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National Flood Insurance Program Deadline Friday With Extension Split Between House, Senate
Will the National Flood Insurance Program stay the way it is or will it go toward reforming some measures to better suit the market? The political clash between the Senate and House over the NFIP has become a broken record of sorts with four extensions in the last four months including this Friday´s impending deadline.
Since the November 18th deadline and PFI´s last blog update, the Senate passed S. 1958 to extend the NFIP through May 31, 2012. According to a recent article from the National Association of Realtors, the NFIP remains mired in “election year politics between Senate leaders” including a “laundry list” of year-end measures such as payroll tax holiday and an extension of unemployment benefits.
In turn, the House packaged a five year extension of the NFIP into a deal that also would support extending expiring tax cuts desired by House Republicans and an extension of jobless benefits for the long-term employed. By packaging the NFIP with the tax cuts, the White House pledged a veto of this measure and the Senate also stated it would not approve the bill, according to a recent article from PropertyCasualty360.com.
If a NFIP lapse does occur, the housing market would see additional strain as homeowners and buyers in FEMA-designated flood zones are legally obligated to have flood insurance to qualify for a federally backed mortgage. In 2010, 47,000 home sales were delayed or canceled when the NFIP lapsed for 53 days in 2010 according to the National Association of Realtors. An estimated 20,000 communities across the United States would be affected if a lapse occurs after this deadline.