Weather system threatens Caribbean

As Tropical Storm Fay began losing her punch over the Gulf Coastal states residents and visitors in the Caribbean were keeping an eye on Invest 94 in the southeaster Caribbean Sea.

Invest 94 was a tropical wave producing a large area of disorganized showers and thunderstorms.

Atmospheric conditions appeared conducive for some sort of development over the next few days and a tropical depression could form as it moves west to west–northwest at 10 to 15 miles per hour over the eastern and central Caribbean Sea.

Computer models at www.wunderground.com have Invest 94 tracking all over the map with two of the models putting the system near Jamaica and the Cayman Islands.

As for Fay, it was downgraded to a tropical depression, but cities along the Gulf Coast still weren’t in the clear.

Forecasters say the storm could continue to dump six to 12 inches of rain from the Florida panhandle to eastern Louisiana through the next several days.

As a tropical storm, Fay set a record with four landfalls in Florida and was blamed for at least 11 deaths there and another in Georgia.

Though the storm weakened as it traveled inland Saturday, with maximum sustained winds of about 35 mph, cities from Pensacola to New Orleans were still preparing for possible flooding.

"People automatically assume that if it weakens, the hazards go down with it, but in the case of rainfall, it’s not a function of wind speed," said Jamie Rhome of the National Hurricane Center in Miami. "Slow–moving systems dump a lot of rainfall."

At 11 p.m. EDT Saturday, the tropical depression was 30 miles north–northeast of Pensacola and 60 miles east–northeast of Mobile, Ala. It was moving west–northwest at 8 mph.

The forecast indicates the depression could slow in the next few days and possibly stall Monday over southern Mississippi or eastern Louisiana, Rhome said. It was expected to bring heavy rain to southern Alabama and Mississippi on Sunday.

The U.S. Coast Guard in Mobile closed numerous ports and waterways between Panama City in Florida and the Alabama coast to the east.

In Alabama, Gov. Bob Riley declared a state of emergency and officials opened shelters Saturday in the coastal counties of Mobile and Baldwin. Trucks capable of rescuing people from floodwaters were also in place. Utility officials said thousands of people lost power.

In the New Orleans area, which is approaching the third anniversary of Hurricane Katrina, forecasts called for several inches of rain. In St. Bernard Parish, site of some of the worst post–Katrina flooding, emergency officials were handing out sandbags Saturday.

Officials in Slidell, La., said emergency vehicles had been fueled and workers were on call.

Sandbags were also distributed in Ocean Springs, Gulfport and Biloxi on the Mississippi coast. The Air Force Reserve’s 403rd Wing evacuated aircraft Saturday from Keesler Air Force Base in Mississippi to locations in South Florida and Texas. The 403rd includes planes known as "hurricane hunters" that officials said would be available to continue to monitor Fay.

The Gulf Islands National Seashore closed a campground area and four barrier islands to the public.

Thousands of homes and businesses in Florida were inundated with flood waters this week as the storm worked its way north from its first landfall in the Florida Keys and zigzagged across the peninsula.

Fay’s center made its fourth landfall early Saturday about 15 miles north–northeast of Apalachicola, Fla., according to the National Hurricane Center.

Rains and strong wind gusts blitzed Tallahassee, the state capital, for more than 24 hours, knocking down trees and power lines and cutting electricity to more than 12,000 customers.

In southwest Georgia, officials said a boy drowned Saturday while playing in a drainage ditch swollen by 10 to 12 inches of rain.

His death, along with the 11 deaths in Florida, brings the toll from Fay to at least 35. A total of 23 died in Haiti and the Dominican Republic from flooding.

Fay’s wake caused widespread flooding along Florida’s east coast, especially in Jacksonville near the storm’s third landfall.

The Office of Insurance Regulation reported Saturday that roughly 6,700 homeowners filed claims, although only some were because of flooding.

Gov. Charlie Crist has asked the federal government to declare the worst–hit areas major disaster areas.

Fay had been an unusual storm since it was named Aug. 15. After hitting the Keys on Monday, it crossed open water again before hitting a second time near Naples on the southwest coast. It limped across the state, popped back out into the Atlantic Ocean and struck again near Flagler Beach on the central eastern coast. It was the first storm in almost 50 years to make three landfalls in the state as a tropical storm. Its fourth landfall as such was the first in recorded history.

"This is unprecedented in terms of the slow nature of this storm, the large circulation and the fact that it’s impacted probably about 90 per cent of the state with heavy rains and severe weather," state meteorologist Ben Nelson said.

Text message and cannabis cook up an explosive mix

A cell phone text message is believed to have sparked a fireball which razed a house and almost blew up a man who was cooking cannabis oil in his bedroom with the door closed, a court has been told.

Police said Darren Jeffries, 23, was caught in the fireball and ran "smoking from his head" to alert his partner and two children who were in the house.

Detective Constable Daniel MacIntosh said police speculated a text message sparked the fire.

Heavy vapour had formed as the cannabis and alcohol were heated on a small electric element in the Johnsonville house in January. As Jeffries opened his cellphone, the text lit up more than its screen - lawyer Noel Sainsbury said Jeffries "nearly blew himself up".

