National Flood Insurance Program expired 2/28/2010

To my understanding Congress has failed to reauthorize the National Flood Insurance Program, which expired 2/28/2010.

What does this mean for us?

http://www.nola.com/business/index.ssf/2010/03/national_flood_insurance_progr.html

http://blogs.consumerreports.org/money/2...EXTKEY=AAOLWP05

To answer my own question, here is the email that I sent to staff...

_________

Congress has failed to reauthorize the National Flood Insurance Program (NFIP), which expired 2/28/2010.
Policies that are already in the process of being issued or renewed will be issued when Congress re-authorizes the National Flood Insurance Program. Payments for claims on existing policies will not be impacted; such policies will continue uninterrupted.

In all likelihood, a bill will be passed to extend the coverage and make it retroactive to Feb. 28th, as has happened in the past when the program expired. However, in the intervening days, you won't be able to buy flood insurance, which means if there are any loans in the pipeline needing insurance prior to a sale to Freddie Mac (it is a requirement that the flood insurance be in place before the loan closes and before we sell it) that the closings may have to be delayed.

This may very well be a non-event for us, as typically Congress acts quickly on the matter of NFIP. I’ll let you all know when the NFIP is back in place.

We have a loan waiting to close but the borrower cannot obtain flood insurance - so this means that we must wait to close? This is a portfolio loan, not one to be sold but the effects are the same, correct?

Yes.
See page 5 of the Flood Insurance Blue Book.

QCL - In your first post, you linked to a couple of articles. One of those articles mentions a FEMA bulletin on the 25th of February. Do you (or anyone else) know where I can get that? I've searched FEMA's website, but must not be searching correctly because I can't find it.

Ditto - Can't find anything about this on FEMA.gov or FloodSmart...

Here's a link to a 2/26/10 bulletin that FEMA issued to write your own companies.

http://www.nfipiservice.com/stakeholder/pdf/bulletin/W-10014.pdf

It includes a link to a 10/26/09 bulletin that had more guidance.

HR 4691 was passed by both the house and the senate yesterday:

SEC. 8. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.

Section 129 of the Continuing Appropriations Resolution, 2010 (Public Law 111-68), as amended by section 1005 of Public Law 111-118, is further amended by striking `by substituting' and all that follows through the period at the end, and inserting `by substituting March 28, 2010, for the date specified in each such section.'.

Is it retroactive (i.e. no gap)?

And does this mean it expires again at the end of this month?

yeah..is that a typo, or a short extension?!?

This is part of a really large "extension bill" where they are extending unemployment benefits, the SBA program, and other things. That paragraph I posted is all that is in the bill concerning Flood. It appears to be a short extension.

Here is the email that I sent our staff:

____

UPDATE –

HR 4691 was passed by both the house and the senate yesterday and signed by President Obama last night.

The flood insurance extension was a part of the extensions that you have probably seen in the news, which also included Unemployment and COBRA extensions. The National Flood Insurance Program, as such, is only extended until the end of this month, so this could very well happen again. For now, flood insurance policies can resume being written. Please take note of the March 28th expiration date for any loans in the pipeline needing insurance prior to a sale to Freddie Mac (it is a requirement that the flood insurance be in place before the loan closes and before we sell it).


SEC. 8. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.

Section 129 of the Continuing Appropriations Resolution, 2010 (Public Law 111-68), as amended by section 1005 of Public Law 111-118, is further amended by striking `by substituting' and all that follows through the period at the end, and inserting `by substituting March 28, 2010, for the date specified in each such section.'.

____

This was sent to our Freddie processors, but the same hold true for "In House" loans.

We have a situation where the client's flood insurance needs to be increased, and the insurance agent says they can't increase because the floods are on the way (really?). I think it's more related to the expiration of the NFIP until today. To increase a policy, they can do that now, before the new expiration date on 3/28 - Correct?

Agents often misunderstand the 30 day wait on flood insurance. If I walk into my insurance agent's office and want to buy or increase my coverage, there is a 30 day wait. If the lender requires it in connection with a loan, there is no wait.

Is there any new news on this? Basically - if the property is in a flood zone ready to close we must wait until Congress extends this?

I haven't heard any updates yet. You're right - can't close the loan if you need flood insurance until you're able to get it.

http://www.govtrack.us/congress/bill.xpd?bill=h111-4691

This bill extended the NFIP until 3/28/10.

