Hurricane Aftermath: Mold Growing on Mortgages; Gulf Coast Mold

[Guest guest]

September 29, 2005 09:00 AM US Eastern Timezone

Hurricane Aftermath: Mold Growing on Mortgages; Gulf Coast Mold

Outbreak Threatening Financial Health of Mortgage and CMBS

Collateral; Jump in Mortgage Delinquencies Increasing Pressure on

Lenders

http://home.businesswire.com/portal/site/google/index.jsp?

ndmViewId=news_view & newsId=20050929005099 & newsLang=en

HARTFORD, Conn.--(BUSINESS WIRE)--Sept. 29, 2005--The horrific wake

of two hurricanes on the Gulf Coast includes near-universal mold

damage, a side effect that, while troublesome to home and business

owners, may have its largest consequences on real estate lenders.

With insurance coverage for mold damage no longer available, some

mortgage lending institutions have stepped up efforts to avoid

future mold risk by including the use of new mold prevention

techniques and mold-resistant building materials in their

construction lending guidelines.

Many of the mortgages on the Gulf Coast are going unpaid as

borrowers deal with more elemental issues like finding their loved

ones or recovering what is left of their belongings. However, for

mortgage lenders and those who securitize their loans in the

secondary market, the financial consequences could be dire.

" Since insurers recently excluded mold coverage on policies for

homeowners and businesses, the fate of exposed parties - mortgage

lenders, commercial mortgage-backed securities (CMBS) underwriters,

and investors - has been an open question, " said ,

principal of Environmental Assurance Group and a mold consultant to

mortgage lenders. " The recent hurricanes have brought the

financially catastrophic aspect of the mold issue to the forefront,

much the same way that 9/11 highlighted terrorism liabilities for

financial institutions. As insurers proceeded to exclude terrorism

coverage, they simultaneously built in mold exclusions, allowing

them to avoid billions of dollars in claims on Katrina and Rita

damages down the line. However, those in the lending community that

rely on healthy real estate loans and the underlying collateral to

do business did not respond quickly enough to avert the potentially

massive consequences of mold damage caused by the Gulf Coast

hurricanes. "

According to , lenders who sell portfolios of loans in the

secondary market are now facing the potential of being downgraded

because of increased delinquencies and the moldy condition of the

properties.

By including the use of newly developed mold-resistant building

materials and building practices in their loan documents, real

estate lenders mandate the borrower's builder to adhere to these

protocols. The newest approach includes on-site inspections for the

lenders to insure that the mold prevention building techniques are

being followed and the properly prescribed mold-resistant building

products have been used during construction or renovation.

Environmental Assurance Group

Based in West Hartford, CT, Environmental Assurance Group consults

the real estate lending industry on " Smart Practices " risk

management property damage, and liability management as it relates

to mold as well as other environmental exposures. The company's

clients include nationally recognized banks, municipalities and

school systems, healthcare facilities, hospitality property owners

and managers, as well as real estate developers and owners. For more

information, call 860-521-4747 or email perry-eag@...

Contacts

Kitchen Public Relations

Greg or Anne Steinberg, 212-687-8999

gjones@...

anne@...

[Guest guest]

tigerpaw2c <tigerpaw2c@...> wrote:

September 29, 2005 09:00 AM US Eastern Timezone

HARTFORD, Conn.--(BUSINESS WIRE)--Sept. 29, 2005--The horrific wake

of two hurricanes on the Gulf Coast includes near-universal mold

damage, a side effect that, while troublesome to home and business

owners, may have its largest consequences on real estate lenders.

Gahhh! If ONLY it were true. It would beat the actual consequences that are

going to measured in poor health.

It's not all bad, though. It was always about the money, and now the money guys

are getting hurt. At least now they'll be paying attention.

Serena

www.freeboards.net/index.php?mforum=sickgovernmentb

---------------------------------

for Good

Click here to donate to the Hurricane Katrina relief effort.

[Guest guest]

Sorry Serena but I can't feel so gleeful!

The consequence of mortgage lenders losing money through the expense

of defaults will only make it more difficult for future borrowers to

get mortgages on any home with previous water damage. You should

realize that the most trivial insurance claim resulting from any

water damage whatsover now becomes part of the permanent record for

that home and provides an opportunity for lenders and insurers to

charge higher rates or even decline insurance.

As it is already almost impossible to insure against mold in today's

climate no insurance means no borrowing or a requirement for much

higher equity in the loan.

And if you believe it is a is ok for a homeowner to have a house

with a history of water problems give it another thought. A

building with water damage history will be prone to further water

damage and infestations of mold and will be judged to be worth

somewhat less than a building without such history.

