Flood Bill Passes, President Signs Measure

The House and Senate passed another short-term extension bill Thursday evening that will allow for the continued issuance of new flood insurance policies, and unemployment benefits. President Obama immediately signed the bill (H.R. 4851) that extends the National Flood Insurance Program through May 31. The Federal Emergency Management Agency's authority to write new flood insurance policies, renew policies or increase coverage expired on March 28. Without flood coverage, lenders would not originate loans on homes located in designated flood zones. The NFIP reauthorization is retroactive, which means that any mortgage transactions completed during the three-week hiatus will be covered if the borrowers completed an application for flood insurance. (However, there must be proof they paid the insurance premium, including a copy of the check.) Flood insurance reauthorization had become ensnarled in a tax extension bill. Congressional tax writers hope to find ways to pay for the tax provisions until the end of this year, but so far have been unsuccessful. They have been "kicking this can down the road" with short-term extensions for the past six months, one lobbyist said.