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Proposed FEMA flood rule could have big lender implications

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Mortgage Professional America | 10 Nov 2014, 08:37 AM Agree 0
Originators that lend money for homes near water could see some big changes soon if the regulator’s new rule is adopted
  • | | 10 Nov 2014, 10:39 AM Agree 0
    No one is forced to purchase in a flood zone. It is strictly a volunteer decision. If someone wants to risk their lives and property so be it! But don't expect the taxpayer or Big Brother to subsidize one's folly. It is no different than property owners who build custom homes in high risk wildfire areas in the West or the wealthy who build waterfront homes that get washed away by the tides in Malibu Beach. The fire zone and beachfront people know the risk up front, are willing to pay the price for coverage and don't snivel for disaster funds when it happens.
    Through the years we read where Fargo and other middle west towns get washed out again and again, and by gum and by golly, the locals are determined to rebuild in the flood zones…………..with government disaster allowances and urban renewal funds. Flood zones have been delineated for decades now which enables homeowners to make informed decisions prior to purchase. There is no excuse for repeating a foolish gamble and expecting your neighbor to cover it, no more than I should expect my neighbor to cover my losses at the track.
  • | | 10 Nov 2014, 12:19 PM Agree 0
    Many people purchased their homes BEFORE FEMA put that area into a flood zone.
  • | | 10 Nov 2014, 01:03 PM Agree 0
    It's not that FEMA put that area into a flood zone, it's that the area was finally mapped as being in the floodplain. People should have a general expectation that if they are buying a home near the water, there is a fairly good chance that it's going to be in or near a floodplain.
  • | | 10 Nov 2014, 08:27 PM Agree 0
    That's all well and good but it's the people whose house or property has never been floooded who are getting screwed. FEMA finds a ditch anywhere near your house and your on a flood plain and most of the property was put on a flood plain long after they purchased. I'm not kidding, if you own a house by a brook, FEMA will put you on a flood plain. The guy that wrote the first comment was pretty goddamned smug..he must have been a republican...
  • Glen Weinberg | | 11 Nov 2014, 09:22 AM Agree 0
    The remapping of the flood plains is a huge issue and expense. It is interesting that they are going to force companies to escrow the policies. From a lenders perspective (I'm a hard money lender) the escrowing is not an issue since we already do this on all our mortgages. In regards to the comments above, the new flood zones can be problematic, I know properties that have now been included in the flood zone that are clearly not in a flood zone costing the homeowners thousands (I'm not talking about if you live in the Florida Keys), the remapping has impacted a number of properties throughout the country (not just the coastal areas) causing huge expenses for homeowners (if you look at flood policies, the amounts the policy pay are pretty limited so homeowners are paying allot for little gain).
  • Loannetter | | 11 Nov 2014, 04:55 PM Agree 0
    In the Pacific Northwest many properties are in flood zones. One problem I have noticed that some Sellers do not disclose this information although a flood search online costs a mere $15. Cash buyers beware - especially for undeveloped land. A lender will require a flood search. The maps are routinely redrawn so don't count on 'local hearsay'.
  • Easy E | | 12 Nov 2014, 12:32 PM Agree 0
    FEMA has been doing all they can to collect as much premium as possible. I'm currently getting screwed by them to the tune of $500 per year as they roped me into a flood zone 6 years after we purchased our property. We were in the house when a 500 year flood hit and the actual structure was still 50 feet from water. Big government bullcrap has to go. People are some day going to realize that government is a monopoly, they have no accountability so they slowly do what ever they want. You can't reason with them at all and every program they institute ends up a damn mess. Postal service, FEMA, IRS the list goes on and on. And we just continue to hand power to the politicians that whore it out for money and votes.
  • dismayed by lack of readers' info | | 12 Nov 2014, 05:55 PM Agree 0
    The person who commented about the purchase of flood insurance as a choice is mistaken. If your mortgage is federally insured, then your mortgage holder requires you to carry flood insurance if your property has been identified by FEMA as being in a flood zone.
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