Flood Zone Determination Companies

its all about making money. You dont make them any money but the 20 dollar flood determinations make them millions. There is no liability for them as the client can always hire their own expert and disprove them.

all experiences i have had with them they err on the side of caution. it actually stimulates a fair amount of business for us. "some flood company out of texas has decided we are in a flood zone and now we need an elevation certificate".

Same here. Some of those folks aren't real happy about it either.

Lately our county is requiring people to get them as part of the permitting process if any part of the parcel is in a flood zone, and the plot plan delineates it and the structure will clearly be out of it. Even if there is no bank involved. People don't like that either, but I do.

Since when does a bank care if a flood insurance company or anyone else is making money? It's all about a bank protecting itself from risk and massive loss, at the cheapest cost to hedge this risk. I am guessing that most of the time these companies error on the side of caution, and say insurance is needed. Maybe a few properties get screwed up over the years, but that is what liability insurance is for. Trust me, if one of these companies is found to be negligent, they are going to pay, not the bank.

The Banks are in the same ownership as the Flood Insurance Companies. That's the point. The Bank requires it to give the loan and their sister company reduces risk and collects another fee, while at the same time referring questionable ones for further study. This way they comply with federal government guidelines to lower closing costs and get more revenue at the same time. It's all business, law, and actuarial stuff. The Bank (or parent company) lowers closing costs by eliminating others in the transaction and retains or increases their own take in the deal. It's the same regulatory scheme that brought us all the foreclosures; the consumer is expected to know what is going on. As can be seen, the professionals involved don't even know. So when the consumer gets flooded and they don't have insurance it falls on the taxpayer, much like the loans that can't be paid. Bidness is Bidness.

I’ve had the same experience in northern CA with a Texas company issuing flood determination certificates. Also some building departments are requiring an elevation certificate for properties that are adjacent to a flood zone shown on the FIRM maps. The kicker is that in a lot of cases the flood zones are incorrectly shown on the FIRM maps.

In one particular area the FRIM maps show an AO Zone with a 3 ft depth expanding out from an adjacent creek. On the (flat) FIRM map it looks reasonable. The reality is the creek runs through a hillside neighborhood. The properties along the creek bank at the bottom of the hill are fairly flat and are possibly in an AO Zone. The lots that are one parcel removed from the creek bank are on a hillside that slopes 20% - 30% uphill from the creek. The lowest point on the parcel I was working on is approximately 50 feet above the elevation of the creek bank. The elevation difference across the lot from the lowest to highest point is approximately 25 feet. The FIRM map shows the parcel in the AO Zone with a depth of 3 feet. No amount of surveying to prove the relative elevation difference between the creek and the property would convince the building officials or the local FEMA representative that the FIRM map was in error. The property owner had to raise his house 3 feet to meet the building department requirement that the structure had to be above the FEMA flood elevation. The silliest part was that the building department let the property owner step the house elevations across the hill as long as it was at least 3 feet above the existing grade.

I agree that the banks, FEMA and building officials are in a CYA mode and the facts be damned.

Texas company issuing flood determination certificates

What is the name of the company?

I seem to recall that the Texas Board had issues with one such company 6 or 7 years ago.

Is it Federal Flood Certification Corporation?

Federal Flood Certification Corporation provides flood zone determination and certification services for lenders. It specializes in determining whether a property is in a special flood hazard area. The company offers audit and flood hazard determination services, as well as applications to the Federal Emergency Management Agency, letters of map revision, and letters of map amendment. It also provides certifications, such as life-of-loan and structure certifications, as well as Home Mortgage Disclosure Act information. The company was founded in 1992 and is based in Irving, Texas. Federal Flood Certification Corporation operates as a subsidiary of MetLife Bank N.A.

1555 West Walnut Hill Lane
Irving, TX 75038

Founded in 1992, Federal Flood Certification Corporation does not have any Key Executives recorded.

"Do you think these national flood zone determination companies that provide banks with letters stating the current flood zone of the property are opening themselves up to a class action lawsuit?"

No.

Texas company issuing flood determination certificates

I think that is one of them, but I seem to recall that there is another one in Austin. I hate them both.

The Pseudo Ranger, post: 132261, member: 18 wrote: Do you think these national flood zone determination companies that provide banks with letters stating the current flood zone of the property are opening themselves up to a class action lawsuit? They seem to be right most of the time, but I get 2 or 3 a months when the "banks" determination is different than mine.

For example, I got one today where a tiny corner of the property is in a Zone A (and in this county the new flood map is overlayed on the GIS parcel layer, so there is no scaling involved), not touching the house, but the bank is calling for flood insurance. This is because the out of town company can't tell if the house is in or out, so they call it in.

One last week, in a different county, the determination was Zone A, even though I provided the client with a copy of a pre-existing LOMA for the property. According to the client, the bank would not accept the LOMA because it did not list the new buyer's name on the LOMA (LOMA's never list names), and referred to a 1992 FIRM map, "so it must be outdated". That took a couple of hours of my time to straighten out. But, the client was on verge of purchasing flood insurance at the demand of the bank, but decided to call me to double check. They faxed me the bank's Flood Zone Determination document, and it had "No" checked next LOMA.

