Flood insurance program could end this month

Real estate transactions on properties along the Little Calumet River Basin in Northwest Indiana could fail or lapse without the reauthorization of the National Flood Insurance Program, local Realtors warn.

The NFIP is set to expire Friday unless Congress is able to reach a decision on an extension.

"Without the reauthorization of the NFIP, even when buyers want to buy, sellers want to sell and lenders want to lend, the loan cannot be processed," said Pat Pullara, chief operation officer of the Greater Indiana Association of Realtors.

Pullara said it is imperative homeowners contact their elected officials and tell them the NFIP needs to be extended for five years, not for a month or two at a time.

Pullara said millions of taxpayers rely on the NFIP for flood protection and that floods claimed more lives and property than any other natural disaster in the U.S. in the last century.

Unable to ignore the rising cost to taxpayers of post-disaster payments for uninsured properties or the lack of a private market for flood insurance, Congress created the NFIP in 1968.

Today, 5.6 million property owners rely on the program in 21,000 communities where flood insurance is required for federally related mortgages.

Indiana Realtor Steve Cardwell, who is affiliated with Keller Williams Realty Leaders in Valparaiso, said he had a "frustrating" situation recently regarding this issue. Representing a local seller, the deal was "all set to go" until the quandary of the flood insurance.

"Even though the insurance is provided by a private carrier, it's underwritten by the federal government so consequently you can't just go around and find it on your own," he said. "All the insurance carriers are basically in the same position.

Cardwell wrote in a blog post at www.welcomehomenwi.com that according to the National Association of Realtors about 1,300 new transactions per day are currently on hold because the deals cannot close without the properties being insured.

For more information, visit www.floodsmart.gov/floodsmart.