Thanks Dani.

Thank you too!

Sorry. I guess I wasn't clear. I posted the new letter above to indicate that it was passsed and extended. Thanks for covering me Dani.

Looks like we may be facing the same thing at the end of March. They only extended it until 3/28.

Is there a good chance that Congress will address this and reauthorize for another year before the end of the month? There are lots of homeowners being urged to purchase flood insurance, particularly in ND, and unless they apply and are approved for a loan, requiring the coverage, are subject to the 30-Day Wait.

Who knows. I'm sure Congress will extend the program, but whether they will do it before it expires again, is anyone's guess.

Has anyone heard whether Congress extended the NFIP? The FEMA web site has no new information on this issue.

HR 4851 is pending in Congress. There was some activity on it yesterday. The last status says "Cloture motion on the motion to proceed to the bill presented in Senate." I'm not sure what this means exactly.

Here's the language from the bill. They want to extend the NFIP through 4/30/10.

SEC. 8. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.

(a) Extension- Section 129 of the Continuing Appropriations Resolution, 2010 (Public Law 111-68), as amended by section 8 of Public Law 111-144, is amended by striking `by substituting' and all that follows through the period at the end and inserting `by substituting April 30, 2010, for the date specified in each such section.'.

(b) Effective Date- The amendments made by subsection (a) shall be considered to have taken effect on February 28, 2010.

Cloture motion means basically a motion to end debate and get on with the vote. (former government teacher here.)

Good grief, they're still doing the "let's extend the date only a month" nonsense. I was really hoping they would go out a year at least.

Thanks for the update, RR!

I believe it was tied into the same bill that would extend unemployment benefits which has not passed yet.

FYI...this didn't pass and the Senate has adjourned until April 12th.

Yep - was just going to post this. They couldn't agree on unemployment benefits so off for Spring break and NFIP expires Sunday.

Assuming that they take up the bill the first day they are back, and assuming there are no amendments to the bill, and assuming the bill passes, they would still only be extending the funding for another 18 days!

I'm almost at the point where I want to give a disclosure with any flood searches that come up in a flood hazard area that, depending on Congress, we may or may not be able to close this loan when you want to.

I was told by a vendor that this only applies to non-MPPP policies. Is this correct? Can we still force place flood insurance?

Did the extension made on 3/3 made retroactive to 2/28? Or was it to make policies effective on that day?

Nope--Congress failed to reauthorize it. They don't go back into session to work on this again until after Easter break, April 12th.

WS, I think the one renewed on 3/3 was retroactive. As for the one that expired 3-27, we will have to wait till 4-12 or later to see what they do. Most likely, it will be retroactive to 3-27; but I am not taking any bets.

In reference to Congress:


Woo-hoo!!!

That's a general "woo-hoo" that they're not working - not a specific "woo-hoo" about NFIP.

Although. Come to think of it...

hahaha I'm always glad that someone can see the humor in this.

Yep, "their working" isn't working out too well for us bankers.

I know it is probably to late for this question but y'all have got me all confused. I am not a loan person and am trying to understand this thing...I have the understanding that we can make and close loans during this expiration period just like normal and we still have to make flood determinations, send notices, take premiums, etc. but have to hold off on purchasing the insurance or making ins payments or anything that has to do with NFIP policies. Here is a link to a FRB CA Letter dated 3/29/10 and the attachment has great Q&A's.


http://federalreserve.gov/boarddocs/caletters/2010/1003/caltr1003.htm

Yes, that would be my understanding too. I cannot believe I wasn't aware of this, but that is the recent guidance I was referring to as well.

In a nutsehll, we can fund/close a loan secured by a structure in a flood zone during this lapse period without flood insurance and it won't be considered a violation, but all other provisions of the flood regulation apply regarding notification, determination, etc. Once Congress reauthorizes the NFIP, then flood insurance becomes mandatory if it would have been required during the lapse period.

Hopefully we will find out something good Monday and not have to worry about this nonsense...

Any word on whether this has been extended again?

There is a bill to extend it until May 5th pending and is expected to pass later this week.

