Important information post Hurricane Sandy for buyers and sellers of Coastal Properties. November 1, 2012. www.Bankrate.com
The good news: Mortgage rates snoozed this week as superstorm Sandy forced financial markets to shutter for two days and delayed loan closings nationwide.
The bad news: Sandy also put many refinancers and homebuyers across the country in a holding pattern as lenders postponed closings in cities affected by the storm and nearby areas. They want to re-inspect the homes with pending closings to make sure that banks are not financing a damaged property.
Even borrowers whose homes were not damaged should anticipate closing delays, says Michael Becker, a mortgage banker at WCS Funding in Baltimore. “Some (loan) investors want a re-inspection of every single property in or near a disaster area,” he says. “I’ve talked to a lot of my borrowers, and they say that their homes are fine, but someone will have to go out there to re-inspect the properties, at least the outside.”
Buyers who are under contract to purchase a home in an area affected by the superstorm may also have trouble closing their loans even if the house didn’t sustain major damage. That’s especially true for Federal Housing Administration borrowers, because the FHA has strict inspection policies, Becker says.
A buyer who is under contract to buy a house that has been damaged by the superstorm can likely walk from the deal if the home can’t be repaired by the closing date, Garfinkel says. It depends on how the contract was written and how badly the property was damaged, he says.
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