The excessive increase in insurance policies for condominiums after the passage of Hurricane Maria, at a rate of 200 to 400 percent, must be addressed through legislation in the face of the threat of the chain effect for so many sectors, the bank warned.
“We have been greatly impacted by the increase in condominium policies whose increase in monthly payments have had an increase of 200 to 400 percent. We are talking about that in 2017 a resident who paid $ 3,630 for his ‘hazard’ policy, in 2018 saw an increase to $ 8,088.67, more than $ 4,000 annually. In monthly payments, that translates from $ 302 to $ 674, “explained the president of the Association of Banks of Puerto Rico, Wilma Alejandro, during the conservatory” Situation of Condominiums in Puerto Rico a year after Maria’s passage and its Economic Impact “held at the Luis A. Ferré Building of the Capitol under the auspices of the office of Senator Eric Correa.
“This means that if we have a client in ‘loss mitigation’ who can not pay $ 600 of mortgage, we are afraid to look for the mechanisms to, through legislation, satisfy their needs and not have an increase in numbers. ‘ the mitigation ‘and executions, “Alejandro said.
The increases in policy have registered while there are still hundreds of condominiums in the processing of your claim, either in the initial stage, in the negotiation stage or in the appeal phase, as a result of the damage suffered by the passage of the hurricane. María more than a year ago.
“This results in the abandonment of property, because families can not comply with the promissory note and what they assumed as responsibility when they made the loan, and that will destabilize the values,” said Alejandro.
As for the reserves in construction loans, he said during his presentation, the contingencies are affected by increasing the probability of default of payments, the contribution of differences by the developer while affecting the process of renegotiating terms and conditions.
The Federal Housing Administration (HUD) will not increase the limits of the Section 8 program, opening the possibility that families will not be able to pay the rent increase, in turn affecting projects of private homes and low and medium-sized private rentals. income.
As part of that domino effect, property financing will be complicated. The President of the Association of Banks explained that there will be a difficulty in the qualification to acquire financing and greater need for approval and renovation of condominiums under the FHA program.