Hurricane Sandy, which is bearing down on the Mid-Atlantic all the way up to New England, is expected to delay thousands of mortgage closings on Monday and Tuesday at the very least, according to industry officials.
Marc Savitt, president of the National Association of Independent Housing Professionals, said he expects the coming power outages will definitely affect mortgage business in the New York/New Jersey as well as New England.
“It all depends on how long power is out,” Savitt told National Mortgage News on Monday.
A key problem for mortgage professionals is the final inspection before closing, he noted. “If you have no power you can’t do these inspections. The lender will have to schedule another one.”
The NAIHP has 9,000 members nationwide with heavy representation from loan officers, mortgage brokers and appraisers.
Savitt is also the owner of The Mortgage Center, a brokerage firm located in West Virginia, about one hour from the greater Washington Metropolitan area. (On Monday the federal government was officially closed with mass transit via the Metro system shuttered.)
Savitt said he actually has two closing scheduled for Monday. “I think we’ll get at least one of them done. Our lights are on and we’re open for business.”
Parts of the Mid-Atlantic – including the Washington area – are expected to suffer power outages beginning late Monday which will affect the ability of consumers to file online applications and loan officers to close pending deals.
Brian Benjamin, who runs Two River Mortgage in Northern New Jersey, said he expects major delays in loan closings. “You have all the companies shut down for at least two days. Then every area that is affected will require re-inspections on the appraisals assuming the house isn’t wiped out.”
Benjamin added: “Damage is a loss in revenue if it was in the process of purchase or refi.”
Two River Mortgage is also concerned about property damage in Monmouth and Ocean counties on the New Jersey shore where values (in the form of ‘rateables’) are near the $66 billion range.
Mortgage bankers, in general, are enjoying one of their best origination months of the year thanks to ultra low mortgage rates. Recently, the Mortgage Bankers Association increased its estimate on 2012 production to $1.7 trillion. A year ago it thought fundings would total just $900 billion in this year.