This helps the lender avoid costs for flood insurance but what good does that do since once the borrowers mortgage triples they will get foreclosed on and the bank will eat the majority of the loss for all improvements on the land. No one will buy that property from the bank if it means paying 3 times what its worth on a mortgage. Furthermore, I appreciate the spirit of the law but “real risk” has been grossly calculated in the insurers favor. My neighborhood hasnt flooded in 30 years, my house is worth ~$80k-$90k and they say the real risk is $12k per year, that would mean that on average I would have to pay in over $300k to get coverage for the $20k-$40k of flood damage this house might receive. This act single handedly turned 2/3’s of my small business assets into toxic assets, this just crushed my little struggling small business and there is nothing I can do to get out from these assets now.
The entire eastern seaboard will have masses of vacant and crime filled neighborhoods and banks will be taking on trillions of extremely toxic assets via foreclosure over the next hand full of years. Also counties just emerging from fragile financial strife will now lose multi-millions in property taxes as well which will result in every ones property taxes going up in coastal towns. We spend 85billion a month in QE yet we cant spend $24b over 30 years to prevent displacement of 100’s of thousands of families and substantially more loss to mortgage holders than we save in these trying economical times?
At least allow me an out from these assets at a fair market price. I get the picture, dont build or occupy high risk areas. Since this is 5 miles inland, hasnt flooded and I didnt realize I was being subsidized before, I had no idea I was buying into a risky area, same as many Floridians near the coast.
As I stated before, the Federal Government just needs to make Insurance companies include flood coverage in their policies. That will allow carriers to spread the Risk. Yes, coastal properties will still pay more, but maybe only $5,000 a year vs $12,000 for the flood portion. Then people more inland will pay maybe $50 more a year on their homeowners insurance. This way the Risk is spread and now everyone has flood coverage. So when the freak flood happens, where it usually does not, the Fed doesn’t have to declare it a Federal Disaster and provide funding. It’s a win win for everyone. Everyone has coverage and the coastal properties get a little repreave.
Why is that people advocate Gov’t mandates for anything? They cause more problems than they solve.
I certainly don’t want to pay $50 for a coverage I don’t want, need or am currently required to purchase to fund so many 2nd home investment properties on the beach somewhere, or 100’s of condo properties on the coast who’ve obtained exceptions to the rate increases in B/W bill, even after having been flooded multiple times over the last several years.
I don’t know which situation fits you, middle-class/primary residence or upper class/2nd-Summer home, but there is no solution while the big fish are exempted and normal folks get left holding the bag.
I’d be interested in seeing a tally or premium impact prior to any exceptions being applied, and some data on what the exceptions cost the program.
on another thread in the IJ a few weeks ago, there was an article that essentially advocated a true all perils H.O. policy including all the taboo coverages-EQ, Flood,Wind/Hail and the like. All with some fairly stout deductibles, but the guy with a policy in Cali would sleep better at night knowing that he has some EQ, and the person along the Florida or Jersey shore would have flood and the midwest H.O. owners would hav e coverage for hail.
Its either that or the Fed’l Gov’t gets involved in some schem or FEMA is paying for the losses and we as tax payers pay for it anyway.
My vote is make all insurers include for it as for all of the fumbling around we do as a business, its better than how the go’vt does it.
So, in other words mandated coverage? That’s the only way you’ll get an all perils HO policy. When a homeowner shops for a policy and gets a quote for $8,000/yr, their immediate response is how do I get that down? Answer – pick and choose the perils you want. So if the guy can get the HO policy for $5000 w/o EQ isn’t he going to do that?
There’s a reason why only 20-25 percent of the people in CA purchase EQ coverage. It’s expensive there because it’s a risk-based rate. One that wouldn’t be charged in almost any other state.
So InsGuy, what I hear you saying is you don’t want to pay the $50 up front because you are happy to have your tax dollars go to bail all these people out when they get a flood or earthquake. I’d prefer to have it in my policy for $50 vs the freak flood that may come my way and possibly not get a Federal disaster relief. I’m not for the government taking it over like they have the current flood program that is bankrupt. I’d rather an industry that knows what they’re doing take it over. Plus you could put a separate deductible for flood on the policy, but no more than five times their current property deductible. So if they have a $1,000 property deductible and they can chose up to $5,000 flood deductible. This way the Federal government doesn’t use my tax dollars to bail these people out.
Funny how they’re not mentioning requiring loan servicers to keep flood zone mapping updated or to not place flood insurance (which covers ground water) on condos too far above the ground to ever get hit by ground water…
Remember the term Force-Placed Insurance, as it is the leading cause of foreclosures since 1994. False placement of illegally and artificially inflated premiums have been proven to create a negative escrow account, which leads to increased mortgage payments, blocked tax payments, and denial of a loan modification.