I have already noticed two insurance companies discontinuing writing

any homeowner policies for properties within 20 miles of the

Atlantic coast in Deleware and land.

Ken

=================================

>

> September 29, 2005 09:00 AM US Eastern Timezone

>

> HARTFORD, Conn.--(BUSINESS WIRE)--Sept. 29, 2005--The horrific

wake

> of two hurricanes on the Gulf Coast includes near-universal mold

> damage, a side effect that, while troublesome to home and business

> owners, may have its largest consequences on real estate lenders.

>

>

>

>

> Gahhh! If ONLY it were true. It would beat the actual consequences

that are going to measured in poor health.

>

>

>

> It's not all bad, though. It was always about the money, and now

the money guys are getting hurt. At least now they'll be paying

attention.

>

>

>

> Serena

> www.freeboards.net/index.php?mforum=sickgovernmentb

>

>

> ---------------------------------

> for Good

> Click here to donate to the Hurricane Katrina relief effort.

>

>

[Guest guest]

Ken, I have no idea how you got the impression that I am in any way " gleeful "

about this. That's my family down there, dude. A dozen of them couldn't get out.

Question my motives in that vein, and you and I are gonna have a major problem,

got it?

Take this as a prediction - the states of Lousiana, Mississippi, and Alabama

will step in and take regulatory action. The lenders and insurers will thrash

this out with each other. They may not care anything about you, but they're

bleeding money right now, and THAT matters to them. A lot. Underinsuring all

those properties is going to damage THEM. Do you not understand that if anything

could possibly force them to change their ways as regards this issue, Katrina is

it? I can't imagine a worse way for this to happen. But it's here, and they have

to deal.

tallandblue15 <jkg4902@...> wrote:

Sorry Serena but I can't feel so gleeful!

The consequence of mortgage lenders losing money through the expense

of defaults will only make it more difficult for future borrowers to

get mortgages on any home with previous water damage. You should

realize that the most trivial insurance claim resulting from any

water damage whatsover now becomes part of the permanent record for

that home and provides an opportunity for lenders and insurers to

charge higher rates or even decline insurance.

As it is already almost impossible to insure against mold in today's

climate no insurance means no borrowing or a requirement for much

higher equity in the loan.

And if you believe it is a is ok for a homeowner to have a house

with a history of water problems give it another thought. A

building with water damage history will be prone to further water

damage and infestations of mold and will be judged to be worth

somewhat less than a building without such history.

I have already noticed two insurance companies discontinuing writing

any homeowner policies for properties within 20 miles of the

Atlantic coast in Deleware and land.

Ken

=================================

>

> September 29, 2005 09:00 AM US Eastern Timezone

>

> HARTFORD, Conn.--(BUSINESS WIRE)--Sept. 29, 2005--The horrific

wake

> of two hurricanes on the Gulf Coast includes near-universal mold

> damage, a side effect that, while troublesome to home and business

> owners, may have its largest consequences on real estate lenders.

>

>

>

>

> Gahhh! If ONLY it were true. It would beat the actual consequences

that are going to measured in poor health.

>

>

>

> It's not all bad, though. It was always about the money, and now

the money guys are getting hurt. At least now they'll be paying

attention.

>

>

>

> Serena

> www.freeboards.net/index.php?mforum=sickgovernmentb

>

>

> ---------------------------------

> for Good

> Click here to donate to the Hurricane Katrina relief effort.

>

>

[Guest guest]

It's happening. If the lenders won't lend if the builders don't

build right then finally a change for the good is taking place! Now,

I wonder how many thousands of people in the Katrina damaged area

have to get sick before the government acknowledges the real dangers

of mold. Will Katrina end the great coverup that haunts us all? I

hope so!! This mold coverup is just like the cigarette coverup that

happened for how many years?

> >

> > September 29, 2005 09:00 AM US Eastern Timezone

> >

> > HARTFORD, Conn.--(BUSINESS WIRE)--Sept. 29, 2005--The horrific

> wake

> > of two hurricanes on the Gulf Coast includes near-universal mold

> > damage, a side effect that, while troublesome to home and

business

> > owners, may have its largest consequences on real estate lenders.

> >

> >

> >

> >

> > Gahhh! If ONLY it were true. It would beat the actual

consequences

> that are going to measured in poor health.

> >

> >

> >

> > It's not all bad, though. It was always about the money, and now

> the money guys are getting hurt. At least now they'll be paying

> attention.

> >

> >

> >

> > Serena

> > www.freeboards.net/index.php?mforum=sickgovernmentb

> >

> >

> > ---------------------------------

> > for Good

> > Click here to donate to the Hurricane Katrina relief effort.

> >

> >