new mortgage company forcing FEMA re-evaluation

[bmorgan]

What is the name of your state? Alabama

I bought a new home in May of 2004 and in that same month, a survey was done to determine it's flood zone. The survey (no elev cert) concluded it was in a zone "A" and didn't require special insurance. The closing with mortgage company #1 went without a hitch.

A few months later mortgage company #2 takes over and says they believe it is in a flood zone and that is up to me to prove otherwise, at my expense. I sent them back the same FEMA doc they sent me as their proof (except mine was dated 2004 and showed no flood zone, and theirs was dated 1982) and they wouldn't accept this as proof. They then proceeded to take out a $2000 flood insurance policy for me, kindly adding it to my escrow.

As they agreed to buy the mortgage from company #1, don't they have to accept its determination on flood zone compliance as it was done only a few months prior. I can understand them wanting to cover their ass, but not forcing me to pay for it.

 

[BradleyS]

Do you have the flood certification paperwork from your 1st mortgage co?

If you are in a floodzone, but do not require insurance, do you have a LOMA (Letter of Map Amendment) from FEMA on file or recorded at the courthouse?

Where is your elevation cert.?

 

[bmorgan]

I called the surveying company and was told an elevation certificate was not requested by the (first) lender. I still think it stinks that the second mortgage company can force me to do this. If the second holder thinks they need extra security, it should be on their dime. I never asked them to buy my mortgage.

 

[BradleyS]

The tax assessor/courthouse propably has a copy/original elevation certificate on record.

If your property does not meet elevation requirements you might be better off having flood insurance. Just because the first lendor may have overlooked the requirement, I would bet there is a clause on your original mortgage(that they purchased) that requires you to maintain flood insurance.

They(new mortgage company) cannot change your mortgage once recorded without your permission.

Best thing to do, shop around for insurance, see what the binder covers, and excludes. READ, don't listen to the agent, READ THE BINDER.

 

[seniorjudge]

The tax assessor/courthouse propably has a copy/original elevation certificate on record.

If your property does not meet elevation requirements you might be better off having flood insurance. Just because the first lendor may have overlooked the requirement, I would bet there is a clause on your original mortgage(that they purchased) that requires you to maintain flood insurance.

They(new mortgage company) cannot change your mortgage once recorded without your permission.

Best thing to do, shop around for insurance, see what the binder covers, and excludes. READ, don't listen to the agent, READ THE BINDER.

Yep...the requirement for flood insurance was in the old mortgage, I'll bet. You were lucky you didn't have to buy it under lender #1.

I've got the same situation so I feel for you...but there's nothing either of us can do. (If my building floods, the entire world will have come to an end since it is WAY above any possible flood, thanks to lots of fill dirt...but it is in a flood plain, so guess what....I get to buy flood insurance.)

 

[bmorgan]

The house is brand new (June 2004) and sits on the side of a hill. The lot is 1000 feet deep and there is a tiny stream along the back line. The last 100 feet is shown as "zone C" on my map, but that is about 700 feet from the house. If my house floods we'll all need an ark.

 

[PghREA]

Last summer I listed and sold a home in a community that once was totally in a flood zone. Because the Army Core of Engineers worked on the problem creek 10 years ago, flood insurance was optional for some of the homes in this community. This area had not flooded since 1987. Although, all of the new buyer's neighbors had flood insurance on their homes, the new buyer decided this was an unnessasary expense so he opted not to get it. He moved in the new home in July and the rains of hurricane Ivan hit the northeast in September. Yep, his home was flooded in the basement and 6 feet of the first floor. He didn't have insurance - so he now is "up a creek without a paddle."

My advice, if someone says you need it, then you should get it. Better safe than sorry.

 

[bmorgan]

I would tend to agree except:

It's $1900 per year, according to Chase. I doubt they shopped very hard but it will still be a pretty penny.

I went through the rainiest month in recorded history last summer and the stream 700 feet away (downhill all the way) didn't overflow.

The mortgage company is not recommending this for my benefit, but forcing it on me for theirs.

 

[BradleyS]

I would "shop around" for $1900 a year.

 

[HomeGuru]

Yes, forced placed insurance coverage is rarely shopped.

 

[bmorgan]

It seems that everyone prefers to ignore the fact that I don't need the insurance. Maybe this thread should be renamed to "Misery loves company".

 

[seniorjudge]

It seems that everyone prefers to ignore the fact that I don't need the insurance. Maybe this thread should be renamed to "Misery loves company".

No, you are ignoring what we are telling you in the responses. Read them again.

 

[bmorgan]

bmorgan
"I bought a new home in May of 2004 and in that same month, a survey was done to determine it's flood zone. The survey (no elev cert) concluded it was in a zone "A" and didn't require special insurance."

This was requested by and satisfied the first mortgage holder.

seniorjudge
"Yep...the requirement for flood insurance was in the old mortgage, I'll bet. You were lucky you didn't have to buy it under lender #1."

 

[seniorjudge]

bmorgan
"I bought a new home in May of 2004 and in that same month, a survey was done to determine it's flood zone. The survey (no elev cert) concluded it was in a zone "A" and didn't require special insurance."

This was requested by and satisfied the first mortgage holder.

seniorjudge
"Yep...the requirement for flood insurance was in the old mortgage, I'll bet. You were lucky you didn't have to buy it under lender #1."

Okay, one more time: You have flood insurance whether you want it or not. Even if.

 

[bmorgan]

Okay. No I don't. I'm still talking with Chase about it.

I thought I might get some good advice here.

I do appreciate the empathy.