CAMDEN COUNTY, Mo. — Lakefront property owners across Camden County have been receiving letters from their lenders saying they must purchase flood insurance, and Presiding Commissioner Greg is sounding the alarm.
“I don’t know whether it’s a scam or a mistake, but it’s wrong,” he told LakeExpo.com. Camden Planning & Zoning Administrator Tanna Wirtz says the county has reached out to FEMA and the state of Missouri, to try and figure out what has happened, and quickly resolve it.
The lender letters were likely triggered by new Federal Emergency Management Agency (FEMA) floodplain maps that were recently redrawn and released for Camden County. Those maps should have actually improved the situation for many local property owners, because FEMA lowered the base flood elevation in many areas, effectively bringing hundreds of homes and businesses out of the floodplain, and removing their need to purchase flood insurance. That was the right move, Hasty says. He owns a surveying company in Camden County, so Hasty was intimately familiar with the problem of poorly drawn FEMA floodplain lines, and he considers the new FEMA floodplain elevations to be one of his most important accomplishments since he took office.
But there’s a problem: Hasty explains that the on-paper, documented base flood elevations newly set by FEMA are correct, but often the FEMA maps do not accurately reflect which properties are inside or outside of the floodplain. Hence the current confusion. Hundreds, or thousands, of county landowners have begun receiving notices from their lenders—who typically hire a third party company to assess whether certain properties are within a floodplain. Those notices claim local property owners’ parcels are inside a floodplain and so they must buy flood insurance. The notices come with a completed FEMA Form 086-0-32.
Many of these landowners are no longer in a floodplain, though—or they never were. But now that lenders are being notified with this incorrect determination, Hasty says lenders will point to these (potentially inaccurate) determinations, with demands that the landowner either purchase flood insurance or the lender will buy it for them (likely at a noncompetitive rate). Borrowers typically have 45 days from the time of the notice to line up flood insurance.
The confusion has been throwing a temporary wrench in real estate closings, says Hasty. He has heard from realtors who confirm the concern about a flood insurance requirement (which could cost thousands per year, depending on the situation) has kept multiple buyers from pulling the trigger.
Wirtz said while the situation is being investigated, property owners have options. But, no matter what, she said, “Don’t panic!” She also reiterated that the maps on the county’s website are only to be used as a reference, and may not always perfectly depict floodplain lines. Those lines are generated via aerial imaging, she explained, and based on the angle of the photographs, they may not be 100% accurate in every place. The same could be true for the FEMA maps. In one example, the FEMA map—known as a Flood Insurance Rate Map (FIRM)—shows the floodplain line cutting right through the middle of a condominium on the Lake of the Ozarks’ Niangua Arm, even though Hasty says that condominium’s lowest elevation is above the new FEMA base flood elevation at that location. In other words, the FEMA map image shows the condo is in a floodplain (with a blue line and shading), but the condo’s certified Elevation Certificate alongside FEMA’s new base flood elevation levels prove that it is not. For example:
A FEMA map expert who wished to remain anonymous told LakeExpo.com that lending companies typically do hire third-party companies to analyze the properties in their portfolio, but those companies don’t usually do in-depth analysis. They may rely on FEMA’s FIRM maps (example pictured above) to flag properties as being required to have flood insurance… even if the maps are depicting the floodplain incorrectly, according to the expert. He said that determination can still be used as legal justification to compel a property owner to purchase flood insurance, and at that point, the only recourse is to obtain a LOMA/LOMC.
Wirtz’s advice to property owners is below…
Here’s What Property Owners Need To Know, And What They Can Do:
-If you weren’t in a floodplain before, you almost definitely are not in one now. And if you’ve not received a letter from your lender, then head outside and enjoy the view of the Lake: you don’t have to do anything!
-“If anyone had a Letter Of Map Amendment (LOMA) [aka Letter Of Map Change (LOMC)], then they are valid… if they were out of the floodplain [before], then they are definitely out of the floodplain now.”
-If you’ve received a letter from your lender demanding you buy flood insurance, send the lender a copy of your LOMA/LOMC. “Done deal,” she said.
-If you formerly got a LOMA/LOMC, but do not have a copy, then the county planning & zoning office can help you locate it. However, Wirtz says that process is difficult and may not be necessary, if the state/FEMA investigation resolves this first.
-If your property never had a LOMA/LOMC—perhaps because you were previously in a floodplain, but now are not… but you still received a letter from your lender—then you could obtain a LOMA/LOMC. But Wirtz says that, too, might not be necessary, if the state/FEMA investigation shows this all to be one big mistake.
-For property owners set on obtaining a LOMA/LOMC, they’ll need to get ready to pay a surveyor to generate an Elevation Certificate. Then they can visit this site to begin the process: https://hazards.fema.gov/femaportal/onlinelomc/signin
This situation is rapidly changing, as the state and FEMA investigate.
Copied from: lakeexpo.com