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U.S. Senate passes ‘Homeowner Flood Insurance Affordability Act’

Thanks to U.S. Senator Jeff Merkley and committee, homeowners will be spared an unprecedented increase in flood insurance premiums, and in many instances the loss of home and hearth.

Merkley sponsored 'National Affordable Flood Insurance Act' passed in U.S Senate by wide majority
Photo by Brendan Smialowski/Getty Images

According to the Democratic Party Senate floor 'wrap up report' Thursday, January 30, 2014, the United States Senate passed S.1926. the “Homeowner Flood Insurance Affordability Act” of 2014. Thereby modifying the "National Flood Insurance Act" of 2013.

Senator Jeff Merkley D-Oregon by most accounts is a man of the people. Raised in rural Myrtle Point as the son of a millwright, Jeff consistently watches the collective back of his Southern Oregon constituency. And, has been effective in Washington D.C. as to his successful sponsorship of several bills and initiatives beneficial to the residents of Oregon.

Presented by Merkley in late 2013 through a bi-partisan committee, the new mandate effectively modifies a Senate bill that may have resulted in the forfeiture of 100s homes throughout Oregon and the U.S., as the result of an unprecedented increase in flood insurance premiums.

As Merkley puts it…”While the Senate continues to work toward a long-term solution to flood insurance, Oregon families shouldn't be hit with drastic flood insurance rate hikes that are unaffordable or will make their homes impossible to sell. I am glad that the Senate acted in a bipartisan fashion to freeze the rate hikes, and I'm going to be urging the House to act immediately to provide relief to homeowners.”

For many homeowners deemed by outdated FEMA flood maps to be living in an historical flood zone; many maps not updated for decades; it was reported that flood insurance rates could increase 10 fold in as many years. Rumors of Insurance premium rates approaching $10K per year circulated the state’s real estate industry.

For some homeowners this would result in insurance premiums surpassing their monthly mortgage payment; effectively doubling the monthly cost of residency. For landowners holding property for future development, the 2013 legislation rendered properties situated in or near historic flood zones unsaleable.

The further implication of a stalled or disrupted real estate sector recovery compelled the National Association of Realtors, National Builders Association and Mortgage Brokers to contact lawmakers.

Oregon, arguably one of the wettest states in the Union has struggled to climb out of the national recession, and according to the Oregon Association of Realtors would lose any economic traction or rebound gained in the housing sector through the implementation and enforcement of a FEMA sanction flood insurance rate increase.

While the issue has certainly not gone away for good, the Merkley initiative mandates that prior to pressing for across the board increases, that FEMA complete an affordable study, propose solutions and improve the reliability of the flood plain maps.

Thousands of homes and ranches in Oregon and much of the United States are located in 100, 300 and 500 year flood plains. Granted, much of the United States has been inundated by flood and hurricane caused tidal surges resulting in $ trillions in FEMA underwritten covered damages. According to the Fed, the fund is depleted.

FEMA is pressing for fund reserve accumulation and disaster relief pay back over a 10 year period through flood insurance rate increases.

But, instead of targeting those homeowners opting to rebuild on recent recurring flood plains or coastal regions prone to annual flooding, FEMA is looking to penalize all homeowners living in a region with a remote chance of flooding or tide surge.

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