Okay…I’m officially obsessed not just with foreclosures but now with Biggert Waters….and that makes me kind of unpopular in certain environments. Tonight I was with a group of Realtors, and their stories are only hints of the economic catastrophe that is happening all around is…especially in Florida. Not just coastal Florida….any where in Florida that’s near any bit of water. (which is pretty much everywhere) And Biggert Waters is not just a big, big problem for Florida, it will seriously impact millions of homes and billions of dollars in property value nationwide.
Flood insurance premiums are rising, rising seriously, all across the country. Pinellas County is the most severely impacted by this rise in premium prices because we have more homes below the FEMA Flood Maps than any county in the nation.
By way of example, an insurance agent quoted a new flood policy which is currently at $3,400 at $56,000. Yes, you read that correctly $56,000, or FIFTY SIX THOUSAND DOLLARS!
As I drive around neighborhoods in St. Petersburg I see homes that are now completely worthless. A home with a value of say $200,000 that’s going to have a new insurance premium of $10,000 is completely unaffordable for the income that would support that home and so that home just is not going to sell!
But it’s not just property owners…think about contractors and trades. You see, as I drive around, I see a real estate boom all over again. Rehabbing older houses and pumping millions of dollars into the economy. But now when I look at hundreds of thousands of dollars of work being done to pre-FIRM homes, I know that the people (and the banks) have absolutely no idea that all that money being spent to rehab pre-FIRM homes is wasted.
Pre- Flood Insurance Rate Map (FIRM) buildings are those built before the effective date of the first Flood Insurance Rate Map (FIRM) for a community. This means they were built before detailed flood hazard data and flood elevations were provided to the community and usually before the community enacted comprehensive regulations on floodplain regulation. Pre-FIRM buildings can be insured using “subsidized” rates. These rates are designed to help people afford flood insurance even though their buildings were not built with flood protection in mind.
And where are the dear friends, The Banks….The Servicers in this whole mix? It blows my mind that I have not yet heard of escrow revision statements appearing in mailboxes advising borrowers that their payments will be increasing by hundreds….or thousands of dollars each month.
I spent the last four years trying to talk some kind of sense into the state legislators who could seem to care less about the complex issues related to foreclosure but they would not listen.
The evidence of the truth of this statement is the horrendous piece of foreclosure law that now governs cases. It’s a mess for all sides…not just homeowners. And while we spent untold hours and spent disgusting amounts of money to try and project some voice of reason into these legislators, all they wanted to hear was, “CLEAR THESE FORECLOSURES!”
While Florida state legislators were screaming for foreclosure reform, why didn’t they say a word at all about the Biggert Waters Flood Act that has wiped away billions of dollars in property value in Florida?
(They have no answer for that)
But the most disturbing thing is how our state’s courts are just marching ahead carrying out these orders of the legislative branch….like they are some kind of child, subject to the discipline and orders of the legislative branch.
All we can do right now is sit back and watch the flood waters rise…..
