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Flood Insurance Warning: Avoid Monday Blues

In closing, Distressed Sales, fannie mae, FHA, First-Time Buyer, flood insurance, florida, foreclosure, government, Home Buyer, home sellers, HUD, Industrial Real Estate, insurance, lenders, miami, miami beach, mortgage, new rules, real estate, Sellers, Short Sales on May 27, 2010 at 9:38 am

Warning: Flood insurance expires Monday

WASHINGTON – May 26, 2010 – The National Association of Realtors(NAR) hopes to see a flood insurance extension before the deadline, but a possible hiatus could threaten some scheduled closings.

The National Flood Insurance Program (NFIP) lapsed briefly earlier this year and it’s set to expire again on Monday, May 31, 2010. In a letter sent out to Realtors today, NAR said it’s working with Congressional allies to avoid another potential lapse in the program.

NAR is actively lobbying for passage of several pieces of legislation that are moving through Congress and contain NFIP extensions of varying length.

It is unclear, however, which extension is likely to pass before the deadline. Each extension bill has different provisions, and the number of them could make passage more difficult as lawmakers get behind different bills, leaving no single bill with the necessary number of votes for passage.

NAR says it’s also working with FEMA, FHA, Fannie, Freddie and the VA on contingency planning should another lapse occur.

“We are requesting the agencies to provide guidance for lenders as to what steps they may take to meet any flood insurance requirements should the NFIP lapse again,” NAR said it its update today. “With guidance in hand, lenders should have the assurances that they need to continue to close loans. If the program were to lapse, the NFIP would not be able to issue new or renewal flood policies.”

NAR’s suggestion: Buyers should try to obtain a flood insurance policy before Monday if they are under contract and hope to close soon.

NAR is tracking the latest developments. For an updated overview of the bills and NAR articles as soon as they’re posted, go to: http://www.realtor.org/government_affairs/natural_disaster.

Reprinted by permission: © 2010 Florida Realtors®

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