FEMA Flood Insurance

[NorCalRacer]

Well, recently I had finally found a house to buy. At $300,000, a two bed one bath in CA is a great deal. I have worked on this house before and know that in the winter it can get about a half inch to an inch of standing water in the street before the gutter, no big deal. So, seven days into escrow, I get a letter from a title company telling me that FEMA has created new flood maps, and my house was in one. To carry a loan, I would have to carry FEMA insurance for the life of the loan. FEMA sets the rates at whatever they want. Last few years, everyone with FEMA flood insurance has been paying to rebuild New Orleans. I decided that a payment with no price cap, required to be payed for thirty years, was complete lunacy and turned down the home. Now I have to find another house in my price range without FEMA or anyone else involved.
Anyone else have to deal with this garbage? How is it even legal?
And why the hell are they rebuilding New Orleans?:confused:

[One_Bad_400]

wow! 2 bedroom and i bathroom house for $300,000!!!! i'm glad i live in Mississippi... our 6 1/2 bed room 4 bathroom with pool and 3 acres was $250,000... if i was you... i wouldnt look for a new house! i'd also look for a new place of the US to live! hahaha

[NorCalRacer]

I like it here. I have lived in the same town almost my whole life, over 25 years. Also, money here is very easy to earn if you are willing to work for it.

[Mc. Muffin]

Originally posted by NorCalRacer

And why the hell are they rebuilding New Orleans?:confused:

Because in 2005 the whole city was flooded when Hurricane Katrina hit, its now 2007 and their is still damage throughout the city.

[Ralph]

My familys 2 bedroom 2 bath in NJ is about 500,000

Real Estate is insane.

[derekhonda]

Originally posted by Mc. Muffin
Because in 2005 the whole city was flooded when Hurricane Katrina hit, its now 2007 and their is still damage throughout the city.

I don't think he is asking that, he is asking why would the rebuild new orleans when some of it is below the flood level etc etc and its likely it will get destroyed again with these weird bouts of weather we have been having.

To be honest, why do you HAVE to go with one insurance company? Why couldn't you get another company who will quote you a flat rate? When you buy a car on loan, and have to get full coverage, they don't pick your insurance company for you do they?

[ATV Chic]

My bro lives in new orleans and i can on and on about stupid FEMA; who never zoned the 9th ward as a flood area and all these people are now getting screwed because of it. Which is why they are re-zoning areas everywhere that have "flood potential" and making them flood zones to cover their *****e$ and to make themselves and insurance companies money. It's ridiculous. I hope you find a better area and house.

[NorCalRacer]

Originally posted by derekhonda
I don't think he is asking that, he is asking why would the rebuild new orleans when some of it is below the flood level etc etc and its likely it will get destroyed again with these weird bouts of weather we have been having.

To be honest, why do you HAVE to go with one insurance company? Why couldn't you get another company who will quote you a flat rate? When you buy a car on loan, and have to get full coverage, they don't pick your insurance company for you do they?

All the flood insurance rates in the USA are fixed by FEMA. You can only get a fixed rate for a year at a time and at the end of the year the rates are recalculated, by FEMA. The insurance companies only differ in what they charge to broker the insurance, but the minimum flat rate will always be the same for every company. What bothers me is FEMA also regulates which zones are high risk. The house I was looking at has been there since 1945 and has not had flood damage yet, but now FEMA changed it's maps to include it in the "high risk" category, meaning anyone borrowing against the property will be sending alot of money FEMA's way. I think they're just trying to recoup from Katrina, but I won't pay for it,or the next Katrina. I guess I learned a lesson:cool: The map change was so recent the realtor didn't even know about the flood plain to include it in the disclosure. Next house I'm looking at is 5 miles up a mountain. Nothing but fire insurance to worry about then, and those rates can only go up a fixed percentage per year:D

[crazedape]

I am a real estate consultant and I have been running into this flood plain stuff here and there. There really isn't a rhyme or reason which houses they pick to be in the flood plain map. For instance, I had a client looking at a house and I explained to him about the flood plain maps changing and he said he wouldn't pay that rediculous amount. I further researched for the client elevation levels and things of that nature. Turns out that the property was on the second highest point in the county and even the airport was about 500 feet below this property and it wasn't located in a flood plain zone. I talked to the title insurance company and asked if there was a way to get the property off the high risk zone and he said that there is a way but to start it off I have to buy the insurance for it first. Also this same piece of property the insurance for it ranged from $6200 a year to $1300 a year with different companies. So basically FEMA has messed up another sale for me. Do your research for yourself and call and ask around. There are ways around this but I didn't go any further with this because the client wasn't going to pay any money to them just to get the ball rolling on getting out of the flood plain.

[NorCalRacer]

Yeah, I passed my real estate exam recently and FEMA just rang alarm bells. Also, I imagine they are trying to pressure lenders after the fact, people who have carried loans for years without trouble will now have to pay a ridiculous insurance fee or be forclosed upon:rolleyes: I wonder how many struggling people FEMA will make homeless with this blatant money grab? I probably couldn't budget another $100-$300 extra per month, with no cap on what it could go up to, required to be payed for thirty years. I feel sorry for anyone who thought they were building equity in their home and then were placed in a FEMA flood map, I personally, after learning more, will vote agains anything and anyone who supports FEMA's money recovery methods in any way:macho

On a happy note, I turned down a 900 sq foot house and am now looking at a 1700 sq foot one, I will probably put an offer in tomorrow. And it is at least 1000 ft elevation over ANY flood plains:D Worth an extra ten minute drive.