Quote:
Originally Posted by LOCOChief
Refinancing will do nothing to solve this issue. Coverage requirements will be the same.
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Unless there is some new law in effect here is the requirements that I was told by my original lender and what I signed at the time I took out my loan. This is from FloodSmart.gov
Why does my mortgage lender require me to buy flood insurance?
Under federal law, the purchase of flood insurance is mandatory for all federal or federally related financial assistance for the acquisition and/or construction of buildings in high-risk flood areas (Special Flood Hazard Areas or SFHAs).
The amount of flood insurance coverage required by the Flood Disaster Protection Act of 1973, as amended by the National Flood Insurance Reform Act of 1994, is the
lesser of the following:
The maximum amount of NFIP coverage available for the particular property type,
The outstanding principal balance of the loan, or
The insurable value of the structure.
If the property is not in a high-risk area, but instead in a moderate-to-low risk area, federal law does not require flood insurance; however, a lender can still require it. It is also recommended since historically one-in-five claims come from these moderate-to-low areas. Note that if during the life of the loan the maps are revised and the property is now in the high-risk area, your lender will notify you that you must purchase flood insurance.