In Louisiana, we often get calls from people who bought land who suddenly find that their floodplain delineation is wrong. Either they find that they are now suddenly in the floodplain or not in it, all based upon an erroneous determination at time of sale by the bank's flood plain research subcontractor.
Example:
John buys a house and finances it.
Bank gets a flood plain determination done by one of their mail order contractors.
The mail order flood plain contractor says it is not in flood plain (erroneously).
5 years later John sells house and buyer gets financing.
The new mail-order flood plain contractor says it is in the flood plain.
Bank requires flood insurance at cost of $300/month, and he pays.
5 years later a professional land surveyor surveys it and finds that it is not in flood plain.
There is too much innocent purchaser victimization in this process. The young couple buying a house might not even know the ramifications of flood plain, and they just go along with the bank's "expert" or whatever they are told by the realtor, bank, and/or closing attorney.
This is a travesty. In my opinion, the determination of the boundary of a 100-year flood plain is a perfect example of why professional land surveyors are needed--to protect the interest of the public.
What am I missing?
I don't think you're missing anything. I get calls regularly from people whose lender is requiring flood insurance as a result of a determination made by someone 2000+ miles away from the property. Quite a few of those turn out to be wrong.
On the bright side, it's my understanding that, in the event it's ultimately determined that the structure is above BFE, any premiums paid out as a result of an earlier erroneous determination are refundable.
SS
I agree with you. To the best of my knowledge, these nationwide map readers are not required to prove that they know what they are doing. Of course, they err on the side of caution routinely thus making their clients (the lenders) happy.
Years ago I received a phone call one evening from a lady all distraught over such a determination and was wanting to fight it. She told me exactly where she lived and I recognized where that was. On top of a hill. So I had her start reading the information she had been given. When she started reading the legal description I stopped her and told her what had happened. She was thrilled.
The form indicated she owned the west half of the east half of the southeast quarter. She actually owned the east half of the west half of the southeast quarter. Neighboring tracts, but hers was the hill top and the other was the creek.
In several other cases there might be a small area on a very large tract that was in the flood plain but all improvements were nowhere near that small area. Nevertheless, the report came back marked "could be in floodplain". Only if they were living in a house boat on the river that touched one corner of their property up on the bluff.
I had basically this exact same thing happen to me.
Bought house in 2009 and it was determined it was not in a flood plain.
Go to refi in 2012 and was told it is in a flood plain and had to buy insurance.
House is paid for now so it does not currently matter but I do wonder what will happen if I ever decide to sell.
We have 20+ acres and some of it is in the flood plain but the house itself is not at least based on my interpretation of the maps.
"What am I missing?"
You are not misssing anything, it's THEM whom are missing something. A surveyors license comes to mind. I don't think any of THEM know what a LOMA or LOMR are, much less how to apply it to the situation at hand. When it gets right down to it I'll usually tell the lender who is requiring the flood insurance, based on a non-surveyors opinion, to obtain a certified elevation certificate from THEM.
B-)
I took this question to the Idaho board. Under our current laws they cannot be stopped.
The ones that get me are those who have made up a seal with the company name on it. It looks just like our PLS or PE seal but the wording is different. It will take legislative action to stop them...
House is paid for now so it does not currently matter but I do wonder what will happen if I ever decide to sell.
You will have problems, and so will many others who have the same issue.
Here's the competition
Mortgage lenders use a number of services to determine whether flood insurance is required or not. And believe me, they err on the side of caution. These "experts" can charge as little as $50 to tell a mortgage company whether or not to require flood insurance. And the lenders listen. I agree it is a travesty.
Is it illegal to charge someone to tell them a piece of property may be in a flood plain? Probably not.
I generated an EC for a client in an attempt to waive the flood insurance requirements. The entire property was NOT in any flood-prone area. It was close by, but did not affect the property. The structure was five feet above the BFE.
The lender would not waive the requirements. The client retained an attorney. Although I eventually obtained a LOMR for the client, they had to find a different lender. As the client's attorney put it: You're free to get a mortgage anywhere you wish. Mortgage companies are free to require anything they wish. If you don't like their requirements, find a different lender.
The mortgage and insurance industry is one of the least regulated or prosecuted bunch of crooks in our world today. Hookers and pushers have better morals than these folks.
As many of you know I am not a licensed surveyor, but I do surveying type things on a daily basis in the course of my business.
I know anything I do myself regarding this matter will not be usable for any purpose other than my own info and that I can not rely on it being correct.
Is there something I could check myself and see if it *Likely* correct or not?
I assume they publish an elevation that if you are above it you are ok and if below it you are in the flood zone? I have the tools to determine my elevation.
My thoughts were to check it out my self and see if it worth hiring a professional to try and fight it. I mean if I check and I think am ten feet below the flood limit then there is not much point in trying to argue with them but if I check and think I am ten feet above it would probably be wise to hire someone to explore it further.
Like I said it is not a real high priority issue now as the house is paid for so I don't have to buy the insurance and I don't have any plans of selling anytime soon but I am curious about it.
