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Flood insurance hiatus not likely to delay home closings

The National Flood Insurance Program is in suspended animation, starting March 1, thanks to congressional wrangling over legislation that would reauthorize it. The Post's Federal Eye blogger, Ed O'Keefe, explains the legislative drama, which is expected to be resolved within a few days. For home buyers and owners, it means the only source of flood insurance is temporarily unavailable.

I asked Tim Wilson, president of affiliated businesses for Long & Foster, which includes a title company and two mortgage companies, whether the holdup would delay real estate closings. "If FEMA shuts down for a few days, I think it would have very little impact," he said. (FEMA runs the National Flood Insurance Program, though policies are sold by individual insurance agents.)

All mortgage applications are run through an automated system to determine whether the home they're financing is in a designated flood area. Wilson said if they don't get an automated answer within 48 hours, they follow up on that application. Considering that it usually takes 30-60 days to go from contract to closing on a home loan, a few days' delay getting the flood insurance approval is not likely to delay closings, he said.

By Elizabeth Razzi  |  March 1, 2010; 1:32 PM ET
Categories:  Buying , Insurance  
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Comments

Are you saying that homes are being bought and sold without flood coverage? Does that mean that homes could also foreclose before people can get the money they are owed from FEMA?

Mike-http://elmike.wordpress.com

Posted by: ElMikeO | March 1, 2010 7:17 PM | Report abuse

With more snow cover than we've seen in years, warmer temperatures are creating flood issues and nobody can purchase flood insurance thanks to the Senate's inability to protect its constituents. As a flood insurance professional, we have dozens of clients who are scared of flood conditions, purchasing flood policies through the National Flood Insurance Program (NFIP) administered by FEMA. With no program, no premiums can be accepted, no claims will be paid and your 30 day waiting period will take longer, causing more risk to families. This year's elections are a wake-up call to send every incumbent home, permanently, regardless of party. Leaving American families and homeowners at risk during the worst flooding weeks is unforgivable.

Posted by: RodGoeman | March 1, 2010 10:17 PM | Report abuse

there are a handful of private companies that offer flood insurance, they don't have much of the market because they fully charge for risk, unlike like FEMA, which under-charges (which explains why the program has stuck the taxpayer with a $17+ billion bill). There's no reason taxpayers should have to support this continued giveaway to beach-front vacation homes.

Posted by: iculus | March 2, 2010 12:01 PM | Report abuse

National Flood Insurance was sound until it was placed under FEMA/Home Land Security. Now the funds have been siphoned off to pay for pie in the sky security measures.

Posted by: rcvinson64 | March 2, 2010 6:05 PM | Report abuse

The comments to this entry are closed.

 
 
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