Will Door Open to Private Flood Insurance?

May 6, 2016

Thousands of communities nationwide are located within flood zones, which means flood insurance is essential for buyers before they can obtain mortgage financing. Despite this, private flood insurance in many of these areas is nonexistent because it can be expensive for insurance companies to offer. As a result, the National Flood Insurance Program is often the only option for buyers.

House lawmakers recently passed legislation to try to open the private market by letting home owners choose a private program if one is available without taking a hit on their federal rate if they end up returning to the federal program. Right now, if they leave and come back, they lose their grandfathered status and face a big rate hike. That rate increase goes away under the legislation. The National Association of REALTORS® is asking the Senate to pass the bill.

The issue is a top story in NAR's news video, The Voice for Real Estate. The video also looks at the agenda REALTORS® will be taking to their members of Congress next week when they're in Washington for the REALTORS® Legislative Meetings & Trade Expo. Some 8,000 REALTORS® and guests are expected to be in town, and they'll be participating in hundreds of meetings on Capitol Hill to help ensure property markets and mortgage financing options remain strong. The flood insurance bill will be on the agenda, too.

The video also gives a recap of a scam alert released two weeks ago by NAR's top lawyer, Katie Johnson. She cautions real estate professionals about using e-mail to send sensitive client information because scammers have been exploiting e-mail to get transaction information and then direct unsuspecting consumers to wire closing funds to them.

And NAR Chief Economist Lawrence Yun released the association's March home sales numbers, which are up more than 5 percent for the month. The association's forward-looking pending sales numbers are up, too, suggesting solid sales will hold up as the spring selling season gets underway.

—REALTOR® Magazine