A lot of the major lenders (banks etc) have set up the determination companies as subsidiaries of themselves to milk every dollar (by volume) out of the buyers. You do the math..500 determination a day at $25 equals $12500…$62500/week…$3,250,000/year. Not bad volume profits considering they also outsource the determination to some young guys sitting in Mumbai looking at some unknown digital map wit unknown location parameters.
Good luck with going up against the major banks about this using your state BOR..
I know there's been a complaint made to our board about this, but I don't know if anything will come of it.
"Like I said it is not a real high priority issue now as the house is paid for so I don't have to buy the insurance and I don't have any plans of selling anytime soon but I am curious about it."
you say that you have been there for a while so i assume that you know where the water runs, and doesn't, when it rains. i would look at the water and not the fact that your house is paid for.
at my house, there is a creek in the back that has a flodplain shown which my house is around seven feet higher than the BFE on the high side of my lot. the problem lies not in the creek, but in the land above my house that drains across my property to get to the creek. the house is more likely to flood from up hill to down hill drainage than from the creek risisng. in recognizing the problem, i have created swales to divert the water around the house and into the backyard.
just saying...there are more ways to be flooded than a rise in a creek or river.
also, just remember that flood insurance is for the structure and not the land.
enjoy and make sure you get it right. flooding is flooding regardless of where it comes from.
Where I am it has nothing to do with Banks, their hands are tied because the FEMA maps are plotted on the county GIS and if the house is in they require insurance, not sure what else you would expect them to do.
The problem is with the zone A maps showing the house in when it's up to 13' or more out. There is the real problem.
I would think a mortgage company should require insurance when the "official" map shows a house in. Don't blame the banks for protecting their investment, blame the awful mapping.
> On the bright side, it's my understanding that, in the event it's ultimately determined that the structure is above BFE, any premiums paid out as a result of an earlier erroneous determination are refundable.
>
I believe it is only the previous 12 months premiums. If you have been paying unnecessarily for 15 years you will not get that all back.
I see the same thing in Florida all the time, and the thing is, the banks will side their $10 flood zone determination over my survey every time ... I had one where I overlayed an aerial onto the flood map, aligning the roads, to show the property was outside the lines, and the bank/flood zone company refused to change their minds... and told the owner if she dropped the insurance they would put her in a policy, at the max rate, and add it to her mortgage. Seems like extortion.
You should read the FEMA flood mitigation policy on use of digital flood hazard data. The use of improvements and Section lines to align a FIRM is not allowed. They will make an exception for older maps with no geographic coordinates or grid ticks.
I assume they publish an elevation that if you are above it you are ok and if below it you are in the flood zone? I have the tools to determine my elevation
If you are in a Zone Ae then you will have a BFE (base flood elevation) for your building, you locate the LAG (low adjacent grade) of your house and buildings, and if you are above that then you should be OK. You will need the Map for your area and get onto the FEMA website and plot your house on the profile to find the BFE.
If you are in a Zone A, then you have to cross section the valley and stream, upstream and down stream and at your house. Give that info to a qualified engineer, have him run the calculations for a flood plain and he can find your BFE.
7+8=?
It is my understanding that there are two GIS firms in Texas who specialize in these Flood Determinations. It is my understanding that they charge $7 for a determination. They do err on the side of caution. It is also my understanding that the banks around here charge $15 for the determination - in other words, the banks make $8 per determination. The banks make more than those providing the cautious information...
Never be afraid to make a profit.
The real travesty is that the innocent purchasers rely on the flood zone information provided to the bank. When the bank lets the purchaser know it is not in flood zone, they interpret it to be official.
So, the bogus determination does two things:
1. Helps bank to determine if it needs to require flood insurance.
2. Cheats the buyer by the bank giving the indication to the purchaser that it is not in the 100-year flood plain. That in itself is the travesty or wrongdoing. It is not necessarily the person making the determination for the bank.
Normal non-technical people trust what banks tell them about stuff like this. Maybe the claims were against the wrong people.
MightyMoe,
My issue with the Banks is simple. The 'official maps' show the flood hazard boundaries. While improvements are shown, FEMA is clear to state they are not to be used in determining if a structure is in or out. The physical location of the structure related to the geographic coordinates and grid ticks is the way to go.
I have seen structures in GIS databases out of sync with reality by hundreds of feet. The same goes for Google and the FIRM panels.
When I send the bank a highlighted copy of FEMA policy and a signed survey and elevation certificate that should be the end of it. Any more I have to follow up with a LOMA OAS (out as shown). In my opinion the 'flood specialist' and the Bank should be on the hook for all costs after the survey is done. It is their refusal to accept the proper determination of a Professional that forces the extra work and cost.
At one time Surveyors provided 'flood letters'. They were preliminary determinations of flood risk based on record information. The form clearly stated what it was and what it wasn't. If the Bank thought the risk was there the owner could order an elevation certificate. The banks and insurer were not so dense as to refuse to relent and go with the certificate. Now we have the same form being prepared by Google Jockeys and it is assumed to be golden...