In Wellington District Court yesterday, Mr Sainsbury said the explosion had turned Jeffries' life around. He had been making the cannabis oil to feed his addiction.

"The good that has come out of that is that the shock - one can only imagine the shock - seems to have brought him to his senses."

He says he has sworn off cannabis. He pleaded guilty to trying to make cannabis oil and recklessly damaging the Philip St house with the fire that also burned his face and hands.

Jeffries, a furniture mover, was sentenced to eight months' home detention, to be followed by alcohol and drug treatment and anger counselling. Insurance covered the $88,000 damage.

Action demanded on Belfast floods

Flood victims in Belfast have been telling Newsbeat they want more help from the local authorities.

It's the second time in 14 months many homes in the city have been flooded.

There was so much water, the drains couldn't cope, forcing raw sewage into homes in the east of the city.

Hundreds of people had to be evacuated and many are still clearing up the mess.

The whole of Neil Shearer's ground floor was flooded.

"We've basically lost the cooker, washing machine, fridge, TV, the sofas and all of my DJ equipment. It's all wrecked," he said.

"We haven't even tallied it up yet but I'd say you'd be talking a couple of grand."

Stacks of furniture and electrical equipment are piled high outside people's homes on Merok Crescent where Neil lives with his mate Sammy.

One of the main issues residents are worried about now is hygiene.

Neil said: "Some of the neighbours in the street have said they've seen rats running about.

"Their concerns are that they've got young kids, you know what I mean?"

And that's what the Blakely family, four doors up, are worried about.

Not only was their street under three feet of rain water, it was covered in sewage too.

It all came through Phillip's back door.

He said: "We've got two young kids here and it was just raw sewage coming in.

"There was excrement floating in it. There was actually faeces and toilet paper floating about. It was just disgusting."

Sewage concern

Five-year-old Maya saw it all. She said: "It looked all brown. It was like all over the kitchen.

"It looked like a dirty old pool, deeper than my brother Jude."
And it's the second time in just over a year Phillip and Joanne have had to mop up this sort of mess.

Joanne is Phillip's wife. She said: "Last year we thought it was a one off, extremely bad weather that couldn't happen again.

"We put it down to bad luck and now 14 months later we can't believe we're sitting in the same position."

Joanne's main concern is the sewage left behind on the streets.

Joanne said: "It is a hygiene issue. How often can you be bleaching the floors and rugs?

"You can't be doing that everyday with two young children."

The Government's promising each house £1,000 in compensation, but many people say that's not enough.

Neil Shearer says they just need more help.

He said: "At the moment, to be honest with you, we're just not happy having to live upstairs for four months basically waiting for the flood water to pour out."

Flooding worry

Many people are worried about their homes being flooded again.

The rains have eased for now, but residents want something to be done in case the bad weather returns.

"We want to see the drains sorted out, even digging them up to see what the problem is," said Phillip.

The Blakelys say they won't be able to claim on their insurance for a third time and are concerned the floods may affect the value of their home.

Joanne says she can't go through all of this for a third time.

She said: "At the end of the day we want to see action not talk.

"It's all very well being given £1,000 compensation but it doesn't really go anywhere near.

"We just want to live in a nice house and keep it that way."

New Housing Bill Makes Substantial Changes to Reverse Mortgage Program

Aug. 11, 2008 – Reverse mortgages were not part of the problem in the current home financing debacle but Congress decided to make some changes, while they were trying to create a bill to stop the slide of the housing market and collapse of mortgage companies. The government has, among other things, raised the allowable limits on these FHA backed reverse mortgages to $417,000, up from about $362,000.

The limit can be increased to $625,000 if the borrower lives in a high housing-cost area.

The Housing and Economic Recovery Act that becomes effective in October “makes it easier and less expensive for seniors to access the cash value of their homes on a tax-free basis through a reverse mortgage, and expands the amount that can be borrowed,” writes Terry Savage, who frequently appears in publications and on television as an expert on personal finance.

Writing in TheStreet.com, August 3, she said:

“Reverse mortgages had nothing to do with the mortgage mess -- they are a safe and easy way for homeowners age 62 and older to maintain control and ownership, while tapping their home equity for tax-free cash.

“Now there will be a higher borrowing level on FHA reverse mortgages -- with $625,000 of home value as a cap, and a $417,000 borrowing limit. Fees will be capped at 2% of the first $200,000 borrowed, and 1% on the balance -- with an absolute maximum of $6,000 in fees.

“These rules apply to FHA mortgages, which insure the lender against the possibility that the homeowners will stick around far longer than anticipated!

“Other lenders provide "jumbo" reverse mortgages for higher amounts, taking larger fees to offset their risk. But there is no risk to the homeowner, who gets the money -- and the house -- for as long as the owner chooses to live there.”

Savage writes, “A reverse mortgage may be the perfect answer for seniors who want to stay in their homes, but have a cash flow problem. They can get a monthly stream of tax-free income, or a lump sum, and it's tax-free. Their ability to access the equity in their home does not depend on their ability to repay, as in the case of a home equity loan.