Find out more about this fraudulent product here: http://www.mainstreet.com/article/real-estate/how-force-placed-insurance-leads-foreclosure
Explain to me why banks use high priced non-admitted paper to force place coverage when they have retail insurance agencies as a part of their corporate structure. Are they too inept at insurance to create a blanket or master policy to assign their uninsured property to? Or they have so much the controlled business statutes would cost them too much in taxes or cause them to lose their insurance licenses due to the % of controlled business?
I just got told today that instead of paying $901 towards my flood insurance a year, I am now forced to pay $4279.oo a year in flood insurance alone. So since my escrow orginally covered 901, I now have to come up with $3378 cash to pay my flood insurance by the end of THIS month. No warning or anything! Not only this, but now my morgtage is going up by $300 a month. So instead of paying $775, I’m going to be paying almost $1100, with only $225 going towards the principal of my house. My loan on my house is only $78,000. I’ve got student loans to pay on top of having two kids! BTW I’m a social worker so I dont make much to begin with. No one warned me of this before I bought this house, no one mentioned this new federal flood ACT, but I suppose its my own damn fault! My husband is in the process of looking for a different job, as his radio broadcasting job will not help cover the difference in our new expenses. I’ve had this house for 1 year! I’ve never felt more screwed by our government then this very day. The reason I’m finding out today that I will owe $4279 for flood insurance (which my house has NEVER flooded!!!!) is because of the SHUTDOWN. regardless of a shutdown or not, it still would have went up because Congress passed the Biggert-Waters Act.
Allison, you realize the catch 22 is that you will have to walk away from that house as a foreclosure right? Who in the world would want to pay $75k-$150k in flood insurance during the life of the loan for a $78k house, that answer is pretty much, no one. Sorry to shed that little bit of reality to you. Its the problem I face now too.
Baxtor the global hazard insurance sounds okay to me but not to the millions of other people who dont want their premium to go up to pay for a risk they dont own as you promptly saw in response. As for being cheaper than bailing out flood disasters, I think its FEMA mismanagement more than it is not enough money, see below.
“Biggert-Waters was sold on the premise that the federal flood insurance program is $18 billion in the red. But Garret Graves, chairman of the Louisiana Coastal Protection and Restoration Authority, noted that the program has taken in $65.3 billion in premiums since 1978 and paid out $56.4 billion in claims.”
So FEMA was supposed to run on $8.9B for 35 years? That’s $254,285 per year or $21,190 per month. That’s impossible. Premiums need to go up, but not by the amounts they are. It’s just another excuse for insurance companies to screw the American people like they’re doing with Obamacare.
This helps the lender avoid costs for flood insurance but what good does that do since once the borrowers mortgage triples they will get foreclosed on and the bank will eat the majority of the loss for all improvements on the land. No one will buy that property from the bank if it means paying 3 times what its worth on a mortgage. Furthermore, I appreciate the spirit of the law but “real risk” has been grossly calculated in the insurers favor. My neighborhood hasnt flooded in 30 years, my house is worth ~$80k-$90k and they say the real risk is $12k per year, that would mean that on average I would have to pay in over $300k to get coverage for the $20k-$40k of flood damage this house might receive. This act single handedly turned 2/3’s of my small business assets into toxic assets, this just crushed my little struggling small business and there is nothing I can do to get out from these assets now.
The entire eastern seaboard will have masses of vacant and crime filled neighborhoods and banks will be taking on trillions of extremely toxic assets via foreclosure over the next hand full of years. Also counties just emerging from fragile financial strife will now lose multi-millions in property taxes as well which will result in every ones property taxes going up in coastal towns. We spend 85billion a month in QE yet we cant spend $24b over 30 years to prevent displacement of 100’s of thousands of families and substantially more loss to mortgage holders than we save in these trying economical times?
At least allow me an out from these assets at a fair market price. I get the picture, dont build or occupy high risk areas. Since this is 5 miles inland, hasnt flooded and I didnt realize I was being subsidized before, I had no idea I was buying into a risky area, same as many Floridians near the coast.
s
As I stated before, the Federal Government just needs to make Insurance companies include flood coverage in their policies. That will allow carriers to spread the Risk. Yes, coastal properties will still pay more, but maybe only $5,000 a year vs $12,000 for the flood portion. Then people more inland will pay maybe $50 more a year on their homeowners insurance. This way the Risk is spread and now everyone has flood coverage. So when the freak flood happens, where it usually does not, the Fed doesn’t have to declare it a Federal Disaster and provide funding. It’s a win win for everyone. Everyone has coverage and the coastal properties get a little repreave.
Why is that people advocate Gov’t mandates for anything? They cause more problems than they solve.
I certainly don’t want to pay $50 for a coverage I don’t want, need or am currently required to purchase to fund so many 2nd home investment properties on the beach somewhere, or 100’s of condo properties on the coast who’ve obtained exceptions to the rate increases in B/W bill, even after having been flooded multiple times over the last several years.
I don’t know which situation fits you, middle-class/primary residence or upper class/2nd-Summer home, but there is no solution while the big fish are exempted and normal folks get left holding the bag.
