Flood insurance costs are rising down the Jersey Shore

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The New York Times reports that New Jersey's shore residents hit hard by Hurricane Sandy are facing a new problem- the rising cost of flood insurance.

Uncertainty about the future cost of flood protection is hampering the housing recovery in coastal communities hit hardest by Hurricane Sandy.

Premiums for the National Flood Insurance Program are certain to rise in coming years as a result of a Congressional mandate to bring them into line with real risk levels. The question is, by how much?

The Federal Emergency Management Agency is updating flood hazard maps to assess present-day risks, but until the redrawn maps are finalized, and the rates revised, neither homeowners nor mortgage lenders can accurately estimate the affordability of future premiums.

FEMA is also phasing out the subsidized rates granted to policyholders with homes built before local flood maps were first drawn. The agency estimates that about 20 percent of the 5.5 million policyholders receive these subsidies.

The unknowns around flood insurance rates could pose a problem for lenders, especially because, under the terms of the Dodd-Frank Act, they must document a borrower’s ability to repay a mortgage over the life of the loan, said Doug Rossbach, a vice president in charge of the mortgage banking practice at North Highland, a global consulting firm based in Atlanta. “Premiums could go skyrocketing,” he said. “The lender is in a pretty tough spot. How can the lender know if the borrower can afford to stay in the property, or spend the money to elevate that property?”

Once the maps are revised, some coastal property owners who don’t pay for flood insurance may have to. Lenders haven’t necessarily recognized that yet, as Mr. Rossbach recently discovered when he applied to refinance his house in Rumson, N.J. His house flooded during Sandy, and although he hadn’t been in a flood zone before, preliminary map revisions show that he will be. The lender “never asked me about flood insurance,” he said, “because the effective maps don’t show me in a flood zone. But lenders are beginning to pick up on this, and it’s going to make it tougher for the consumer.”

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if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Just what does your homeowner's insurance cover?

Hurricane Sandy was a wake up call to many homeowners who had to struggle with their insurance coverage.  Knowing just what is and is not covered by your insurance policies is an important part of homeownership.  Realty Times' most recent posting discusses what you should know about coverage and exclusions.  Confused?  Seek help from a professional insurance agent.

Read the full Realty Times article.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Hurricane Sandy - mortgage relief is on the way

The New York Times reports:

HOMEOWNERS reeling from the effects of Hurricane Sandy may find that their mortgage servicer is willing to ease some of the immediate financial burden. 

Both Fannie Mae and Freddie Mac — the mortgage finance giants that guarantee or own most residential mortgages — have authorized their servicers to grant a 90-day forbearance period to borrowers in federally declared disaster areas.

“The expectation is that your life has been disrupted and the house may have been damaged,” said Brad German, a spokesman for Freddie Mac, “or your place of employment may have been damaged and your job may be unavailable.”

What is forebearance?  At its most basic, the lender agrees not to take action against a delinquent homeowner.  In exchange the homeowner agrees to a payment plan that brings him current with the lender is a certain period of time.

What to do if you are in a disaster area and having difficulty making your mortgage payment?  Contact your loan servicer, you can find the contact information on your mortgage statement or its website and explain your situation.  Do not, I repeat, do not, wait for the servicer to contact you.

If you are not sure you are in a disaster area, go on-line to fema.gov/disasters.

Read the full article.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Hurricane Sandy delays loans

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We have received a letter from a local community bank of consequential size advising that all loans in the pipeline heading toward closing will be delayed until each property is inspected by an appraiser. The New York Times has picked up on this new challenge to getting a mortgage in New Jersey.

THE extensive power failures that have paralyzed the region in the wake of Hurricane Sandy have understandably delayed closings in mortgage deals that had otherwise been buttoned up. But lenders are adding to the logistical bottleneck by requiring that properties in affected areas be reinspected for damage.

“If you are in a FEMA-declared disaster area or emergency area,” said Jason Auerbach, a divisional manager for First Choice Loan Services, of Morganville, N.J., “banks are requiring an inspection of the home to affirm whether there was damage done. They are reinspecting properties to make sure it’s still a functional property that can be lived in.”

We have had one closing postponed because the borrower disclosed water damage to the property just as the loan was being scheduled to close.

For properties in areas that didn’t suffer extensive storm damage, the inspection may constitute no more than a drive-by. The delay in such cases may be no more than a few days.

Both buyer and seller may also be required to sign a form attesting that they agree the property suffered no storm-related damage. Regardless, buyers should do a thorough walk-through well before the day of closing, advises Scott Penner, a real estate lawyer in Milford, Conn.

If you are advised of a delay by your new lender, be sure to discuss the effect of the delay on your interest rate!

Read the full story here.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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