New Flood Insurance Proposal
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On Friday, October 24, 2014 five government agencies made up of The Federal Reserve Board, Farm Credit Administration, Federal Deposit Insurance Corp., National Credit Union Administration, and the Office of the Comptroller of the Currency submitted a New Flood Insurance Proposal to Congress. The New Flood Insurance Proposal would go into effect on January 1, 2016, and implement changes to the Homeowner Flood Insurance Act of 2014, which amended the Flood Insurance Law passe about 2 years ago that created a financial nightmare for homeowners with properties in a Flood Zone.
The Biggert-Waters Act substantially raised Flood Insurance premiums. This not only created a financial hardship for homeowners with properties in a Flood Zone, but also made those properties very difficult to sell due to the astronomical Flood Insurance premiums.
The New Flood Insurance Proposal requires banks to escrow premiums and fees for mortgages or refinances on properties requiring flood insurance after January 1, 2016. The new proposal will also no longer require flood insurance on detached structures for properties in flood hazard zones as long as the property is not used as a residence.
The New Flood Insurance Proposal would further protect homeowners with properties in Flood Zones by limiting how much the annual Flood Insurance premium can increase by. It will also make it possible for the current rate to remain with the property when it is sold.
It appears the government is trying to rectify the Flood Insurance mess they created in 2012. Let's hope the New Flood Insurance Proposal is truly a fix and does not a create new issues.
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George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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