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Mortgage News Daily combines the expertise of some of the housing industry's leading minds with the power of social media to offer an always lively, constantly evolving web community. MND communicates breaking news, streams video, and provides expert opinion and commentary to a community of interested market professionals and curious consumers.House Authorizes 5-Year Extension of National Flood Insurance Program
The House of
Representatives passed legislation on Thursday which would authorize the
National Flood Insurance Program (NFIP) for the next five years. H.R. 5114 would also make a number of changes
to the NFIP. The flood insurance program
has been operating under a series of temporary extensions for much of the year while
more permanent legislation has been stalled in the Senate. The insurance lapsed completely on June 1 and
was unavailable until the Senate passed a temporary and retroactive extension until
September 30 earlier this month.
During
June it was estimated that some 1200 house closings were postponed or cancelled
every business day because borrowers could not obtain the required insurance.
NFIP is the primary source
of reliable, affordable flood insurance coverage for more than five million
American homes and businesses. Homes within a flood plain as designated on
a Flood Insurance Rate Map (FIRM) are required by lenders to be covered by
flood insurance. Homeowner hazard
insurance generally does not cover damage done to a property by water once reaches
ground level.
The bill, introduced by Rep.
Maxine Waters (D-CA) makes a number of changes to the program. First, it phases in actuarial changes to
properties that were built before the first FIRM was effective within a
community. It also raises maximum
coverage limits, provides notice to renters about the availability of insurance
for their household contents, and establishes a Flood Insurance Advocate
similar a model used by the Internal Revenue Service.
Floor insurance is also available
to homeowners who live outside of a designated flood plain and is increasingly
recommended as the U.S. has, in recent years, experienced serious floods in
areas that have not flooded in the past.
As the Federal Emergency Management Administration, which administers
the program, has updated flood insurance maps, more homeowners are also becoming
subject to the insurance requirements. H.R. 5114 delays the
implementation of new rate maps so homeowners in a neighborhood newly
classified as a flood zone will not be immediately burdened with insurance
costs.
Congresswoman Waters said,
"This legislation addresses the challenges posed to communities nationwide by
the imposition of new flood maps. I saw these challenges in my home city
of Los Angeles, and earlier this year, I was able to assist homeowners in the
Park Mesa Heights area of Los Angeles who had been mistakenly placed in a flood
zone. In this case, FEMA acted quickly to respond to new data and correct the
mistake. However, there are thousands of homeowners nationwide who now find
themselves in flood zones and subject to mandatory purchase
requirements. H.R. 5114 will protect them."
Permanent extension of the
program is still pending passage in the Senate.
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House Authorizes 5-Year Extension of National Flood Insurance Program
The House of
Representatives passed legislation on Thursday which would authorize the
National Flood Insurance Program (NFIP) for the next five years. H.R. 5114 would also make a number of changes
to the NFIP. The flood insurance program
has been operating under a series of temporary extensions for much of the year while
more permanent legislation has been stalled in the Senate. The insurance lapsed completely on June 1 and
was unavailable until the Senate passed a temporary and retroactive extension until
September 30 earlier this month.
During
June it was estimated that some 1200 house closings were postponed or cancelled
every business day because borrowers could not obtain the required insurance.
NFIP is the primary source
of reliable, affordable flood insurance coverage for more than five million
American homes and businesses. Homes within a flood plain as designated on
a Flood Insurance Rate Map (FIRM) are required by lenders to be covered by
flood insurance. Homeowner hazard
insurance generally does not cover damage done to a property by water once reaches
ground level.
The bill, introduced by Rep.
Maxine Waters (D-CA) makes a number of changes to the program. First, it phases in actuarial changes to
properties that were built before the first FIRM was effective within a
community. It also raises maximum
coverage limits, provides notice to renters about the availability of insurance
for their household contents, and establishes a Flood Insurance Advocate
similar a model used by the Internal Revenue Service.
Floor insurance is also available
to homeowners who live outside of a designated flood plain and is increasingly
recommended as the U.S. has, in recent years, experienced serious floods in
areas that have not flooded in the past.
As the Federal Emergency Management Administration, which administers
the program, has updated flood insurance maps, more homeowners are also becoming
subject to the insurance requirements. H.R. 5114 delays the
implementation of new rate maps so homeowners in a neighborhood newly
classified as a flood zone will not be immediately burdened with insurance
costs.
Congresswoman Waters said,
"This legislation addresses the challenges posed to communities nationwide by
the imposition of new flood maps. I saw these challenges in my home city
of Los Angeles, and earlier this year, I was able to assist homeowners in the
Park Mesa Heights area of Los Angeles who had been mistakenly placed in a flood
zone. In this case, FEMA acted quickly to respond to new data and correct the
mistake. However, there are thousands of homeowners nationwide who now find
themselves in flood zones and subject to mandatory purchase
requirements. H.R. 5114 will protect them."
Permanent extension of the
program is still pending passage in the Senate.
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