FEMA administrator Craig Fugate is urging Congress to act on a multi-year extension of the National Flood Insurance Program to create more stability in the housing market.
"It is very detrimental to have short-term authorizations, particularly in a real estate market that is trying to right itself, when we have lapses in the ability to write insurance, and uncertainty," Fugate told the Senate Banking Committee late last week.
"It makes it difficult for Realtors and others to do closings as well as Write-Your-Own companies to manage their portfolios and continue to offer their services," the Federal Emergency Management Agency chief testified. (Private Write-Your-Own companies market flood insurance policies for FEMA.)
Last summer, Congress was forced to pass multiple short-term NFIP extensions. The flood insurance program is due to expire again on September 30.
The House Financial Services Committee has passed a five-year extension of the NFIP that will reduce existing subsidies on insurance rates for most properties in flood plains. The bill (H.R. 1309) hikes flood insurance rates by 10% to 20% a year until they reach actuarially sound levels. The committee passed the bill by a 54-0 vote in June, but the full House has not yet acted on the measure.
America Land Title Association chief executive Kurt Pfotenhauer called on Congress to act quickly on H.R. 1309. "A long-term, sustainable extension is necessary to provide certainty to recovering real estate markets that the National Flood Insurance Program impacts. This would avoid a repeat of last year," Pfotenhauer said.
