We discussed with the representative the fact that FEMA lists flood determination companies on their website; and that these mortgage lenders, realtors and appraisers use these same companies via cheap online determinations which make reference to FEMA Firm Map Panels.
I went on to explain to him that our concern is the fact that by using a zoom in/out feature and leaving the process of the flood determinations in the hands of those who ultimately make a financial profit upon the successful close of the real estate transaction (as in our case) leaves the buyer's subject to potential deception and fraud through inaccurate determinations. An example is the difference between the determination obtained by Chase Home Finance in 2008, a year after escrow closed; and the determination obtained by the Appraisal Company picked by our mortgage broker during escrow.
All of the sudden the lights went on and the representative said "Well that sounds like fraud!" With a sigh of relief my husband and I finally felt that someone was "getting it."
We were asked if we would send over the flood designation timeline scenario and supporting documentation for the Senator's office to present to FEMA, and within about 24 hours it was done! The contents of our email is noted below with some personal redaction and/or abbreviations made.
Nonetheless, as has been the case over the past three years; we would once again find yet another entity respond with a brush off. The reality here is simply that the federal government mandates flood insurance from homeowners while failing to implement any oversight or accountability to those agencies that are making the determinations; even though ALL of these agencies reference a FEMA Firm Map panel to support and justify their determinations.
Here is the bureaucratic response we received from FEMA. I don't have the ability to scan this right now so I will type, verbatim (excluding header logo):
August 22, 2011
The Honorable John Cornyn
United States Senator
Providence Towers
5001 Spring Valley Road, Suite 1125E
Dear Senator Cornyn:
Thank you for your August 4, 2011 inquiry on behalf of your constituents, Michael and Annette Daniel. In correspondence to you, Mr. and Mrs. Daniel asked if the Federal Emergency Management Agency (FEMA) had any jurisdiction over flood determinations and flood determination companies.
The Federal Emergency Management Agency (FEMA), according to federal law and regulation, has no regulatory authority or any jurisdiction over private flood determination companies. The growth of flood determination companies and the service that they provide grew from the requirement that lenders are to determine if a structure/collateral is located within a Special Flood Hazard Area (SFHA.) If the determination places the structure in the SFHA, then flood insurance is required as a part of the loan requirements. The burden to accomplish the determination was placed on the lender. Many lenders today contract with flood determination companies to provide this service. FEMA has placed the list of flood determinations companies strictly as an informational source to citizens, lenders, insurance agents and realtors.
We hope that this information is helpful to you in addressing Mr. and Mrs. Daniel's question.
Sincerely,
Philip Beasley, Director
External Affairs
I guess it's kind of like telling us that they aren't legally married, just having an affair. You know..."Your links can sleep in our bed and our Firm maps can sleep in yours; we just don't want any real commitment."
I have a new question for FEMA;
What happens to those unsuspecting victims of mortgage / real estate fraud, such as us; who unknowingly purchase a home in a flood zone? Those who have a flood determination stating "IS BUILDING / MOBILE HOME IN A SPECIAL FLOOD HAZARD AREA(ZONES CONTAINING THE LETTERS "A" OR "V")?... NO"; and have a formal HUD "Flood Certification" asserting that the house is "Not in any Special~Hazard Flood Area."
Is FEMA going to deny them assistance in a natural disaster flood?
The bottom line here is that FEMA did not directly address our concern of abuse of FEMA Firms being used to endorse the determination companies findings. Our concern includes the fact that these flood determinations have a section which makes reference to a FEMA Firm Map Panel number specific to a property/area. The use of such infers that FEMA's data is "supporting" and/or "authenticating" the results of the determination. If you are going to allow the use of a FEMA reference then shouldn't you be overseeing the ethics and validity of those using such to determine whether there is a misuse in their findings? Does FEMA make any money off of these flood determinations i.e. registration fees paid for listing them on their website?
Our HUD statement notes that we were charged $25 for a flood determination that lied. A determination process that is subject to human error; and apparently in our case to the unethical manipulation of misinformation used in order to move our house out of a flood zone. Of course, that would only last for approximately one year until the next flood determination was initiated by those who weren't trying to make commission on the "sell" of a house.
DATA PROVIDED TO FEMA:
HISTORY OF FEMA FIRMS
FLOOD DETERMINATIONS DURING ESCROW
Property Located in “100 Year Flood Plain”
Special Flood Hazard Zone (Zone A)
Parker County requires “Flood Permit” and issues one for $50.00 without required flood study done and Base Flood Elevations (BFE) determined. To date, there is still no legal and/or completed elevation certificate issued on this property.
See attachments:
· 001 – 1997 FEMA Firm
· 002 – DKB Surveyor recorded plat for Reata Estates
o See note on “Flood Plain Restrictions”
· 003 – Parker County “Food Permit” and incomplete elevation certificate.
· 004 – Email correspondence with Parker County Flood Plain Administrator, KF. Mr. F testified in trial. Mr. F was the first person to bring to our attention the issue of the elevations not being correct and the certificate incomplete. He provided us with the attached. Original engineer has nothing to provide to us from files per surveyor. County turned a blind eye with a house built on a designated drainage easement in a flood zone!
08/21/1998 – Original survey of property
· 021 – Survey showing “proposed easement” going around house.
· According to surveyor, DKB Associates; the proposed easement was denied by Parker County Commissioner. Still, sellers’ Realtors provide unrecorded “Release of Easement” during escrow.
· KF, Parker County Flood Plain Administrator whose signature appears on this document testified during trial that the “release of easement” was not recorded, nor was it related to our property or the drainage easement under our house.
04/28/2003 – 2nd Survey done on property during sellers’ refinancing in 2003.
