President Obama signed into law a bipartisan bill reversing much of a 2012 overhaul of the government’s flood insurance program. This comes as a relief for homeowners living in flood-prone areas who would have seen large increases in insurance costs.
The changes to the original program were made to help eliminate subsidized rates for those in flood-prone areas. Implementing this required significant updating of the flood maps used to set premiums, resulting in often-unaffordable rate increases for many homeowners along the Atlantic and Gulf coasts and in flood plains.
To help combat the extreme rate hikes, the new law caps flood insurance premium increases at 18 percent a year. However, people whose second home is in a flood zone and those whose properties have flooded repeatedly would continue to see their premiums go up by 25 percent a year until reaching a level consistent with their real risk of flooding.
In a positive development for the real estate industry, the law allows sellers of homes built before the original flood maps were drawn to pass their subsidized insurance rates on to the people buying their homes.
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Industry Trends
WFS Jumbo rate – 5/5 ARM: 2.75%
Other WFS rates – Check with your GSM for current rates.
Refi Index – 1432.2 (-6.29%)
Purchase Index – 174.0 (+4.00%)
NAHB Builder Confidence – 47 (+2.17%)
Existing Home Sales – 4,600,000 (0.43%)
New Home Sales – 440,000 (-3.30%)
Pending Home Sales – 95.0 (+0.11%)
(As of Mar. 27, 2014.)
SOURCE: Mortgage News Daily
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