Storm Puts a Drag on Property Sales - Wall Street Journal

We sent an email to: Please click on the link inside the email to complete your registration Please register to gain free access to WSJ tools. Realtors This service is temporary unavailable due to system maintenance. The username entered is already associated withanother account. Please enter a different usernameThe email address you have entered is already in use. Please upgrade your browser now to enjoy a better experience: Why upgrade. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visitwww. Lenders' requests mean that closings on thousands of homes under contract could be put on hold, according to the National Association of Realtors. While any suspensions would be temporary, they could result in significant financial losses for mortgage brokers and consumers at a time when the housing industry is already under severe stress. But earlier that week Wells Fargo ordered a reinspection of all properties in areas affected by the storm. Pace's seller sustained damage to his home when a tree fell, and rushed to fix it so they could proceed with closing. Pace said the seller offered to put $1,500 in an escrow account for the buyers, so they could go ahead with closing and handle the repairs on their own. But "the bank will not accept doing anything in escrow," he said. Before closing, "the inspection must state that the property is sound and habitable and that the collateral is in the same condition as of the date it was originally appraised. With many other lenders, however, it is the home buyer who has to foot the reinspection bill, which can run as high as $400. If the closing is delayed beyond the period of the rate lock, usually about 30 days, borrowers for a $400,000 loan, for example, can expect to pay $120 a day to extend it, Mr. Some lenders charge a flat fee, which can exceed $2,500 on a $400,000 mortgage. But they decided to wait to ensure the seller's insurance covered any damage. The lender then asked for a post-storm inspection of the property. Their loans are made based on the homes as collateral, so banks naturally want to reassess the terms of a loan if the collateral is damaged. If it does expire, real-estate agents say sales of homes in coastal and other flood-prone areas, where insurance is required, would grind to a halt. When the flood program was allowed to lapse for about a month in summer 2010, roughly 47,000 home sales were delayed or canceled, according to the National Association of Realtors. All Rights ReservedThis copy is for your personal, non-commercial use only. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visitwww. Stocks Claw BackStocks erased a steep loss late in the day amid a report that China may come to the aid of the euro zone. Perry is a simple one: Is he too ideological to win a general election. As it happens, writes Gerald Seib, that is the same question that dogged Reagan in 1980. To view or change all of your email settings, visit the Email Setup Center. Is it possible that a world without religion can be, on the whole, a better place to live. Do libertarians and the Republicans really have so much in common. Is there any wonder why he doesn't get nominated for presidency as long as he is a Republican. Religion & Ethics Should we be concerned about intense wealth disparity in the U. The OBAMA Administration Should tax breaks end for oil companies and wealthier Americans to help pay for a jobs stimulus program. To view or change all of your email settings, visit the Email Setup Center. And is it still wise to hold on to gold and gold mining companies. The language you used does not comply with community standards. The Journal Community encourages thoughtful dialogue and meaningful connections between real people. We require the use of your full name to authenticate your identity. The quality of conversations can deteriorate when real identities are not provided. Please enter your first and last name First name: Last name: Create a Journal Community profile to avoid this message in the future.