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Flood insurance rate hikes may hurt

November 29, 2013

OBSERVER Staff Report U.S. Senator Charles Schumer is pushing for a delay in flood insurance hikes that could sink property values for more than 20,000 homeowners....

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(23)

Christopher

Nov-30-13 2:13 PM

By the way, Joey, I object very strenuously at the cost to Tax payers for the funerals of policemen. Nothing against Policemen in general, but the cost for example of the Governor showing up is a little much. I doubt those 1500 troopers that showed up were all on their own time and on their own expense account. I worked with a guy that died at work, did as wonderful job working with the developmentally disabled for many years. None of us got time off work or travel expenses to attend his funeral, and the Governor, nor the Commissioner of Mental Hygiene showed up either, nor should they have.

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Christopher

Nov-30-13 2:08 PM

No Joey, that wasn't it at all, and you know it.

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kcw007

Nov-30-13 12:14 AM

The interesting thing is that any federally insured mortgage in a "High Risk" flood zone is required to have flood insurance. The fading out of policy cost subsidization in these High Risk areas in favor of full risk pricing of flood insurance will effectively lower the value of these homes at selling. I guess that the potential exists for a modestly priced old cottage(pre-NFIP) with a recent FHA mortgage to be pushed "under water" over the course of the five year phase out of the subsidy? I would guess that the very idea of subsidizing this insurance in such areas in the first place in 1968 was to prevent the value of these properties from being driven down, but now the subsidy itself is non-sustainable Oh what a tangled web we weave!

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Martine

Nov-29-13 10:35 PM

We have been lucky here. No flood in the last 120 years, but we are close to the ocean and one can happen anytime. The houses I am talking about were build before floodzones and building codes were established.

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DKexpat

Nov-29-13 10:23 PM

Simple...don't build or buy in a flood zone. The rest of us, whether through tax dollars or higher premiums, pay for others' poor judgement.

If there are mapping/zone changes, it'd be fair to grandfather those owners. But if you're rebuilding after one of those hundred-year storms (which seem to hit every 10 years), the rest of us shouldn't be on the hook for the next time 'round.

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Martine

Nov-29-13 10:14 PM

What does Freddie Mac, Fanny May, MG, etc...have to do with the fact that middle class people are going to loose their houses and life savings. There is no reason taxpayers should subsidize houses in a flood zone. The problem is that the insurance rate doubles for every foot you are under the base flood elevation. The "unintended" consequence of that is that people living in modest, older houses pay 10 times more then the ones in newer more affluent houses.

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DKexpat

Nov-29-13 9:10 PM

The interesting thing about the federal bailout of Fannie and Freddie is that it's not like GM, AIG, or the banks . . . where the bailouts were loans or stock or temporary "ownership."

When Fan/Fred - which lowered the deficit $150 billion in the first 3 quarters of 2013 - are done paying back taxpayers at 10%, under the terms of their bailouts/conservatorships, they will still owe 100% and still be owned by the Feds.

It's like someone paying off a mortgage, and after 15 or 30 years the bank still owns your home 100%.

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DKexpat

Nov-29-13 8:41 PM

Um, Mr Pinecone, with the recovery of real estate, Fannie and Freddie have been -wildly- profitable...more profitable than Exxon, Apple, etc...and will have the bailout 100% repaid in approx. the next six months.

Before the crash they backed 75% of mortgages, now they do 90%, but Wall Street wants that money so Congress will do away with both companies over the next five years or so, which will increase mortgage rates and send to profits to Wall Street.

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concerned

Nov-29-13 7:28 PM

Actually that should read force people who don't need it to buy in! Government could screw up a one car funeral and double the cost.

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concerned

Nov-29-13 7:23 PM

This is just like Obama care you have to get people who don't need insurance to buy in so you can cover the costs of those who need it!

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joew

Nov-29-13 5:21 PM

And I only mentioned Gov. Cuomo by name because he failed to show for a troopers funeral by making some horrible excuse about a storm. Can't have it both ways there Pauly!

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Christopher

Nov-29-13 4:11 PM

ctually, Joey, I only mentioned Trent Lott by name because president Bush made a public statement trying to excuse the horrible performance of FEMA during and after Katrina, that some day he hoped to be having a drink on his Veranda overlooking the ocean, and he IS a millionaire. I mentioned earlier that I was against providing taxpayer funded insurance in flood zones to ANYONE, I even discussed Sunset Bay, and in neither of those statements did I mention any names or political affiliation. Of course, you had to make it a political issue, Joey. How predictable. I might add that relative to FEMA, there are huge swaths of land and housing still barren and wrecked and uninhabitable after Hurricane Sandy. I point that out to make sure you understand my issues on this are not effected by political affiliation.

