$8 billion-plus in deals affected by terrorism insurance issues.

Position:Commercial - Commercial property loans - Brief Article
 
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ACCORDING TO THE MORTGAGE BANKERS Association of America (MBA), the lack of comprehensive and affordable terrorism insurance for commercial properties has killed an estimated $3.7 billion in deals so far this year and has delayed or changed the pricing on another $4.5 billion.

In a June survey, MBA asked its commercial members whether the lack of terrorism insurance had affected their business and to what extent. The 25 firms responding included some of the largest commercial real estate finance firms in the country. Forty-four percent reported that the lack of terrorism insurance had greatly affected their ability to make loans on commercial properties, while 40 percent reported that the lack of terrorism insurance had affected their business somewhat. Only 16 percent reported they had experienced no effect.

Last year MBA commercial membership reported originating $73.8 billion in commercial and multifamily property loans, Lending on commercial properties has been much slower in the first half of 2002, due in part to the economy, but also due to the inability of the property owners to obtain sufficient terrorism insurance to protect the interests of investors in these loans, according to...

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