· Notes drainage easement was never moved.
· Not provided to us by Realtor. Only the 1998 survey was sent with proposed easement and unrecorded “release of easement.”
· We were asked to go with a “recent” survey in lieu of procuring a new survey which may have impacted escrow timelines. We were told newer survey was recent enough and no changes to property (i.e. fence/property lines, improvements/buildings, etc.)
9/05/2007 - Email of warning from potential buyer’s Realtor to sellers’ Realtors regarding “non-disclosure” and potential lawsuit by next buyers.
See attachments:
· 020 – Email dated September 5, 2007
o Potential buyer just happened to be a local “engineer”.
o Email was sent to sellers’ Realtors just days before we put an offer on the property, September 11, 2007.
o Author of the email was deposed.
9/13/2007 – LANDSAFE FLOOD DETERMINATION
IN A FLOOD; IN FLOOD ZONE A
WRS Mortgage does first flood determination on property which comes back “in flood zone A” and apparently notifies buyers’ Realtor, who in turn goes to sellers’ Realtors looking for something that will show house is not in flood zone.
See attachments:
· 005 – Landsafe Flood Determination dated 9/13/2007
9/17/2007 – Email correspondence from sellers’ Realtor to Title Escrow Officer
See attachments:
· 015 – Email dated 9/17/2007
o Email acknowledges property is in flood zone
o Email acknowledges drainage easement concern
o Email is copied to Realtor’s partner who is the actual listing agent.
o Neither produce email during litigation discovery. Email shows up approximately 9 months after their depositions are taken in a subpoena to title company.
9/17/2007 – FIS FLOOD DETERMINATION
NOT IN A FLOOD ZONE, IN ZONE X
RM (son-in-law of seller brokerage firm owners [names redacted]) is asked to do a favor by sellers’ Realtors who are the #1 top producing agents C21 and in Parker County for several years. RM is asked to acquire a “fix it” flood determination; and does so using the sellers’ old mortgage account information without the sellers’ knowledge and/or permission per sellers’ deposition. According to FIS attorney (now LPS National Flood) FIS determination was done “manually.’
See attachments:
· 006 – FIS Flood Determination dated 9/17/2007
9/18/2007 – FIRST AMERICAN FLOOD DETERMINATION
NOT IN A FLOOD ZONE, IN ZONE X
WRS obtains this second flood determination after being provided with a copy of the FIS Determination using our mortgage information in order to satisfy escrow process using our loan information. FIS has sellers’ loan information on it.
See attachments:
· 007 – First American Flood Data determination dated 9/18/2007
o This was provided to us for the first time via Chase Legal Dept. in February 2009.
o According to Rod Reuscher, Chase Home Finance; the file included HUD Flood Certification and copy of First American Flood Data determination, both stating “NOT” in a flood zone. Chase was never provided or made privy of the Landsafe Flood Determination dated 9/13/2007 which truthfully determined the house and property in Flood Zone A.
· 008 - Note that the HUD documents statement notes the Landsafe Flood Determination when that determination was tossed and replaced with the First American Flood Data
· 009 – HUD Document “Flood Certification”; Not in a flood zone.
9/26/2007 – Fax from Title Escrow Officer to Surveyor
See attachments:
· 016 & 017 – Fax requesting surveyor to “order a legal on drainage easement” per Sellers’ Realtor. However, the sellers’ Realtors had already produced an alleged “Release of Easement” to satisfy mortgage lending process.
· 018 – Title officer’s fax requesting a legal on the drainage easement is dated and sent 13 days after the unrecorded “Release of Easement” has already passed through our Realtor to the mortgage broker.
o KF, Parker County Flood Plain Administrator whose signature appears on this document testified during trial that the easement was not recorded, nor was it related to our property or the drainage easement under our house. KF was not the flood plain administrator at that time, PTN was.
10/16/2007 – INTRA FLOOD SERVICES
NOT IN A FLOOD ZONE, IN ZONE X
Part of the “Performance Appraisals” appraisal of the house done on behalf of WRS. Appraisal done not using comps of homes built on designated drainage easement and in flood zone A.
See attachments:
· 010 – Appraisal dated 10/16/2007
05/06/2008 – DE Engineering Flood Study of Devon Well-site
DE was requested to do a flood study on the well pad site behind us as a result of flash flooding on our property during a storm on April 17, 2008.
See attachments:
· 011 – DE flood study report dated 05/20/2008
· 012 – DE overlay of FEMA Firm maps showing flood characteristics of 127 Rodeo Drive.
09/26/08 - FEMA Firm Map panel number 48367C0325E
Property Located in “100 Year Flood Plain”
Special Flood Hazard Zone (Zone A)
See attachments:
· 013 – FEMA Firm panel dated 09-26-2008 (Note second panel has a red square where property sits.
09/26/2008 – QUANTRIX, LLC
IN A FLOOD; IN FLOOD ZONE A
Quant Appraisals (On behalf of Chase Home Finance)
See attachments:
· 013 – FEMA Firm panel dated 09-26-2008
o Note second panel has a red square where property is located.
IN CLOSING:
FEMA has a page on their website where they list these determination companies with link or contact information. (Click here.) Although they state they do not endorse them, they refer to them and do mandate that determinations be done in order to enforce the “National Flood Insurance Program” or NFIP. (Click here for info on the NFIP.)
Attached is item #015 which is a letter that was sent from “in-house” legal counsel for Landsafe Flood Determinations to our attorney. We non-suited Landsafe because their determination was finally produced and found to be the only one that accurately portrayed the flood determination of our property. I only share this because it may shed some light on the federal and state regulations.