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MrPinecone

Nov-29-13 3:29 PM

The National Flood Ins. program is a stupid program that encourages people to live in risky areas and the program is losing money. FANNIE MAE is a quasi govt program and a product of Roosevelt's New Deal that in recent years ecouraged risky lending activity... and it has lost BILLIONS. It's kissing cousin, FREDDIE MAC, is also bleeding green. FHA/HUD is in part, a government sponsored sub-prime lending scheme that is losing money. The United States Postal service is a fiscal black hole. What do these govt programs have in common? They are losing YOUR money... I'm sure those in charge at these losers will have Jobs waiting for them at OBAMACARE, Inc., and later, they'll head up the "single payer" healthcare system that is the end game of OBAMACARE.

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Martine

Nov-29-13 3:00 PM

The last hurricane in Brunswick was in the late 1800. No more flooding since and we are thankful for that. On the average, the city is about 7 feet above sea level. For houses build above 14 foot, the insurance remains at about $ 500 - $ 1,000 per year depending on the size. Most of the newer, bigger houses are above this level. But the more modest, older houses in Brunswick were build on a slab at 7 foot. The insurance premium for these ranges from $ 7,000 to $ 12,000 per year for a $ 100,000 house. The median income level for a family in Brunswick is $ 29,000

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kcw007

Nov-29-13 2:23 PM

The July, 2013 GAO report, "Flood Insurance: More Information Needed on Subsidized Properties", deals with some of these issues. Of primary concern to the overall federally subsidized flood insurance program is that those properties which experience the most frequent losses, are also likely to be those most subsidized, an obvious lose-lose situation. Also related is the subject of "owner behavior", wherein certain property owners refuse to take suggested mitigation measures, most commonly calming lack of funds. Apparently, the bottom line for the federal program to remain, is that the subsidy rate needs to lowered on high loss properties or the price of a policy on non-subsidized properties needs to be raised. Considering the combination of frequent payouts, and low owner $ contribution to the program, a government buyout of high loss properties may be sound fiscal move. Maybe a "right of 1st refusal" type program?

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kcw007

Nov-29-13 1:52 PM

The GAO reprot

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joew

Nov-29-13 12:50 PM

Must be Trent Lott is a republican right Pauly? You are so predictable!

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Martine

Nov-29-13 11:46 AM

We have never flooded and I am grateful for that. I wish the Government would buy us out if that should ever happen. In the mean time, we can't afford the flood insurance.

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Christopher

Nov-29-13 11:03 AM

Maritime, the deal is that the next time your home floods, you should be bought out so you can move. I'm not talking about 100 year flood plains, I'm talking about building Trent Lott's beach home in Mississippi after hurricane Katrina, that sort of thing. Sunset Bay may not be filled with millionaires but continuously rebuilding is economic nonsense. There is no good economic argument to rebuild continuously flooding areas. As long as the government pays ONCE to move you, what's the damage? Answer: none.

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Escapee

Nov-29-13 9:57 AM

Where is Schumer going to get the money to pay for this? He isn’t going to pay for it and he doesn’t care about cost. His plan appears to be to buy votes by bankrupting my country.

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Martine

Nov-29-13 8:07 AM

I live in the city of Brunswick in Glynn county Georgia. 97% of the city is in a flood zone. - We live here because we load the ships and perform other tasks related to the Brunswick harbor which exports tons of American-made goods. - We are the ones who make up your bed, clean your hotel room and provide the towels so you can enjoy our beaches. - We are the ones who bring your foods and drinks and clean the tables after you when you visit our restaurants. - We are the ones who catch the fish and the crabs you eat inland. We also process these foods so they are conveniently available to you in the freezer in your store - We are the ones who stand in the burning sun on the beach to make sure our swimmers are safe. - We are the ones who work in the stores, the hospitals, the bike rentals .... We don't have a beach view and we are not rich. We can not afford the new flood insurance rates.

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Steiner

Nov-29-13 8:03 AM

on this i agree with christopher. even in Denmark, land of windmills and kumbaya for the environment, they bought out some landowners near the sea. why ? the danes realized, it took them 400 years that the sea cannot be fought. It needs a place to flood the land. So the danes bought out the landowners and allowed the sea to rush in . wow, common sense, but it took hundreds of years to get it.

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Christopher

Nov-29-13 6:32 AM

The reverse side of this is that the rest of us are subsidizing people who are routinely flooded and refuse to move. These people should be bought out at market prices, and made to move. Nobody is hurt by that and it's cheaper for the rest of us. Much of the expense in major storms is to rebuild the beach and waterfront homes of millionaires. If Mr. Schumer has that much clout, he ought to be able to get that buy-out money on a one term deal.

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