This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Sandy's Cost Legacy Is Strain on Middle-Income Owners

NEW YORK (TheStreet) -- Richard Chimienti and his wife grew up by the bay in Long Beach, N.Y. and could not dream of living anywhere else.

In 2007, right at the market peak, the couple, both teachers, bought a house just 200 yards from the water for $520,000. Never having seen serious instances of flooding they did not spend too much time worrying about a serious disaster. Their lender required them to carry flood insurance, which they duly purchased.

When Superstorm Sandy struck in the fall of 2012, their house was inundated with 4 feet of water. Insurance adjusters assessed the damage at $130,000, which Chimienti collected.

Not long after that, Chimienti received a letter from FEMA(Federal Emergency Management Agency) and the city of Long Beach that essentially told him that his house had suffered so much damage that it had to be either elevated or knocked down and rebuilt in order to be in compliance with the community's floodplain ordinance.

Must Read: AZO: Insiders Vs. Shorts

His contractors told him that elevation was not an option and he had no choice but to tear his home down and rebuild. But all he could claim from his insurance was another $30,000 to meet the increased cost of compliance, even though the maximum payable amount is $250,000.

"The house was totaled," says Chimienti. "Why not give me the maximum $250,000 that the insurance covers? I fought with them for months but I didn't win that battle."

With the insurance money barely meeting the cost of rebuilding, Chimienti turned to FEMA for assistance. But the organization directed victims to the Small Business Administration first. The SBA offers disaster victims home loans upto $200,000 for 30 years at interest rates as low as 1.68%.

The SBA determined it would take $380,000 to rebuild the house and offered him a loan of $220,000. Chimienti took the loan, believing he could still qualify for federal grant money, which he could then use to pay off the loan.

But he later found that he had been misled and that the fine print had eluded him. It turns out, qualifying for an SBA loan makes him ineligible for the grant. Now he wishes he had not followed FEMA's directions in applying for the loan.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $118.03 -0.71%
FB $105.41 -0.31%
GOOG $748.15 -0.02%
TSLA $229.64 5.22%
YHOO $33.16 0.61%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs