For more on this story, read: $1,453 Refunded for FEMA Mistake (23 July 2010) on San Jose Metblogs.
Tomorrow, we are mailing the final letter in an absurd and expensive year-long adventure in bureaucracy. On 7 July 2009, my husband and I received a letter from our mortgage holder that FEMA (the U.S. Federal Emergency Management Agency) had changed their FIRM (Flood Insurance Rate Map) such that our house was now in a high-risk SFHA (Special Flood Hazard Area). We were now required to buy annual flood insurance for the life of our mortgage loan because of FEMA’s map change.
Our house was built around 1930 next to the Guadalupe River, also known as the Lewis Canal in what is now San Jose, California. The Lewis Canal is named after its engineer, Frank Lewis (who was husband to Martha “Patty” Reed Lewis of the Donner Party). The canal was built about a hundred years ago. The property line behind our house runs down the middle of the river and includes a steep embankment that rises five feet above ground level and then drops twenty feet to the river water.
How did the FEMA map of a hundred-year-old canal and eighty-year-old house change? FEMA maps used to be drawn on a plain background. Some clever person decided to take the old maps (as is – with no change) and superimpose the lines on a background of satellite photos. The resolution of the original map and the satellite map were different. The old map was drawn on square grids and the satellite photos were taken with a round lens – so there was some mismatch and alignment error. A flat picture of the round Earth will always have such errors.
The creation of the new map caused the mortgage company’s flood area determination company (LPS National Flood) to review the situation of the mortgaged properties which might be effected. Although FEMA’s new FIRM did not include any new information with regard to the relative location of our house and the river, the new picture’s misalignment appeared to make the line indicating our house touch the line of the river. That our house is ten feet from the edge of the embankment’s retaining wall did not matter. Taking the most conservative approach, the mortgage company now required us starting immediately to pay $1,453 annually for flood insurance for the duration of the mortgage.
We talked with our mortgage company with no good results. We contacted FEMA with no good results. We contacted LPS National Flood with no good results. We talked with the insurance company with no good results. Everyone said that even though the new map did not correctly reflect the physical circumstances of our house and the river, the mortgage company could require us to buy flood insurance in perpetuity based on the map. We signed up for flood insurance and continued to fight. We eventually hired J.P. Tanner of Scotts Valley to work with FEMA to correct their map. We learned in the process that hundreds of other home owners along the river were in the same bureaucratic map-insurance mess as we were. Eventually, in April 2010, FEMA issued a LOMA (Letter of Map Amendment) formally removing our house from the flood zone.
Once we had the LOMA in hand, we had to convince the mortgage company and the insurance company to withdraw their requirement for flood insurance. I had to send them the LOMA several times but, as of the letter we received this week, we are finally being allowed to cancel our flood insurance. We hope to get a full refund for the 2009 flood insurance fee which we were required to pay because of the map error. Halleluja!
Of course, two days after the mortgage company sent us the letter saying we did not have to pay for flood insurance, the same company sent us a separate letter saying that our hazard insurance had expired:
“If we do not receive evidence of continuous hazard insurance coverage, it will be necessary for us to secure coverage to protect your interest at your expense. The cost of such insurance may be substantially higher that the amount you would normally pay for hazard insurance coverage. Affiliates of PNC Mortgage may earn commissions or income in conjunction with the placement of this coverage…”
Sigh.
Guadalupe River Pictures
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Pictures Copyright 2010 Katy Dickinson
KatysBlog 
I’ve just read your blog and see that PNC is still up to this money making adventure in ripping off customers. I purchased my home in June 2003 and voluntarily purchased flood insurance as I’m a licensed insurance agent realized the value of carrying a policy for peace of mind. My home when purchased and is currently per the FEMA online map a zone “X” in which I am not required to carry coverage. Purchasing the coverage in this zone voluntarily provides me with a “preferred” policy as a reduced rate. Last month I rec’d a letter from PNC Mortgage advising they’d determined that my home should be a zone AE (special hazard flood zone) and that I was required to not only purchase a policy (that I already have) but must secure an excess flood
policy for 100% of the replacement value of the home (that they have determined, even though it is $100,000 over the owed loan value) and at a limit that I could not even sell my home including the land for.
I’ve done further research and have found there is a a federal bureau to file complaints against mortgage carriers and I fully intend to do so.
If I am still forced to pay for a flood policy conversion from Preferred to standard and to secure the dreaded & very expensive excess policy, I will do so in full out of pocket. It seems that the mortgage carriers ploy is to earn interest on the escrow premiums and to recoup any bad debt they’ve incurred by bleeding the homeowners who’ve been fortunate enough to still be in their homes. And our tax dollars are going to FEMA for…..?
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I recognize the date is 2010, but if you are still in the SFHA, you may have paid way too much over that time. I work for a land surveyor and we do Elevation Certificates and Letters of Map Amendment. Elevation Certificate provides insurance company data to compare to determne the required rate. There are a couple of built in errors in the system software, so get the right surveyor to fight for you. Jim is good, but we may be better. The LOMA, if it shows that your home really is not in a channel when the map says “100 year flood water contained in channel”, or that the property is touched by the flood zone, but the house is not touched, or the house is high enough to be not touched by the 100 year flood water elevation, or ……then policy holder can get a refund on the current year’s premiums if they follow an effective process. Under some cases where the home was, according to what is actually on the map, was rated incorrectly, then up to 6 years may be refunded if handled correctly..