Mortgage Bankers Assoc: Lack of Terror Bill Costs $8.2B

WASHINGTON, DC-The Mortgage Bankers Association of America has released evidence indicating that $8.2 billion worth of commercial property developments have been eliminated, delayed or altered due to the high price tag on terrorism insurance or its unavailability altogether. MBA’s survey of 25 commercial real estate firms concluded that $3.7 billion in deals have been canceled and $4.5 billion in such arrangements have been postponed or have suffered a change in pricing. The numbers represent activity since the first of the year and are only partially a result of the slumping economy.

“We are looking at billions of dollars in commercial financing that has been killed in the first half of the year because thus far Congress has been unable to reach agreement on a bill,” MBA chairman Jim Murphy says in response to the survey results. “The delay has been costly, and those costs will continue to go up the longer the delay.” While the Senate, trailing the house by months, finally passed terrorism insurance legislation in June, the congressional chamber has yet to take the legislation up in conference. The Senate is scheduled to retire for its month-long summer recess on August 5, leaving real estate industry officials holding their breath.