Tuesday, June 22, 2010

Senate fails to reauthorize NFIP Flood Program, Again!

Earlier this year the Senate took Spring Break without reauthorizing the funding for the National Flood Insurance Program. Now, at the start of hurricane season, they failed to act again. This time is was the Memorial Day break.

The big problem is that so many other things that have nothing to do with flood insurance are getting tacked on to the bill. Extensions for unemployment benefits, tax breaks for businesses and Medicare payments to doctors are all added on to the bill to extended the funding for flood insurance. All of these things are important, but if you live in an area prone to flooding, you really need coverage.

Also, lets not forget the folks trying to buy a home out there that is in a FEMA designated flood zone. Making coverage impossible to get means that some lenders will not fund the loan without a flood policy, your loan docs could expire and your escrow may get extended or worse, canceled.

The House already passed it. The Senate, once again has held up this very important program.

To contact your Senator Click Here for their e-mail address.

I say we pass a new rule for Congress. If it has nothing to do with the bill, you can't add it on. Deal with it as a separate bill. Then maybe we would not have this very important program could be renewed for 5 years or more instead of being held up every other month by partisan bickering.

If you are one of the folks that is having a problem getting a loan due to flood, it may be possible for you to assume the sellers current policy. Check with the seller to see how long they have left on the policy and if their carrier will allow you to assume it. BEFORE YOU SIGN ANYTHING, check with your lender and see if this is acceptable. If the sellers flood policy is close to expiration, the lender may not accept it because policies are not being renewed at this time. Also, some lenders may require a certain number of months prior to expiration of the policy in order for them to accept it.

Another way you can go is to get a flood insurance quote, fill out the app, pay the premium and have your agent submit the policy to the carrier. If your lender will accept the paid application and the NFIP Hiatus Letter you can close escrow. As soon the NFIP is reauthorized and the flood program is put back in place the carrier will send the application and payment to the flood program and put coverage in force.