccurate credit reports are soaring
Khristopher J. Brooks – September 14, 2022
Americans are on pace to set a record this year for the most complaints about credit report inaccuracies filed with the Consumer Financial Protection Bureau, according to Consumer Reports.
Credit score concerns accounted for slightly more than half of all complaints sent to the federal agency in 2020 and 2021, the nonprofit consumer advocacy group found. But during the first half of this year, that number has ballooned to three-quarters of all complaints.
“Mistakes on credit reports are all too common and can have serious consequences, especially for those who are already struggling to make ends meet,” Consumer Reports policy analyst Syed Ejaz said in a statement. “No one should have to pay to access their own financial information.”
Consumer Reports urged the three major credit bureaus — Equifax, Experian and TransUnion — to take action to ensure that people’s credit reports are accurate. One way to accomplish this, it said, is to stop making consumers pay for their report. Equifax and TransUnion charge between $20 and $30 a month for unlimited access to personal credit reports. Experian’s reports are free.
Under the Fair and Accurate Credit Transactions Act, consumers can get a free, complete credit report once a year at the site annualcreditreport.com. Experian and TransUnion charge consumers for repeated access to their reports.
Free access
Seeing your credit report once a year isn’t enough, Ejaz said in a letter to the credit bureaus. Consumers need constant and free access to their report so they can quickly spot and dispute errors, he argued. “[C]onsumers should be able to access their credit reports securely and for free at any time, as frequently as they deem necessary,” Ejaz said.
Companies use credit scores for employment decisions, while landlords use them to assess new tenants, and insurance companies use them to set prices. So a person’s financial history shouldn’t be locked behind a paywall, Ejaz said.
The push for unlimited free access to credit reports comes a few months after Equifax accidentally sent the wrong credit score out for hundreds of thousands of Americans. Equifax now faces a class-action lawsuit over the credit scores, which were sent out between March 17 and April 6. Federal lawmakers also have called on Equifax to explain what caused the error and how consumers will be compensated for the mistake.
Aside from free reports, said Ejaz in the letter, credit bureaus can also improve accuracy by:
Double-checking a consumer’s full name, date of birth and full Social Security number before placing a mark on someone’s credit report;
Letting a consumer dispute the investigation findings of a previously submitted inaccuracy dispute;
Mot locking a consumer out of their credit report if the person cannot answer identity questions.
Consumer Reports has launched an online petition further urging the credit bureaus to make their reports free always.
Inaccurate credit reports have become a growing national problem in recent years, with many consumers reporting difficulty inn getting Equifax, Experian or TransUnion to delete mistakes from their file.
An analysis from the CFPB found that the three credit bureaus collectively resolved less than 2% of credit report complaints they received in 2021, down sharply from 25% in 2019. The number of complaints Americans sent to the CFPB about inaccurate credit reports more than doubled between 2018 and 2021, Consumer Reports said.
UN sums up climate science: world heading in wrong direction
September 13, 2022
Victims of heavy flooding from monsoon rains crowd carry relief aid through flood water in the Qambar Shahdadkot district of Sindh Province, Pakistan, Sept. 9, 2022. The United Nations says weather disasters costing $200 million a day and irreversible climate catastrophe looming show the world is “heading in the wrong direction.” (AP Photo/Fareed Khan, File)Floating boat docks sit on dry ground as water levels have dropped near the Callville Bay Resort & Marina in the Lake Mead National Recreation Area, Tuesday, Aug. 30, 2022, near Boulder City, Nev. The United Nations says weather disasters costing $200 million a day and irreversible climate catastrophe looming show the world is “heading in the wrong direction.” (AP Photo/John Locher)A railway worker hands out bottles of water to passengers at King’s Cross railway station where there are train cancellations due to the heat in London, July 19, 2022, during a heat wave. The United Nations says weather disasters costing $200 million a day and irreversible climate catastrophe looming show the world is “heading in the wrong direction.” (AP Photo/Kirsty Wigglesworth, File) A man wipes his forehead as he walks along the lower than normal bank of the Jialing River during a drought in southwestern China’s Chongqing Municipality, Aug. 19, 2022. The United Nations says weather disasters costing $200 million a day and irreversible climate catastrophe looming show the world is “heading in the wrong direction.” (AP Photo/Mark Schiefelbein, File)
GENEVA (AP) — With weather disasters costing $200 million a day and irreversible climate catastrophe looming, the world is “heading in the wrong direction,” the United Nations says in a new report that pulls together the latest science on climate change.
