Mortgage Company Require Flood Insurance (Austin, Round Rock: loans, house, buy) - Texas (TX) - City-Data Forum

UKjay · 12-03-2008, 06:39 AM

We closed on our house in June. Today we received a letter from the mortgage company requiring us to purchase flood insurance due to the location of the house. We have no "pre-buy" papers indicating the property was in or under consideration as a flood zone. What did we miss and for heavens sake how? We are in Forest Creek in RR and pretty shocked at this new information. Have maps been recently updated, if so where can I look? Obviously if this is a problem we'll buy the insurance, but at no time did we think this was an issue.

Roland3dfs · 12-03-2008, 08:33 AM

I am in the mortgage business and I can tell you that normally, if your home is deemed to be in a flood zone prior to closing, you may not close unless you purchase flood insurance. But flood zones do change from time to time and the closing title officer should have relayed to you that if this does in fact happen; you will be required to obtain flood insurance at the time. You should have this in writing amongst the large stack of closing documents you received at closing.

FalconheadWest · 12-03-2008, 09:19 AM

Pull out your survey. Does your survey show you're in a flood plain? If not, it would be a new determination... however, pull up the 100 year floodplan online, and I doubt you've recently been placed into a floodplain. Then, just submit that paperwork to your lender. Some lenders from other states don't "understand" the different parts of Texas.

UKjay · 12-03-2008, 10:04 AM

Sigh, I'm sifting through documents now. There was no mention of flood insurance, written or verbal that we recall nor mention of new maps. I feel certain that we would have taken inclusion in a flood plain into serious consideration when making an offer (or not) on the house. Makes me suspicious though since the owners wanted to close so quickly (but then again, who knows ;-) I'm sure all will be OK, just jolly cross this letter shows up today out of the blue.

Trainwreck20 · 12-03-2008, 10:09 AM

I would be wary of whether you really need flood insurance. If the mortgage company 'spams' out this message to all their loans, what risk is it to them? Flood insurance in low-risk areas is very cheap and some people will pay it w/o question, and you are now placed in the position of having to 'defend' whether your property is in a flood plain or not (as opposed to the mortgage company having to prove one way or the other).

iceshots · 12-03-2008, 11:09 AM

Are you sure this letter is from your mortgage company? Since closing on our house last month we have been inundated with letters for mortgage life insurance that look like they came from the bank. The only company referred to in the letter is the bank as the lender, but reading the fine print shows that the company sending the letter is NOT affiliated with the bank.

We also received a letter asking if we wanted to go to bi-weekly or weekly mortgage payments to reduce the payout time of the mortgage and save interest. This was very logical and I referred to the letter when setting up payment options at the bank. It turns out they DID NOT send the letter and it was from some third party company that would have handled these transactions for me.

Read the letter closely to determine if your lender did send it, and follow up with them verbally to understand why they are now requiring the flood insurance.

mhudson78641 · 12-03-2008, 11:16 AM

City of Austin - Flood :: New Floodplain Maps

http://www.roundrocktexas.gov/home/index.asp?page=852

I wonder if this is the reason. I noticed after I posted the Ausitn link that you are in Round Rock.

hound 109 · 12-03-2008, 12:59 PM

Quote:

Originally Posted by mhudson78660

City of Austin - Flood :: New Floodplain Maps

City of Round Rock - Floodplain

I wonder if this is the reason. I noticed after I posted the Ausitn link that you are in Round Rock.

This is very interesting information. It looks like new maps came out in Sept. (after your June purchase)

As the person mentioned above....there's no way that you would have closed without a "flood certificate" that states that Yes you are....or NO you aren't in the flood plain. It had to have been addressed at closing (unless you paid cash). I would call the title company & ask your closer for the document if you can't find it.

Also....Did your realtor have a comment regarding a flood plain in RR? (& why or why not?)

I know that in New Braunfels new maps were created this year (as well) that put hundreds of homes in a NEW floodplain....including all the folks who flooded in the 500 YEAR Floodplain......twice in 4 years. But this was HEAVILY advertised (discussed) in the little local paper.

Any of you Round Rockers know of any discussion regarding this new FP that went on in any "local" papers or newsletters? I'd have to believe there was.

austin62006 · 12-03-2008, 01:30 PM

i work in the flood industry where abouts is your house i can check to see if you are indeed in a floodzone.

austin62006 · 12-03-2008, 01:55 PM

After just checking out the flood maps it looks like there is quite a bit of flooding in forest creek along twin ridge parkway and up by county rd 123. Some other parts have flooding too but again im not sure where you're located. Pretty much all of Travis and Williamson county were revised 9/26/08 by FEMA.