The FEMA's National Flood Insurance Program is set to expire May 31. Should that happen, it would mean a virtual halt to all real estate sales and purchases...
May 23--The stare-down that's been crippling Congress in the buildup to 2012's presidential contest has yet another potential victim that hits mighty close to home.
The Federal Emergency Management Agency's National Flood Insurance Program is set to expire May 31. Should that happen, it would mean a virtual halt to all real estate sales and purchases involving a mortgage, since no lender will take the risk if the federal flood insurance is not available in flood-prone areas. That includes all of the Florida Keys.
However, the stalemate in Washington doesn't lie at the feet of the House of Representatives this time.
The House actually passed a five-year authorization bill last year. That legislation seeks reforms in the way the program is administered and who can qualify, and would exclude some investment properties from the subsidized program.
Last week, House members -- seeing no movement by their Senate colleagues -- passed a 30-day extension on a vote of 402-18, so you can't blame the Republicans and Democrats for playing politics with this one in the House.
But you sure can in the Senate, where Senate Majority Leader Harry Reid (D- Nev.) tried to get a similar 30-day extension in the Senate. But Sen. Tom Coburn (R-Okla.) put a stop in the way, arguing for reforms.
Coburn wants to see owners of million-dollar coastal properties and vacation homes excluded from the program, along with other reforms that were part of the House package passed last year.
Miami Realtor Moe Veissi, president of the National Association of Realtors, issued a statement warning of the consequences of further delays or inaction:
"The short-term extensions and shutdowns have exacerbated uncertainty in real estate markets and are inhibiting long-term investments that are vital to the U.S. economic recovery," he said.
If you'd like to register your feelings about the U.S. Senate's inaction, here's the contact information you'll need:
For more about the National Flood Insurance Program and the stalemate, visit the American Insurance Association website at www.aiadc.org.
(c)2012 the Florida Keys Keynoter (Marathon, Fla.)
Visit the Florida Keys Keynoter (Marathon, Fla.) at www.keysnet.com
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