Bay area home buyers lose closings due to lack of flood insurance

10:51 PM, Mar 30, 2010   |    comments
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Remax Metro realtor Eileen Bedinghaus

St. Petersburg, FL - The moment Congress took off for vacation can only be described as, "Irresponsible. Absolutely irresponsible."

At least, that's how Remax Metro realtor Eileen Bedinghaus sees it.

Congress blew off the bill, HR 4851, that renews flood insurance - a must-have for most Bay area homebuyers come closing time.

Bedinghaus says, as a result, "These deals are falling through." Bedinghaus lost two commissions this week because the closings were cancelled due to the buyers' who couldn't secure flood insurance.

Nearly 90 percent of Bedinghaus' business is short sales, where five months is the average wait time to close on a home. But time is not the only loss for folks caught up in this flood insurance lapse.

"These sellers, being two weeks from closing, they have leases that they've signed, deposits they've put down. The buyers either have property they've either sold on, or have to move out of," said Bedinghaus.

To make matters worse, the $8,000 tax credit for first-time homebuyers is only available until the end of April. That means, folks who are trying to close on a short sale right now that falls through may have to wait months before they get another closing date. By then, the credit will be gone.

"So, you've got real estate that's hard enough to sell as it is. You can't close the transactions. Then, the government isn't helping us," said Bedinghaus.

To see if we could get the government to help, we got in touch with both Bay area senators.

Republican Senator George Lemieux blamed the delay on the democrats. "Hopefully, we can find a way to a fiscally responsible agreement when Congress goes back into session," Lemieux told 10 Connects.

Democratic Senator Bill Nelson points the finger at political games, as well. "I'm asking the Senate to take it up and fix it as a first order of business after Easter," Nelson told 10 Connects.

Those answers are not good enough for Bedinghaus, who has had to break the bad news to families who desperately need to sell their homes. "They [Congress] need to have an emergency session and they need to say, 'OK, we're going to fix this right away'. They need to do this for these people who are suffering."

Congress reconvenes on April 12th when they will take up HR 4581, which also includes an extension of unemployment insurance benefits.

Erica Pitzi, 10 Connects Reporter

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