Home buying thread
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Arative
Ahn'Qiraj Raider
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So I started a refi with one of these zero costs lenders and they are claiming I need flood insurance because a FEMA map from 1996 says I'm in a flood plain. I built and bought the house in 2014 and we weren't required to get flood insurance then and neither the lender or the builder or my insurance agent told me the house was in a flood plain. Anyone run across this before?
Palum
what Suineg set it to
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If that was not disclosed to you prior to sale you could potentially take legal action against the seller or agent, provided you didn't buy it as-is/without disclosures.
Also, I'm not really sure how it works but I only believe that is a lender or FHA requirement, just shitty/shifty work from everyone else. Pretty sure you can still self insure from a flood otherwise?
Also, I'm not really sure how it works but I only believe that is a lender or FHA requirement, just shitty/shifty work from everyone else. Pretty sure you can still self insure from a flood otherwise?
Khane
Got something right about marriage
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Sounds like Palum is completely right about extortion. Except it should be your current lender you're pissed at.
Khane
Got something right about marriage
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You're thinking about it wrong. The new lender researched and shared their due diligence. The old lender was part of the "fuck you, let's make money on suckers" club. Arative would have been royally fucked if ground water flooded his home since he was actually living in a flood plain he didn't know about.
opiate82
Bronze Squire
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Well most of the time the lender requires various insurances to cover their own asses right? I mean, what you're saying makes perfect sense but I just don't understand why a lender, given the choice, would NOT require flood insurance as it is no skin off their back...
Khane
Got something right about marriage
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Shall I recall your attention to the lending practices of the early to mid 2000s? We like to think the banks and brokers shored up their shortcomings but the reality is they just got more devious in the short term. I honestly believe we're ripe for another crash.
Arative
Ahn'Qiraj Raider
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My house was built in 2014. The entire subdivision was built since 2008. So it was well after the shit in the mid 2000s. We had friends that just did a refi a couple of months ago and no flood insurance. I posted on on subdivision webpage about it and not a single person said they were ever told they were in a flood plain. There were multiple builders and I assume lenders, so its not like it was one shady lender doing something. It's just really strange that the lender we're trying to register now says we need flood insurance.
Palum
what Suineg set it to
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Uhhh, borrower paying on PMI? So borrower buys house, house floats away and borrower defaults on mortgage because they lost everything and can't afford a mortgage on dead property. PMI pays off bank.
What exactly is risky here?
opiate82
Bronze Squire
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Palum
what Suineg set it to
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Well he's got a lender who doesn't care he's in a flood plain. Let's just assume they have a plan B.
It could also just be a risk assessment IE how many flood plain mortgages go tits up before the borrower pays off most of the interest and value to the bank vs. loss if it goes away, etc.
It could also just be a risk assessment IE how many flood plain mortgages go tits up before the borrower pays off most of the interest and value to the bank vs. loss if it goes away, etc.
opiate82
Bronze Squire
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I guess I'm just confused on the whole thing because I live and have home shopped in an area that has a significant floodplain and I have never heard of anyone actually managing to avoid paying flood insurance. Are there really mortgage companies out there that will forgo that, like if you want a house in a floodplain you can shop around enough to avoid the flood insurance?
My brother is house shopping right now in the same area and whether you'll need flood insurance or not is disclosed in the listing details like it basically is set in stone.
My brother is house shopping right now in the same area and whether you'll need flood insurance or not is disclosed in the listing details like it basically is set in stone.
Palum
what Suineg set it to
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Well the only difference between being criminally negligent and criminally fraudulent is malicious intent, right?
Who knows if they did it on purpose, but my guess is if he truly is in a flood plain they either ignored it or didn't do their due dilligence because A) they don't need to (ie high risk idgaf mortgages) or B) they didn't want to (laziness, out of compliance, whatever).
If you want to verify the flood zone claim contact your insurance agent and have them run you through the mapping software to get your flood zone for your property.
If its X, you don't need insurance.
If its A or A with a letter or V you do.
I can't remember off the top of my head but something like 1/3 of homes that flood aren't in flood zones. Look around your property for risk factors. Preferred policies are dirt cheap.
If its X, you don't need insurance.
If its A or A with a letter or V you do.
I can't remember off the top of my head but something like 1/3 of homes that flood aren't in flood zones. Look around your property for risk factors. Preferred policies are dirt cheap.
Arative
Ahn'Qiraj Raider
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Well after reading 47 different revisions of the flood map on fema's website, I found the one that removes the entire subdivision from the flood plain from 2008. Basically the lender didn't do any work, said, oh you were in a flood plain in 1996. I guess that's the problem using a no cost lender, they are doing the bare minimum.