A major flood is extremely devastating to whole communities and individual property owners. This year nearly every region of the country has experienced a significant flood event yet Congress, for the third time this year, did not re-authorize the National Flood Insurance Program (NFIP). These lapses in the NFIP have added an additional burden to markets struggling to emerge from the economic downturn.
Since June 1, 2010, the NFIP has not had the authority to issue new or renew flood insurance policies. Flood insurance is required for mortgages on properties in the 100-year floodplain. The program lapse has forced many real estate transactions to be put on hold or even cancelled. By failing to extend the NFIP, Congress has left millions of residential and commercial property owners in nearly 20,000 communities across the country uninsured and at risk.
Given the many challenges financial and real estate markets are facing, now is not the time to create another, but avoidable, burden to completing real estate transactions. Since September 2008, Congress has approved seven short-term extensions of the NFIP. These stop-gap measures create market uncertainty for millions of property owners, lenders, and insurers who can’t, or won’t, operate under these conditions.
A temporary fix for the NFIP is being debated as part of a much larger bill that has already cleared the House of Representatives. Despite the hardship caused by the NFIP lapse, the Senate did not act until June 16, 2010. The bills passed by the House and Senate are not identical, that requires a conference to reconcile the differences.
NAR has asked all members to write to their Members of Congress and United States Senators to urge them to reauthorize and extend the NFIP as soon as possible. The longer Congress dithers, the more transactions will be delayed.
To write to your Member of Congress and United States Senator visit the REALTOR® Action Center:
For guidance from lending authorities to lenders about how to keep closings moving forward while the NFIP is expired and more information on the NFIP, please see: http://www.realtor.org/government_affairs/flood_update
Source: NAR’s Eye on Washington