“Reverse mortgages were largely created for seniors who are cash-poor and house-rich — meaning they have a lot of equity in their homes but little or no savings,” writes Michelle Singletary, a personal finance columnist for The Washington Post.

What Singletary likes best about the new law is that it reduces fees on this type of loan. He also sees new protection for senior citizens in the bill.

New protections for senior citizens

He also points out that “except for title insurance, hazard, flood, or other such products, lenders are prohibited from requiring borrowers to purchase insurance, annuities or other similar products as a condition of getting a reverse mortgage.

“The law also restricts individuals who are originating reverse mortgages from working with, employing or providing incentives to other professionals trying to sell seniors other financial products as part of application process.

“Part of the reason the housing act included a provision for reverse mortgages was out of concern that seniors were inappropriately — and sometimes fraudulently — being sold other financial products.”

In the article carried by ProJo.com, he says, “In some cases, seniors have been encouraged to use the proceeds for their reverse mortgage to buy annuities or long-term care insurance. The Financial Industry Regulatory Authority (FINRA), which regulates the securities industry, has issued several warnings about reverse mortgages, particularly cautioning seniors about doing business with financial professionals who want them to obtain a reverse mortgage in order to fund a particular investment product.”

Many others, however, are not as enthusiastic as Savage and Singletary.

There are a number of problems

Author Dan Solin says, “While reverse mortgages can be a valuable source of cash for seniors, there are a number of problems with them.

“The fees are very high. Typical fees for a reverse mortgage on a $250,000 home can exceed $25,000,” he says.

He also points out that interest charges are added every year the loan remains outstanding.

“While you may not care as long as you get your money, you should realize that the diminution in the remaining equity in your home will affect the money you will receive if you sell your house and the amount of money your heirs will receive upon your death,” he says.

Solin sees the reverse mortgage is “particularly ill-suited” for those who will only remain in their homes for a “relatively short period of time.”

He also cautions that if a seniors financial situation causes them to rely on government programs (like Medicaid), the receipt of proceeds from a reverse mortgage may cause them to fail to continue to qualify for these programs.

He also reminds seniors that a reverse mortgage does not alter your obligation to maintain your home, pay property taxes and insurance.

“Before committing to a reverse mortgage, seek financial counseling,” he says. It is required for FHA-insured reverse mortgages, but even if you are considering private reverse mortgages, it is critically important that you understand the full financial ramifications of these loans.

Another expert that urges caution on senior citizens is Frank N. Darras, who claims to be the nation's leading disability and Long-Term Care insurance lawyer.

Reverse lenders reignite their marketing programs

“When the President signed into law a $300 billion housing bill to help homeowners renegotiate their mortgages, reverse mortgage lenders reignited their marketing programs focusing on seniors, says Darras.

Darras says the intrigue of reverse mortgages has been that as you age, you can have "your house pay you." The convincing argument is that reverse mortgages can be used to pay for living expenses, prescription drugs, health care, or to pay off an existing mortgage.

Reverse mortgages are actually, in legal terminology, Home Equity Conversion Mortgages (HECMs) and are insured by the Federal Housing Administration. HECMs allows folks to tap home equity and not have to make monthly payments. The HECM has been limited to the value reflected in a home's appraisal. The range and loan limits were, before the new law, between $200,160 and $362,790, depending on the location of the home.

Darras says lenders are dangling a golden carrot with phrases like "Seniors may be able to borrow as much as $625K in home equity to use any way they please!"

"Be very careful," warns Darras. "Rising costs on a fixed income can be a dangerous combination. Don't let fear and the lure of an easy solution drive your decision. The new legislation is promising to make it less expensive to borrow but it can cost you in the long run, if you are not careful."

Keep in mind that the amount of your loan will depend on the home's value, location, interest rates and the age of the youngest borrower on the note. Also remember, even though the loan will come due only when you die, sell or move away permanently, it will have to be repaid somehow. Are you setting up a financial disaster that could wipe out your life's savings, your estate and leave heirs with financial obligations they cannot meet?

If you are not sure about taking out that reverse mortgage, wait until the new law comes into affect in October and more protections are in place to protect you.

“These days, the rest of your life can be 30-40 years, so make your decisions carefully, regardless of great marketing, fancy brochures and short-term fixes,” says Darras.

Insurance expert warns Brits over holiday homes

A leading industry expert on insurance has advised Brits to make sure their holiday homes are fully covered.

Public relations manager for the AA, Ian Crowder, has said that too many Brits are forgetting to take out or renew insurance on their second homes.

He has also estimated that a third of all UK households don''t have contents insurance at all and many that do are underinsured.

He said: "It''s important to make sure you''ve got sufficient cover for everything and that you do include everything."

Mr Crowder also advised holiday home owners to exercise common sense.

"If … you''ve left the main window wide open and you go out for the day, and someone comes in and does the place over, you''re not going to get a very sympathetic ear from the insurer," he commented.

Zurich Private Clients discovered in a recent survey that the average holiday home contained valuables worth £15,200.

The latest statistics from the Department for Communities and Local Government showed that 211,000 Brits had second homes abroad in the year between 2005 and 2006.