“There is nothing natural about the new scale of these disasters. They are the price of humanity’s fossil fuel addiction,” he said. “This year’s United in Science report shows climate impacts heading into uncharted territories of destruction.”
“Yet each year we double-down on this fossil fuel addiction, even as the symptoms get rapidly worse,” he added.
The report, drawn from data compiled by several U.N. agencies and partners, cited a 48% chance that global temperature rise compared to pre-industrial times will reach 1.5 degree Celsius (2.7 Fahrenheit) in the next five years. There’s a 93% percent chance that one year in the next five will see record heat.
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The Consumer Price Index (CPI) in August reflected an 8.3% increase over last year and a 0.1% increase over the prior month, the Bureau of Labor Statistics reported Tuesday. Economists had expected prices to rise 8.1% over last year and fall 0.1% over last month, according to estimates from Bloomberg.
On a “core” basis, which strips out the volatile food and energy components of the report, prices rose 6.3% over last year and 0.6% over the prior month in August.
Expectations were for a 6.1% annual increase and 0.3% monthly increase in core CPI.https://flo.uri.sh/visualisation/6180194/embed?auto=1
The unexpected rise in Tuesday’s headline figure came despite a 5% drop in energy prices over the month, driven by 10.6% plunge in the gasoline index.
Inflationary pressures remained strong across other components of the report, with declining gas and energy prices offset by increases in the costs of shelter, food, and medical care — the largest of many contributors to the broad-based monthly increase, per the Bureau of Labor Statistics.
August’s CPI report sent stocks tumbling. Shortly after the release, Nasdaq futures were down as much as 1.8%, S&P 500 futures sank 1.2%, and Dow futures fell 0.9%
The reading also likely affirms that Federal Reserve officials will raise interest rates by 75 basis points at their policy-setting meeting Sept. 20-21.
“Today’s inflation data cements a third consecutive 0.75% increase in the Fed funds rate next week,” Principal Global Investors Chief Global Strategist Seema Shah said in a note.
WASHINGTON, DC – MAY 23: (L-R) Vice Chair of the Federal Reserve Lael Brainard shakes hands with Jerome Powell after he took the oath of office for his second term as Chair of the Board of Governors of the Federal Reserve System at the William McChesney Martin Jr. Building of the Federal Reserve May 23, 2022 in Washington, DC. Powell has served as Federal Reserve Board of Governors Chair since February of 2018. (Photo by Drew Angerer/Getty Images)
“Headline inflation has peaked but, in a clear sign that the need to continue hiking rates is undiminished, core CPI is once again on the rise, confirming the very sticky nature of the US inflation problem,” Shah added, pointing out that 70% of the CPI basket logged an annual price rise of more than 4% month-on-month. “Until the Fed can tame that beast, there is simply no room for a discussion on pivots or pauses,” Shah said.
The higher-than-expected inflation print also comes after a round of more aggressive talk from central bank officials, notably Vice Chair Lael Brainard, who said last week: “While the moderation in monthly inflation is welcome, it will be necessary to see several months of low monthly inflation readings to be confident that inflation is moving back down to 2 percent.”
“Monetary policy will need to be restrictive for some time to provide confidence that inflation is moving down to target,” Brainard added, “We are in this for as long as it takes to get inflation down.
A person arranges groceries in El Progreso Market in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022. REUTERS/Sarah Silbiger
Among individual components of the report, the food index increased 0.8% in August, the smallest monthly increase since December 2021. Meanwhile, the food at home index rose 0.7% during the month, with all six major grocery store food group indexes rising.
Housing prices continued their climb, with the cost of shelter recording its largest increase month-on-month increase — 0.7% — since January 1991. Over the last year, the shelter index jumped 6.2%, accounting for roughly 40% of the broader index increase in all items excluding food and energy.
The cost of medical care notably rose 0.7% in August after a 0.4% increase in July, with major medical care component indexes climbing across the board.