You know, as if flood insurance wasn't difficult enough the way it was! We have a loan where the 45 day wait period has just expired. The borrower's insurance co. said not policy available. Per the FEMA and Fed guidance, I see that is true. However, also per the guidance, the customer could complete an application for flood insurance, pay the premium and then wait for the program to be reinstated (or whatever they call it). My understanding is that the other option for the bank would be for the bank, or customer, to purchase private ins policy ($$$!). So, I would opt for the borrower paying through his ins agent.

Where can we find the info about this bill?

This is from today's ABA Daily Newsbytes:

CONGRESS
Senate Moves Forward on Bill Extending Unemployment Benefits, Flood Insurance
The Senate late yesterday voted 60 to 34 to invoke cloture and avoid a filibuster on a bill (H.R. 4851) that would extend unemployment insurance benefits, the National Flood Insurance Program and subsidies for the COBRA health insurance program through May 5. Four Republicans joined Democrats in voting to move the legislation forward, making it likely that the Senate will pass the measure later this week.


This may not be the most recent version:
SEC. 8. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.
(a) EXTENSION.—Section 129 of the Continuing Appropriations Resolution, 2010 (Public Law 111–68), as mended by section 8 of Public Law 111–144, is amended by striking ‘‘by substituting’’ and all that follows through the period at the end and inserting ‘‘by substituting April 14 30, 2010, for the date specified in each such section.’’.
(b) EFFECTIVE DATE.—The amendments made by subsection (a) shall be considered to have taken effect on February 28, 2010.

Great...Thanks!

May 5...meaning in three weeks (if we are lucky) we will be going through this drama again. Good to know our Congressional Representatives are earning their pay (or am I in the wrong forum??? )

I don't understand why it keeps coming up to be approved- how dense is that?

Just to make sure I am reading this right....the bill has not yet passed, correct??

Correct.

The bill that included the NFIP provisions FAILED in congress today!

Now what happens?

It looks like an amendment to the bill was voted down today. I'm guessing they will keep working on the bill until they reach some type of agreement.

They really just should NOT mix different issues together. grrrrr.

Any updates?

The President signed the bill. The extension is until the end of May.

May 31

Thanks!

Where do y'all find this May 31 extention date? I need to see proof!

From ABA daily news bytes- If you are not signed up-you should be-even if its only for the joke at the end of each publication!

President Signs Bill Extending Jobless Benefits, Flood Insurance
The Senate and House last night passed -- and President Obama signed -- a bill (H.R. 4851) that extends unemployment insurance benefits through June 2. The legislation also extends through May 31 the Federal Flood Insurance Program, subsidies for the COBRA health insurance program, and funding to reduce or eliminate fees under the Small Business Administration’s 7(a) and 504 loan programs. The Senate passed the bill by a 59-38 vote, and House approved it two hours later, 289-112, to clear the measure for the president’s signature.

Where can I find the detail? Was it retro ?

I can't find anything from Washington that says May 31st or that the President has signed this yet. Am I missing something??


Here are links to the bill information from the Library of Congress and the Ways and Means Committee in the House.

http://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.4851:

http://waysandmeans.house.gov/press/PRArticle.aspx?NewsID=11064

The ways and means website says it is extended to April 30th. Who is right ABA or the Gov?

http://waysandmeans.house.gov/press/PRArticle.aspx?NewsID=11064

H.R. 4851 Continuing Extension Act of 2010
March 16, 2010

Status: Introduced March 16, 2010, Passed the House March 17, 2010, Amended and Passed in the Senate April 15, 2010. House agreed to the Senate's Amendment, April 15, 2010 by a vote of 289-112.

Click here for the bill text H.R. 4851as introduced in the House.

Click here for updated bill text. (thomas.loc.gov)



Summary of the Continuing Extension Act of 2010

•Extension of Unemployment Insurance Programs - Extends Federal Unemployment Programs, including the Emergency Unemployment Compensation Program, through May 05, 2010.

•Extension of COBRA Assistance - Extends eligibility for 65% subsidy for COBRA premiums through April, 30 2010.

•Extension of Medicare Physician Update - Extends current Medicare payment rates for physicians (preventing a 21% payment reduction) through April 30, 2010.

•Extension of Medicare Therapy Caps Exceptions - Extends exceptions process for beneficiary payment limits on outpatient therapy services through April 30, 2010.

•Clarification of Health Information Technology (IT) Incentives Ensures certain doctors in outpatient facilities are eligible for health IT payments under Medicare and Medicaid.

