NAR: Flood Insurance Extension Needed
A long-term extension of the National Flood Insurance Program (NFIP) before the current temporary extension expires on May 31 is critical to provide certainty and avoid further disruptions in real estate markets, NAR says. NAR President Moe Veissi testified before the Senate Banking Subcommittee on Economic Policy about the need for long-term NFIP reauthorization and reform. For some time now, Congress has been approving short-term extensions of the NFIP authority to issue flood insurance policies while debate continues over comprehensive reforms to the program. Since 2008, there have been 17 short-term extensions and twice authority has been allowed to expire, delaying or cancelling 1,300 real estate transactions each day, according to NAR research. During the most recent lapse in June 2010, NAR survey data estimate that more than 40,000 home sales were stalled. The short-term extensions and shutdowns have exacerbated uncertainty in real estate markets and are inhibiting long-term investments that are vital to the U.S. economic recovery, said Veissi.
On July 12, 2011, by a 406-22 vote, the U.S. House of Representative passed the Flood Insurance Reform Act, H.R. 1309, to extend and strengthen the NFIP through 2016. Separately, on September 8, 2011, the U.S. Senate Banking Committee approved its version of the Flood Insurance Reform Act. Similar to the House bill, it includes a 5-year extension, as well as premium-rate and flood-mapping reforms that would ensure the NFIP's long-term continuation. Unfortunately, the legislation has stalled in the Senate, and a few differences that exist between the House-passed bill and the Senate measure would have to be reconciled by a conference committee before a bill may become law.