I’d be interested in seeing a tally or premium impact prior to any exceptions being applied, and some data on what the exceptions cost the program.
on another thread in the IJ a few weeks ago, there was an article that essentially advocated a true all perils H.O. policy including all the taboo coverages-EQ, Flood,Wind/Hail and the like. All with some fairly stout deductibles, but the guy with a policy in Cali would sleep better at night knowing that he has some EQ, and the person along the Florida or Jersey shore would have flood and the midwest H.O. owners would hav e coverage for hail.
Its either that or the Fed’l Gov’t gets involved in some schem or FEMA is paying for the losses and we as tax payers pay for it anyway.
My vote is make all insurers include for it as for all of the fumbling around we do as a business, its better than how the go’vt does it.
So, in other words mandated coverage? That’s the only way you’ll get an all perils HO policy. When a homeowner shops for a policy and gets a quote for $8,000/yr, their immediate response is how do I get that down? Answer – pick and choose the perils you want. So if the guy can get the HO policy for $5000 w/o EQ isn’t he going to do that?
There’s a reason why only 20-25 percent of the people in CA purchase EQ coverage. It’s expensive there because it’s a risk-based rate. One that wouldn’t be charged in almost any other state.
So InsGuy, what I hear you saying is you don’t want to pay the $50 up front because you are happy to have your tax dollars go to bail all these people out when they get a flood or earthquake. I’d prefer to have it in my policy for $50 vs the freak flood that may come my way and possibly not get a Federal disaster relief. I’m not for the government taking it over like they have the current flood program that is bankrupt. I’d rather an industry that knows what they’re doing take it over. Plus you could put a separate deductible for flood on the policy, but no more than five times their current property deductible. So if they have a $1,000 property deductible and they can chose up to $5,000 flood deductible. This way the Federal government doesn’t use my tax dollars to bail these people out.
Funny how they’re not mentioning requiring loan servicers to keep flood zone mapping updated or to not place flood insurance (which covers ground water) on condos too far above the ground to ever get hit by ground water…
Remember the term Force-Placed Insurance, as it is the leading cause of foreclosures since 1994. False placement of illegally and artificially inflated premiums have been proven to create a negative escrow account, which leads to increased mortgage payments, blocked tax payments, and denial of a loan modification.
Find out more about this fraudulent product here: http://www.mainstreet.com/article/real-estate/how-force-placed-insurance-leads-foreclosure
Explain to me why banks use high priced non-admitted paper to force place coverage when they have retail insurance agencies as a part of their corporate structure. Are they too inept at insurance to create a blanket or master policy to assign their uninsured property to? Or they have so much the controlled business statutes would cost them too much in taxes or cause them to lose their insurance licenses due to the % of controlled business?
I just got told today that instead of paying $901 towards my flood insurance a year, I am now forced to pay $4279.oo a year in flood insurance alone. So since my escrow orginally covered 901, I now have to come up with $3378 cash to pay my flood insurance by the end of THIS month. No warning or anything! Not only this, but now my morgtage is going up by $300 a month. So instead of paying $775, I’m going to be paying almost $1100, with only $225 going towards the principal of my house. My loan on my house is only $78,000. I’ve got student loans to pay on top of having two kids! BTW I’m a social worker so I dont make much to begin with. No one warned me of this before I bought this house, no one mentioned this new federal flood ACT, but I suppose its my own damn fault! My husband is in the process of looking for a different job, as his radio broadcasting job will not help cover the difference in our new expenses. I’ve had this house for 1 year! I’ve never felt more screwed by our government then this very day. The reason I’m finding out today that I will owe $4279 for flood insurance (which my house has NEVER flooded!!!!) is because of the SHUTDOWN. regardless of a shutdown or not, it still would have went up because Congress passed the Biggert-Waters Act.
Allison, you realize the catch 22 is that you will have to walk away from that house as a foreclosure right? Who in the world would want to pay $75k-$150k in flood insurance during the life of the loan for a $78k house, that answer is pretty much, no one. Sorry to shed that little bit of reality to you. Its the problem I face now too.
Baxtor the global hazard insurance sounds okay to me but not to the millions of other people who dont want their premium to go up to pay for a risk they dont own as you promptly saw in response. As for being cheaper than bailing out flood disasters, I think its FEMA mismanagement more than it is not enough money, see below.
“Biggert-Waters was sold on the premise that the federal flood insurance program is $18 billion in the red. But Garret Graves, chairman of the Louisiana Coastal Protection and Restoration Authority, noted that the program has taken in $65.3 billion in premiums since 1978 and paid out $56.4 billion in claims.”
So FEMA was supposed to run on $8.9B for 35 years? That’s $254,285 per year or $21,190 per month. That’s impossible. Premiums need to go up, but not by the amounts they are. It’s just another excuse for insurance companies to screw the American people like they’re doing with Obamacare.
You missed Three zeros in you calculation
So, you believe that the insurance companies dreamed up Obamacare?
Well that’s a good one.