Besides additional costs for flood insurance going up, the FEMA maps have greatly expanded the area that are consider in a flood plain. On the mortgage side of a real estate transaction, we are constantly running into these surprises.
We were recently doing a mortgage for a client buying a $440,000 house, the client was putting 20% down. When the appraisal was being done the appraiser indicated that the property was partially in a flood zone. Which meant the buyer would need to have flood insurance.
It turns out that the sellers never knew anything about being in a flood zone or that they required flood insurance. As they were not in a flood zone at the time they purchased the property. The transaction almost fell apart, as the buyer wanted a discount on the purchase price as it was not disclosed that the property was now in a flood zone. The sellers finally discount the price by $10,000.
It was clear that the seller was not attempting to misrepresent this issue, as the maps changed since these sellers originally purchased the property.
These flood maps have been greatly expanded, so always ask and verify the information if you have the slightest concern.
Click on the title for the full article:
Homeowners Facing Higher Flood Insurance Rates
By: Lew Sichelman
"Homeowners will see increases in the rates they pay for flood insurance soon, if they haven't already, with owners of vacation homes seeing the biggest jump. But flood insurance is still one of the best deals going for them."
By: Lew Sichelman" As a present flood insurance purchaser this might be interesting to read if you didn't have to register to see what it says. Does it say if it will go up for people that have flood insurance BUT are not in a flood zone?
as we progress, homeowners find the cost of living increasing from profit driven regulations that are ushered in by banks, insurance and realty proponents seeking only to reduce their own liability and risk. the system is broken, the taxpayers are being abused and misrepresented by our legislators.
and that pool of money doesn't STAY LOCAL, it gets used to bail out homeowners in the poshest areas of the most expensive coastlines nationwide, prone to repeated natural disasters. it pays for remedies to inland communities ravaged by out of control levee systems that have been neglected by OTHER agencies, and watershed agencies.
regulation of this insidious industry is lacking, no, i think it is non existent.