WEST HARTFORD, Conn - Lenders' fear of environmental risks has delayed transactions for 87% of the commercial mortgage bankers surveyed by an environmental insurer based here.
The nationwide survey of 30 top commercial mortgage banking firms also showed that 70% have experienced previously unsuspected environmental problems on properties on which they arranged loans, and that 40% have backed out of deals at the last moment due to fears of liability for cleanup costs.
"We've started to see public sector lenders such as the state of Connecticut Department of Housing put environmental insurance on everything they finance as a safeguard," said Charles Perry, president of Environmental Warranty Inc., which conducted the survey. "The private sector is still terrified and uncertain how to deal with the issue," he added.
The survey also showed that groundwater contamination was the most feared type of pollution.