As part of Retail Traffic's continuing conference coverage, we will be providing updates from this week's CREF/Multifamily Housing Convention & Expo 2007 being hosted by the Mortgage Bankers Association in San Diego.
One of the hot topics at the show is insurance. This year marks the expiration of the latest version of the Terrorism Risk Insurance Act. Beyond that, there are also concerns about the availability of wind and flood insurance—especially with disputes and hefty payouts still being resolved from 2005's killer hurricane season.
There have been a lot of conflicts concerning the damage caused by hurricanes and whether it was caused by wind or water. That's important because it affects who is responsible for recouping the property owner. In addition, with more big storm seasons expected, insurers have been reluctant to provide insurance in coastal markets.
The loss of any of these types of insurance threatens to put mortgages into default and putting a crimp on what continues to be a booming industry. As it stands, 2006 is expected to be a record year for originations. (MBA is still computing final numbers.)
No one wants the party to end because of an issue like insurance. So 2006 promises to be a big year as real estate and insurance groups push for an extension of TRIA and for some kinds of similar backstop or legislation to make wind and flood insurance more available and affordable.