Texas Homeowner: Updated Flood-Plain Maps, Retroactively Charged Force-Placed Insurance Leave Me Facing Foreclosure

In Waco, Texas, the Waco Tribune Herald reports:

• The Federal Emergency Management Agency’s policy requiring flood insurance in flood plains is meant to protect life and property. But in East Waco, it may cost a single mom her home. Charrie Rollins, 36, is facing foreclosure on the $81,000 brick home she bought three years ago [...]. She says she has fallen behind on her payments because she can’t afford the flood insurance her lender began requiring after FEMA determined last summer that her home was in a flood plain. FEMA last September reclassified the area [within which her home sits] to be in the 100-year flood plain, which means it has a 1 percent chance of flooding in a given year. The area [...] includes more than 30 small homes as well as Toliver Chapel Baptist Church.

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• Rollins said that requirement set in motion a vicious cycle that has left her $2,600 behind on her payments to her mortgage company, even though she has continued to pay her customary principal and interest payment of $459 a month.

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• Rollins said that after learning she was in a flood plain she attempted to get private flood insurance but did not have it as of May.(1) That month, Rollins’ mortgage company created an escrow and force-placed the flood insurance policy on her at a rate of $158 a month, her paperwork shows. [...] Rollins’ lender, American Home Mortgage Servicing Inc., of Irving, Texas, could not be reached to verify her claims that she was retroactively charged for flood insurance.

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• [Local NeighborWorks' housing counselor Reuben] Andrade said Rollins’ situation is a “strange case,” but other mortgage holders may be affected too. “It’s really been a hassle and a mess,” he said. “In all honesty, I wouldn’t be surprised if there are others who still have mortgages who are accumulating debt from force-placed insurance.”

For more, see Waco woman may lose home after FEMA rules she lives in a flood plain.

In a related story, see KXXV-TV Channel 25: East Waco homes under new flood plane; FEMA says way to lower costs of insurance (A dramatic change could put Waco homeowners at risk of foreclosure. F.E.M.A has redesigned their flood plane, which now effects many homes in East Waco, adding extra monthly costs of flood insurance.).

(1) Rollins was urged to purchase her own flood insurance policy, which she was told costs about a third as much as the force-placed insurance. But she said no local companies will sell her the insurance without getting an engineer to study the house and write a certificate of elevation, which costs about $600. County Commissioner Lester Gibson, who heard about Rollins’ plight from a pastor, raised the funds for the certificate at a recent meeting of his weekly public-affairs forum. Last week, she hired the engineer and is waiting for the certificate.