I'm in the process of refinancing my property in Hawaii. New construction home which I closed last year in february 2008. I have a signed disclosure statement saying that the property is not in a FEMA designated flood zone. During the refinance process a year + later I come to find out that I am indeed in a flood zone and the bank is requiring insurance. I contacted the developer and they said they are working on changing the flood zone and the bureaucratic process is holding it up.

I have the elevation certificate that was provided by the mortgage agent submitted a few months before closing and it's listed as flood zone A0. The developer said they sumbitted a conditional letter of map revision (CLOMR) for zone X a few years ago, however that does not constitute a change in the NFIP. They submitted a LOMR 2 weeks prior to closing. The property, according to the bank and updated FEMA maps, is located in zone A0.  The flood zone hasn't changed since I closed as the elevation certificate says. The developer even provided a plot of the property showing the property out of the flood zone.  I've come to find out this is what they are attempting to change the designation to.

On top of that, I find out from a neighbor that the property flooded 3 months prior to closing and it was never disclosed.  I am so angry, anyone hear of anything like this?

There have been a few loans that I have done in Florida that had similar problems and it just takes time and a lot of red-tape to fix. As far as needing the flood insurance vs your property actually flooding 3 months before closing, I'd say that it is worth your while to keep (or get) flood insurance until your proprty can be re-zonded. With all the lava zones and flood areas in Hawaii, your process could be completely different than the processes in Florida - but all you can do from this point is file the right paperwork and wait it out. Good luck!

That was handled wrong by your mortgage company and the lender. Was it in a fema flood zone? If not they are not allowed to close on a loan that is in a flood area and does not  have fema insurance. Sometimes they have to sign up for fema insurance.

I'm trying to figure out how this got through without being identified as a problem.  After this was already a known issue, I received a letter from Well Fargo saying that my flood zone designation has changed based on the FEMA FIRM document revised in 1989.  The house was finished in 2008.  You do the math. 

I've contacted my former broker, appraiser, and one of the flood cert agencies (First American) to see where the misinformation came from.  Still waiting for a reply but based off the documentation, it looks like everyone was working off a map showing the house in a wrong location.  The property is just inside zone A0 so I can see some of the confusion but the developer knew it was in the flood zone and passed it off as being out.  Could they have provided the plot map to the broker and set of this chain of events? 

I plan on keeping the flood insurance but I should have been told by the developer I was in a flood zone, and the property had a history of flooding.  Sound like fraud to me and I'm currently seeking legal council.

Your developer should have known that your area is in a flood zone and should give you documentation to support that. I believe that seeking legal council would be a good idea for this issue - but I question if the end justifies the means.

I am surprised that they even issued a building permit in a flood area. Is this on oahu?

Based on the developers comments, they submitted a CLOMR prior to construction.  They had not submitted a LOMR until I had already signed a purchase contract.  The LOMR is still awaiting approval from FEMA but they said it would be several months before the process would be approved.  So they had the permit to develop the area in Maui County, however, they failed to inform the residents of the status claiming the property was out of the flood zone already

Well the deepest pockets are typically the title company, and if they provided the legal description....that's where I'd start.

So the original mortgage company didn't require flood?  If the dwelling is in the flood zone and your neighbor got flooded recently I'd spring for the flood insurance.

Sounds like it's time to lawyer up and go see the developer that was supplying the incorrect maps.