A letter sent to U.S. House of Representatives and Camden Fine, CEO of the Independent Community Bankers of America, warns that the new law “is already depressing home values and freezing the market in certain communities.”
Fine maintains flood insurance premium increases would be equally “drastic and unsustainable” for homeowners, mortgage lenders and the broader economy.
“Premiums of $25,000 a year or more on modest single-family homes are disproportionate to the risk and to the value of the home,” the letter notes.
In some cases premiums will increase by 500% or more, Fine wrote, as premium increases are triggered by a new flood map or by a transfer of ownership, “even if a property is built to code under then-current flood maps and have never experienced a flood.”
ICBA calls for amendments starting with the implementation deadline.
Fine is urging legislators “to expeditiously pass legislation to stop the increases until the Federal Emergency Management Administration completes a study to determine their impact on affordability” and fully explores potential solutions.