Like I said, I get 2 or 3 of these per month where their determination is IN, mine is OUT, or mine is IN, and theirs is out.

Just in coastal Florida, I'm betting there are thousands of people overpaying for flood insurance right now because of inaccurate and incomplete flood zone determinations. And worst part is, when I try to talk to a banker about their inaccurate determination, they tell me that what their guy determines is what they go with, and don't care to hear what I have to say. I have to get their guy's information, and file for what they call a "dispute resolution" myself.

I know this is an old thread, but do you have any more information about this topic regarding class action or misrepresentation? I've also had a determination company that cost me the sale of my house because of the incorrect determination. I contacted FEMA and they actually issued the LOMA on my property without any further survey or elevation study needed - that is how ridiculously wrong they were. I'm just trying to find out if there is any recourse available outside of a costly individual court battle. Thanks!

I do anywhere from 3 to 10 certificates a week and hadn't determined a flood zone in 10 years. I let the flood plain admin. make the call. If they disagree with the national company I let the two of them arm wrestle over it.

And remember just because a house isn't in the flood zone per the map, or if you determine it not to be, doest mean the bank can't require flood insurance on a loan. It's their money, they can still require flood insurance for a house on top of Mount Rushmore if they choose

Rich., post: 388065, member: 10450 wrote: And remember just because a house isn't in the flood zone per the map, or if you determine it not to be, doest mean the bank can't require flood insurance on a loan. It's their money, they can still require flood insurance for a house on top of Mount Rushmore if they choose

I had a client that spent some good money for me to prove his "slab on grade" lowest occupiable space was 0.7' above the BFE. He raised hell with his mortgage company for requiring flood insurance. He called me exploring "other" avenues.

I had to explain to him exactly what you said above. They're free to require anything they want and you're free to shop around anywhere you want for another mortgage company. Here's the kicker; his mortgage company was only going to add less than $30 a month to his note payment. I told him even though his garage was technically 'above' the BFE, the area was prone to high water. $350 a year for flood insurance isn't a bad price...

Hell, I'd lose twice that in Christmas decorations alone if my garage flooded....

Unless its a federally backed load (FHA, VA, etc.)

Rich., post: 388065, member: 10450 wrote: And remember just because a house isn't in the flood zone per the map, or if you determine it not to be, doest mean the bank can't require flood insurance on a loan. It's their money, they can still require flood insurance for a house on top of Mount Rushmore if they choose

I have a project right now where the property is å±1,500 feet away from and å±25' above the FEMA Flood Zone. Lender is requiring flood insurance anyway.

Jim in AZ, post: 388077, member: 249 wrote: I have a project right now where the property is å±1,500 feet away from and å±25' above the FEMA Flood Zone. Lender is requiring flood insurance anyway.

I have done ECs for some elderly clients getting a 'Reverse Mortgage' from national and reputable loan institutions. There homes were not in a flood zone or near one. It was a requirement for the loan. From my understanding, they would be reimbursed when the loan closed.
I thought it was predatory on Seniors and told a loan person at Wells Fargo.
Needless to say, I never heard from them again.

The bank can require flood insurance even if the structure is not in a flood zone.

[USER=249]@Jim in AZ[/USER]

I've had many a telephone conversation with the person behind wanting property outside of flood areas to be insured.

Most, the address puts them inside of the floodzone on google earth and is house is sitting on a knoll 1/4 mile away free and clear of any possible flood waters.

I've had to prepare a USGS topo map with the location and a Flood Hazard Boundary Map to send to them as proof.

Reluctantly, they gave it up and say their decision was from one of those agencies they contract with for $25 per location.

:confounded:

A Harris, post: 388100, member: 81 wrote: [USER=249]@Jim in AZ[/USER]

I've had many a telephone conversation with the person behind wanting property outside of flood areas to be insured.

Most, the address puts them inside of the floodzone on google earth and is house is sitting on a knoll 1/4 mile away free and clear of any possible flood waters.

I've had to prepare a USGS topo map with the location and a Flood Hazard Boundary Map to send to them as proof.

Reluctantly, they gave it up and say their decision was from one of those agencies they contract with for $25 per location.

:confounded:

Those $25 determinations are not by an agency at all,
If you dig, you will find out that they are a small subsidiary of the loan company or bank.
(So that should tell you how they tend to decide)
One can scorn the $25 charge but it is a "Volume
Business".

Take a state like Texas, let's suppose that they do 200/day. That may be conservative estimate.
So $25x200= $5000/day
$5000x 5 = $25,000/week
$25,000 X 52 = $1,300,000/year
That's not bad coin for an operation that has a few lightweight computer techs in a room somewhere in Mumbai. One can hire a staff of 5 for about $40k