WASHINGTON – Feb. 13, 2014 – Yesterday, House Majority Leader Eric Cantor announced that the U.S. House “will consider a modified version of the Homeowner Flood Insurance Affordability Act the week of Feb. 24.”
The good news for Realtors, homeowners and homebuyers is that Congress plans to do something about flood insurance policy rates that have skyrocketed. But it’s also clear now that the House does not plan to pass the same bill the Senate approved two weeks ago. If the House passed the Senate bill, it would then go to President Obama for his signature or veto; however, if the House creates and approves its own bill, it must then go back to the Senate for consideration.
According to Cantor, the Senate’s bill “irresponsibly removes much needed reforms and imposes additional costs on taxpayers.” Many Representatives balk at a four-year premium delay included in the Senate’s bill, worried that the National Flood Insurance Program (NFIP) doesn’t have enough money to respond to a major U.S. storm. In that event, taxpayers might have to bail out the program.
Still, the House appears ready to provide some type of relief. In a statement, Cantor says, “The House will act to protect the flood insurance program but also protect homeowners from unreasonable and unrealistic premium increases.”
According to CQ Roll Call, a news and legislative tracking source, an unnamed House insider said the House bill would possibly opt for a yearly rate cap – perhaps a maximum flood insurance increase of 15 percent per year, regardless whether the property is sold or if flood insurance has lapsed. If that cap is introduced, it might also apply to second homeowners, investors and commercial buildings – not just homesteaded owners. It also might be retroactive and help owners who have already received higher bills.
“The House appears ready to move forward with flood insurance legislation, and that’s the really good news,” says John Sebree, senior vice president of public policy for Florida Realtors. “However, it’s still difficult to predict where this will end. The House plans to study the Senate bill and possibly include some of that bill’s proposals, including possible relief for buyers at the time of a home sale.
“It appears Congress is on the right track, and some kind of premium relief seems more likely following Rep. Cantor’s announcement,” he adds.
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