•Extension of Poverty Guidelines Extends current provision maintaining 2009 poverty guidelines through April, 30 2010 (to prevent a lowering of the poverty line).

•Extension of National Flood Insurance Program - Extends provision through April 30, 2010.

•Satellite Television Extension - Extends the copyright license used by satellite television providers through April 30, 2010.

•Compensation for Furloughed Employees – Provides compensation for federal employees furloughed during March 1st and 2nd as the result of the lapse in expenditure authority from the Highway Trust Fund.

Updated on April 15th to extend coverage to May 31st. http://waysandmeans.house.gov/press/PRArticle.aspx?NewsID=11064

H.R. 4851 Continuing Extension Act of 2010
March 16, 2010

Status: Introduced March 16, 2010, Passed the House March 17, 2010, Amended and Passed in the Senate April 15, 2010. House agreed to the Motion to Concur in the Senate's Amendments, April 15, 2010 by a vote of 289-112.

Click here for the bill text H.R. 4851as introduced in the House.

Click here for updated bill text. (thomas.loc.gov)



Summary of the Continuing Extension Act of 2010 (updated April 15, 2010)

Unemployment Insurance: Extends unemployment benefits retroactively, including the increased payouts and longer duration of benefits from the Recovery Act, through June 2, 2010.

Help with Health Insurance for Unemployed Workers (COBRA): Extends eligibility for the COBRA health insurance 65% subsidy for people who have lost their jobs through May 31, 2010 and provides transition relief for individuals who lost their jobs between March 31, 2010 and the date of enactment.

Medicare Physician Payments: Extends current Medicare payment rates for physicians (preventing a 21% payment reduction) through May 31, 2010.

Poverty Guidelines: Extends current provision maintaining 2009 poverty guidelines through May 31, 2010 (to prevent a lowering of the poverty line due to deflation in 2009).

Flood Insurance: Extends the National Flood Insurance Program authorization through May 31, 2010.

Satellite Television: Extends the compulsory copyright license used by satellite television providers through May 31, 2010.

Small Business Loans: Extends two temporary improvements to the Small Business Administration’s loan guarantee program, raising the percentage of loan amounts that the SBA can guarantee and allowing SBA to waive or reduce loan fees through May 31, 2010.

Compensation for Furloughed Employees: Provides compensation for federal employees furloughed during March 1st and 2nd as the result of the lapse in expenditure authority from the Highway Trust Fund.

Put your faith and trust in God. After that, trust professionals over politicians (if nothing else, the odds are in your favor).

Section 7 of the version of HR 4851 as enrolled and agreed to by the House and Senate that is available on the Library of Congress website states the following:

SEC. 7. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.

(a) Extension- Section 129 of the Continuing Appropriations Resolution, 2010 (Public Law 111-68), as amended by section 8 of Public Law 111-144, is amended by striking `by substituting' and all that follows through the period at the end and inserting `by substituting May 31, 2010, for the date specified in each such section.'.

(b) Effective Date- The amendments made by subsection (a) shall be considered to have taken effect on February 28, 2010.

Am I missing it, where does it state the extention is retroactive?

So, I guess we can count on the agents who are holding the insurance applications on our covered loans closed during the lapse, to send those right out?

Thank you , it has been a long week.

I have an insurance agent saying we can't write flood policies until NFIP reopens on May 31, 2010. Is this correct? From what you all have posted it sounds like we CAN write policies until May 31, 2010? Sorry I'm just confused.

I think your agent is confused. NFIP was approved and retroactive to March 27. The program is effective until 5-31 unless Congress passes something before then.

Retroactive to 3/27 or retroactive to 2/28?

Along these same lines, if our borrower's flood policy expired on 4/1 (period during lapse) and they paid to renew the policy back in January, should the renewal policy be effective 4-1?

Since Congress made it retroactive, it's as if it never expired.

Thanks. But that is only trough the end of May. Then we start with this lapse baby again, right?

Same song; second (third, fourth,...) verse.

Why don't they just extend it and go on??? Don't they have other pressing issues that need their attention?

It's part of a huge omnibus package of programs & legislation & not all directly related.

I'd love to see a requirement that would cause bills to be written in such a way that every clause/admendment would have to be directly related to the subject/topic of the bill.

If Congress had treated health care that way (oops, all of a sudden, I'm pirating the thread)...

has anyone heard anything new on this???? i haven't seen an update since it expired!

see this thread