According to Criterium Engineers (a nationwide firm quoted in the July 1, 2009 Wall Street Journal article “Cracked houses; what the boom left behind”), 25% of homes constructed during the ‘boom’ will have a significant structural defect claim. ONE IN FOUR. Banks and investors placing these properties into the stream of commerce will have this exposure for years, as construction defect claims usually happen 3-7 years after the sale. One can elect to be ‘reactive’….ie, have no insurance coverage and no ‘plan’ for the REO tsunami. However, that is a very expensive approach. A PROACTIVE approach provides insurance coverage for the serious losses as well as products to capture claims in contract and thus avoid years of expensive and time consuming tort litigation.
Current Legal research shows that in today’s economy, banks and investors are exposed to “placing REO properties into the stream of commerce”, and AS IS contracts, or ‘just being a bank’ won’t keep a bank/investor out of the cross hairs of plaintiff lawyers.
Insurance Specialty Group (ISG)has specialized in the construction industry for 12 years, coast to coast.
