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from Local Attorney, Michael H. Wasserman

Monday, August 23, 2010

Latest Real Estate Closing Disaster? Federal (flood) Disaster Declaration

Ronald Reagan famously remarked that "[T[he nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'"

I am reminded of the quote as a wave of emails and voice messages cascades through the office today. Last Thursday's declaration that Cook, DuPage and five other local counties are federal disaster areas should be a great help for the hundreds of homeowners and small business that were adversely effected by last months severe storms and flooding.

The disaster declaration however is fast becoming a disaster of its own for many Chicago area buyers and sellers hoping to close their contracts this week.  

As a direct result of the declaration of a flood-related disaster area, most mortgage lenders are requiring re-inspections on all appraisals dated August 7th, (the last date of the storm/flooding "incident" or earlier. 

How many closings will be delayed as lenders and appraisers scramble to document the absence of flood damage to homes now under contract?