Home > Uncategorized > 2 Steps Forward, 1 Step Back — BIGTIME!

2 Steps Forward, 1 Step Back — BIGTIME!

I’m mad.  No, I’m REALLY MAD!!

Here’s the deal.  Over the past 2-3 years the Federal government has meddled in just about every aspect of Real Estate and has spent Billions of dollars bailing out big banks and consumers for the financial meltdown.  While I’m all for creating a stronger economy, if they’re going to meddle, the “simple stuff” should be easy.

What I’m referring to is the National Flood Insurance Program (NFIP) which expired on March 28, 2010.

Here’s an excerpt from the FEMA website (verbatim) explaining the program:

Nearly 20,000 communities across the United States and its territories participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage. In exchange, the NFIP makes Federally backed flood insurance available to homeowners, renters, and business owners in these communities. Community participation in the NFIP is voluntary.

Flood insurance is designed to provide an alternative to disaster assistance to reduce the escalating costs of repairing damage to buildings and their contents caused by floods. Flood damage is reduced by nearly $1 billion a year through communities implementing sound floodplain management requirements and property owners purchasing of flood insurance. Additionally, buildings constructed in compliance with NFIP building standards suffer approximately 80 percent less damage annually than those not built in compliance.

In addition to providing flood insurance and reducing flood damages through floodplain management regulations, the NFIP identifies and maps the Nation’s floodplains. Mapping flood hazards creates broad-based awareness of the flood hazards and provides the data needed for floodplain management programs and to actuarially rate new construction for flood insurance.”

So, let me get this straight — the government (your elected officials) allowed this program to expire.  As a result there is a loss of 46.5 MILLION dollars from this temporary/unnecessary shutdown ($2.7MM/day).  How can our elected officials be so negligent to allow this to happen?

Believe it or not however, this is not why I’m mad — I am angry because without the extension of the program, properties located in Flood Zones requiring flood insurance can not close.  How many properties are located in these “zones”.   Here’s the answer — LOTS!

Notwithstanding the foregoing, how about the title and homeowner insurance companies losing crucial revenues while our leaders debate about unrelated issues?

What seems like a simple solution to a plan which has been in place for a number of years is being delayed by the typical bureaucratic “stuff” that always gets in the way.  Here’s an excerpt from the Florida Association of Realtor website expounding upon this concept:

“… However, some lawmakers, like U.S. Sen. Tom Coburn, (R-Okla.), oppose the extension bill, which covers other topics, because it does not include offsets for new spending. Other provisions of the Continuing Extension Act of 2010 (H.R. 4851) include an expansion of unemployment benefits.”

WHAT?  The continuation of unemployment benefits?  While this may be an appropriate solution for another bill, why is it interfering with the growth of our housing market?  I just don’t understand —- there’s got to be another way!

The only part of the unemployment verbiage in this bill that I can agree with is the fact that insurance companies may incur a loss because the NFIP is not renewed and they need to layoff workers who will later file for unemployment (obviously sarcastic).  HOW DUMB IS THAT?

Oh yea, did I mention that there are a few extensions of NFIP which would only put a band-aid on the issue and would provide for just a few additional months of coverage?  Come on legislature — get your act together and make this a priority as the growth of our economy is relying on you!

One last thing, how about all the Flood Policies which expired on March 28th?  How are those expired policies going to be covered?  Are existing homeowner’s now in default of their mortgage provisions?  Guess who’s going to have to pay in the event of a natural flood related disaster?  I guess the residents of Alaska who don’t have a flooding problem (as far as I’m aware) won’t mind “flipping the bill” for a flood in Missouri.

I wish that I didn’t vote for these “leaders” so I could end the blog by saying — “you voted for them — not me!”  Unfortunately I voted for them too!

Did I happen to mention that I am really MAD?

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