December 19,2013
MUNCY — You could hear the emotion in Jeff Waltman’s voice as he discussed the last three months and the possibility he may lose his home in the wake of the enactment of the Biggert-Waters Act.
Waltman and his wife recently purchased a home in Muncy, having been told that their flood insurance would be around $592 per year, then realizing that thanks to Biggert-Waters, that premium now comes with a $1,000 deductible and annual costs of $8,348 to $9,069.
“How could this happen?” he pleaded with Congressman Tom Marino (R-Pa. 10), at a meeting Wednesday at Muncy Bank and Trust. “My anger is indescribable.”
No one mentioned Biggert-Waters when the couple purchased the home, nor when they were told the initial costs associated with insurance.
“Since 1978 there have been no (flood) claims on the property. Before this, I wasn’t political. Now this forces me, and makes me want to know and learn about everything.”
Tom Rishel, also of Muncy, owns a business and rental properties in the borough, none of which have flooded since 1972, but will now be tagged with premiums he admits he can’t afford, also north of $9,000 each.
Should Biggert-Waters go forward, he said, those homes may be boarded up.
“I can’t pay that much on a rental property,” he told Marino. “Over 45 years, I’ve been buying property. That’s my retirement. I can’t work 20 years and draw a pension.
“I hope the government can help the banks out — they’ll get stuck with more houses than they can believe. Nobody will buy them.”
Dan Berninger, CEO of Muncy Bank and Trust, noted that 40 percent of the borough of Muncy is in the flood plain. Around 220 properties are in that area as well.
“It’s going to have a pretty disastrous effect on people,” said Berninger. “If they haven’t realized it yet, they will soon.”
Biggert-Waters was signed into law in 2012 as the National Flood Insurance Program had fallen some $24 billion in debt, passing the House and Senate (Marino voted for it) with overwhelming support. With it comes changes to grandfathered subsidies associated with flood insurance, dating back to the 1960s as well as reforms to who pays for insurance.
At the time, there was no indication that premiums would skyrocket the way they have since. For those who purchased homes beyond July 6, 2012, sticker shock may set in as they will be paying “actuarial” flood rates.
For those with second homes in flood plains, premiums have already risen. Subsidies will no longer be available for policies covering newly purchased properties, lapsed policies or new policies covering properties for the first time.
Marino said he is pushing to delay the implementation of the act. He would like more accurate information while granting homeowners and businesses additional time and security in knowing they are not in danger of losing their homes.
“I’m in a battle in D.C. with opposition on this,” said Marino. “This is one of those issues I equate to the housing bubble. What are they going to do, take your house from you? What are they going to do with it?”
That is the fear with Biggert-Waters. Homes with high premiums will not be maintained and, in turn, will not be able to be sold due to the costs.
“We’re going to address this as soon as we get back on (Jan. 6),” said Marino. “If we do not delay this, someone is going to get burnt — the lending institutions, homeowners.”
It goes even deeper. If nothing is done and properties are vacated, there’s lost tax revenue that will be absorbed by the remaining residents. It’s an issue that effects every corner of the country.
Marino said in addition to putting the act on hold, he’d like to see the federal government get out of the business of subsidizing insurance companies and also encourage buyouts.
Those who decline buyouts can take money every time there’s a disaster and keep improving their homes. It’s a drain on taxpayers, he said.
“There’s no 100 percent cure no matter what we do,” he said.
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