After what seemed to be countless mini extensions of the Flood Insurance program, Congress finally did something right and sent a 5 year extension to the President who signed it on May 31, 2012. It seemed like ever other month one of the insurance people who attend my MLS Thursday breakfast meetings would stand up and warn about there being no flood insurance available. Then the next week or two, they would come back and announce only a two month extension.
I have mixed feelings about this Program, but realize we cannot do without it for the many homes located in flood zones. Besides not being able to get a mortgage without flood insurance for those located in one, there are the constant number of news stories lately about unusual weather patterns involving either too much rain or none and historic droughts. Thus, even though it may be wrong for someone who's home continues to be flooded often to be allowed to claim damages and compensation time after time, for now it is all we have. I do feel, these properties which continually flood need to be given seriously thought about what to do with them and maybe reach a permanent solution such as moving them or if unfeasible, destoring them and relocating the homeowner. Just my two cents, what is yours?
Here is the a story about this happening from National Association of REALTORS® in their last's month REALTOR®MAG.
Why Flood Reauthorization is Such a Big Win
On July 9, 2012, in Breaking News, Mortgage Financing, Politics & Government, by Robert FreedmanPresident signs bill into law. Click photo to access new law. Source: White House.
REALTORS® claimed a big victory last week when President Obama signed into law the 5-year reauthorization of the National Flood Insurance Program. NAR spent years advocating on behalf of this legislation and its 1 million members, by participating in several calls for action and making passage a talking point on Hill visits for years, were instrumental in getting it finally passed.More than just helping to get the law passed, REALTORS® were instrumental in making it a better piece of legislation.
First and foremost, the law reauthorizes federal flood insurance authority for the long-term, eliminating the constant uncertainty that flood insurance wouldn’t be available in the 21,000 communities where it’s required for obtaining a mortgage. Second, it maintains comprehensive coverage for all properties, including second homes and vacation homes. Third, it’s a revenue raiser, which will help pay down a loan from the U.S. Treasury to cover the massive Hurricane Katrina costs from 2005. Fourth, it improves the accuracy of flood plain mapping, which will continue a trend toward improved mapping so that the industry has clarity over where flood insurance is required and where it’s not. And fifth, it builds in the opportunity for further improvements to the entire flood insurance program over time, so if things aren’t working well, NAR and others will know it and have a framework for getting improvements built in.
There are many other positives to the new law, including a much improved appeals process for home owners to challenge the accuracy of the flood plain map that the federal government is using for their area.
As NAR President Moe Veissi says in a previous post on this blog, getting this reauthorization and reform program enacted into law shows that bipartisanship in the federal government still exists when the need is clear and the legislation is reasonable. It’s no surprise that it’s a program important to real estate that serves as a bipartisan vehicle for cooperation, because real estate in general and home ownership in particular are among the most bipartisan matters the federal government deals with on a regular basis.
There will be plenty of legislative and regulatory challenges for real estate in the months and years ahead, but for now, real estate shows once again it has the power to bind lawmakers together for the common good.
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