Rising seas fueled by climate change to swamp $34B in US real estate in just 30 years, analysis finds
Dinah Voyles Pulver, USA TODAY – September 8, 2022
Higher high tides, supercharged by rising sea levels, could flood all or parts of an estimated $34 billion worth of real estate along the nation’s coasts within just 30 years, a new report concludes.
Within the span of a 30-year mortgage, as many as 64,000 buildings and roughly 637,000 properties along the ocean and its connecting waterways could be at least partially below the tidal boundary level, the nonprofit Climate Central stated in a report released Thursday morning.
Seas are forecast to rise from 8 inches to 23 inches along the nation’s coasts by 2050, with the higher increases along the northern Gulf Coast and mid-Atlantic. As the oceans rise, every inch of additional water is expected to move farther inland making flood events worse and putting more properties at risk.
Tax dollars flowing into local governments will sink as rising water claims homes and land, lowering property values and sending a ripple effect through communities, said Don Bain, an engineer and Climate Central senior adviser.
The analysis concluded such losses could triple by 2100 in counties connected to the sea, depending on whether the world can rein in warming temperatures
The nonprofit looked at tax assessment data for 328 counties throughout the U.S. and tidal level property boundaries and elevation. Here’s what its analysis found:
Underwater
More than 48,000 properties could be entirely below the high tide lines by 2050, mostly in Louisiana, Florida and Texas.
Nearly 300,000 buildings could be at least partially under water by 2100. The value of buildings and properties below the high water level could rise to $108 billion, not including some 90 counties where the nonprofit couldn’t get tax assessor data.
Parishes under pressure
Parishes in low-lying Louisiana – where sinking ground compounds the effects of rising sea levels – are forecast to feel the brunt of the impacts. The analysis shows some 8.7% of the state’s total land area could be below water level by 2050.
Thirteen parishes rank in the top 20 among all counties and parishes for the most acres potentially below water level by 2050. More than half of the land in six parishes could be below water level by then, including Terrebonne, LaFourche, St. Charles, St. Mary, St. Bernard and St. John the Baptist.
A scattering of counties in five other states also could feel bigger impacts.
New Jersey’s Hudson County, across the Hudson River from Manhattan, is among those, with more than 15% of its total acreage below the predicted higher water levels. It leads all counties in the nation with an estimated value of land and buildings at risk: more than $2.4 billion.
Also among the top 20 counties with the most acres predicted below water level by 2050 are:
Middlesex, along the Chesapeake Bay in Virginia
Monroe, home of the Florida Keys
Jefferson, Texas, on the northern Gulf coast at Beaumont
Dare, Tyrell and Currituck counties along North Carolina’s Outer Banks and Albemarle Sound
Among the counties with the greatest property values at stake are:
Galveston, Texas, $2.37 billion
Honolulu, Hawaii, $2.3 billion
Washington, DC, $1.4 billion
Miami-Dade, Florida, $1.3 billion
Losing land
As much as 4.4 million acres could fall below the shoreline boundaries that mark the line between private property and public land by 2050, a number the report estimated would double by 2100. The majority of that land in 2050 – 3.8 million acres – lies in just four states: Louisiana, Florida, North Carolina and Texas.
“Your land is going to be taken from you by the rising seas,” Bain said. “Nobody’s talking about that.”
The analysis used the relevant tidal boundary for each state, whether it’s the mean low water line, the mean high water line or the mean higher high water line, then calculated the land within each property that could fall below that boundary as seas rise.
They calculated the exposed tax-assessed value for properties that could be newly affected by higher water and multiplied the value of each property by the fraction forecast to be below the line. They used an entire building’s value when any of the building is at or below the line.
The loss of taxable value could greatly impact the budgets of many towns and counties, said A.R. Siders, an assistant professor in the University of Delaware’s Disaster Research Center. “If a town has no other income and is relying solely on property tax values, that town is not sustainable.”
Risky business
Climate Central is among numerous groups working to better define the nation’s climate risk.
The need for such information is huge as mortgage lenders, insurers and others try to discern what the future holds and what it means for business, said Bain, adding it’s important to balance sheets for governments, individuals and corporations.
“Climate change impacts are real,” said Mark Rupp with the Georgetown Climate Center at Georgetown University. “They are happening now, and they are affecting even the business world.
“How many mortgage lenders want to be lending for home mortgages in flood-prone areas, if they don’t think that they’re going to get paid back?”
Rupp also pointed to the number of insurance carriers who have pulled out of the market in Florida or become insolvent. He said it’s critical for local governments to get support from state and federal governments to plan and prepare in advance.
Inspire not frighten
The report’s conclusions aren’t meant to frighten or discourage people, Bain said. He hopes they give people information to influence outcomes and push officials at every level of government to begin working together now to adopt needed laws and regulations.
“I’s not too late to make course corrections,” Bain said. “Solving this problem is important because it’s a choice between better outcomes and really bad outcomes.”
It’s important to educate and inform people about what they’re facing so they can do the rest, Bain said. “I think we can have a bright and prosperous future but only if we put our minds and shoulders to it, and are well-informed and get after it.”
Here’s why some homeowners skipped the refinance boom — and don’t regret it
Gabriella Cruz- Martinez, Personal finance writer – September 7, 2022
As mortgage rates remain well above 5%, it seems homeowners who had the chance to refinance into historically low rates in the last two years but didn’t must be kicking themselves.
Instead, many probably made a financially savvy move, according to experts.
Nearly one-fourth of all homeowners refinanced their mortgage in 2021, according to data from the Federal Reserve Bank, when mortgage rates dropped below 3%. That refi boom is over, with activity falling to the lowest level since 2000, according to the Mortgage Bankers Association, leaving the 14.6% of homeowners with a current rate above 5% without many options.
“There are a lot of reasons why people don’t refinance,” Keith Gumbinger, vice president of HSH.com, told Yahoo Money. “You might find that loan amounts are too small to be bothered with, or you might be thinking about selling at some point in the future.”
Changing circumstances
Life happens and that can change your financial situation from where it was when you first purchased your home. For instance, a couple may have bought soon after marrying when they both had paying jobs. Five or six years later, things may look different and refinancing may not be in the cards even if rates are under 3%.
“You’ve since started a family and only one spouse is working or the other isn’t working full time to care for the child,” Gumbinger said. “Now your income might not even be enough to qualify you for the mortgage you’re already paying.”
Too small loan
Even if you want to refinance, a lender may not be interested because the outstanding balance is too small. “[The] paper work’s the same for a $1 million loan,” Gumbinger said, “but not nearly as profitable.”
Plus, what you would save overall on interest wouldn’t be as much with a smaller loan balance.
Planning to sell or tap
If you’re planning on selling your home in a few years, a loan modification may be less expensive than refinancing your mortgage. (Credit: Getty Images)
Another “not-worth-it reason,” according to Gumbinger, may be when a homeowner plans to sell in the next year or two, so there’s little chance to get any benefit from a refinance.
“Depending on costs or the difference in monthly payment, there’s a chance that the refi can be a money-loser, too,” he added.
Similarly, older borrowers who intend to take out a reverse mortgage at some point soon — available to homeowners over 62 — may also want to avoid a refi no matter where rates are because the process pays off the existing loan and leaves no monthly payments.
The math doesn’t make sense
At least 15.2% of existing homeowners have a mortgage that’s over 10 years old, the FHFA survey found. Another 27.5% are right at the middle – with mortgages between 4 and 10 years old
“When you are well into the principal repayment portion of your loan — that is, you have far fewer than 30 years remaining on the term — almost the only way to achieve savings is to select a term that is only about as long as the remaining term or slightly longer, provided there is still a break in the interest rate compared to the existing loan,” Gumbinger said, “or to get a significantly lower interest rate compared to what your existing loan has.”
Gabrielle Smychynsky, left, a first time home buyer, and her fiancé Wes White, right, take their dog Lucy and their seven-week-old puppy Ada for a walk in their neighborhood in Myrtle Beach, South Carolina on July 13, 2022. (Credit: Madeline Gray for The Washington Post via Getty Images)
You also have to consider your break-even point – or the amount of time it will take you to recoup your new loan’s closing costs — along with balancing what your monthly payment will be with the total interest you’ll pay over the life of the loan.
“Even with a lower interest rate, it can sometimes be difficult to overcome the costs of restarting the loan all over again — paying for a home for 37 years instead of the 30 you may have started with, for example,” Gumbinger said. “A lower payment may be the outcome of a refinance, but at the cost of a higher total interest charge.
Gabriella is a personal finance reporter at Yahoo Money.
