Here is the April 18, 2008 revision of original 6/27/07 story which appeared in the print version of The Hub (FreshInk's predecessor):
Big Mortgage determines families have to pay flood insurance even though their houses have always been outside the flood zone... could this happen to you?
In the fall of 2005, two months after Katrina, a family's house in downtown Colorado Springs was declared to be in a 100-year flood zone by their mortgage company (World Savings at the time, then Wachovia, now Wells Fargo), who then demanded expensive flood insurance. They had lived in the house 13 years without flood insurance and were 3 1/2 years into their mortgage agreement.
The family requested proof that their house had been moved into the 100-year flood zone. The FEMA flood insurance rate maps (FIRMs) do not depict building/flood zone relationships. A satellite photo was provided by Wachovia with a FIRM overlaid by hand with legal text that says it "should not be relied upon" and "is not intended to satisfy any regulatory guidelines". Five of these "unreliable" maps were provided over time, each with different positioning of the FIRM (which may constitute intentional criminal fraud).
Since the mortgage company could not provide a legal, authoritative map, the original engineering map (showing houses and other structures related to the flood zone) and paper-trail sign off were located. These maps provide two important facts: 1) Current revisions and previous revisions do not affect the house in question. 2) The house is clearly outside the 100 year flood zone and, not insignificantly, abuts the 500-year flood zone.
At Michael Baker (the engineering firm to which FEMA outsources determinations), three flood engineers stated for the record in a conference that the base flood elevation (BFE) is 16 feet above the streambed, and that if a certified survey were done proving the property above that elevation, FEMA would declare the house "out as shown" on the maps. Four hundred dollars was spend on a certified survey to confirm the minimum elevation on the property was a foot above the 16 foot BFE. The city utility map with elevation contours also confirms the house at this elevation. When this information was presented to FEMA for an "out as shown" determination, the Michael Baker engineers changed their minds about the BFE, moving the bar up to 18.7 feet above the streambed.
The house is 120 years old and has never flooded. There has never been any water damage to the original fir floors and there are no water marks inside the original lathe-and-plaster walls. The dirt floor in the crawl space is powdery and there are no indications of there ever being any water damage, water flow or subsequent drying of mud. Some neighbors in 1964 experienced a "500-year flood" in which homes along Shooks Run were wiped out and a railroad bridge downstream was washed away with several fully loaded coal cars on it: the coal cars were never found. In an eyewitness account of that horrendous deluge, the house in question was not flooded. What Wachovia is attempting is akin to redefining the sky as green.
Amazingly, an ELOC was taken out and the new lender agreed to sign the contract contingent on a determination of "out as shown" on the FEMA maps. The resulting FEMA/Homeland Security documentation was presented to FEMA who agreed in writing that it "fulfills the audit requirements" of that lender. FEMA did not dispute the determination. In a recent conversation on the record, a FEMA representative stated "it is possible that there are conflicting results. It just depends on their interpreting the map, because the map’s not property-specific, it doesn’t show property lines, nor does it show elevations."
Casey Fults, a Wachovia spokesperson, stated in writing that the FEMA guidelines are: “until a map is physically amended or revised, lenders are bound by the information shown on FEMA maps”. When confronted with the facts regarding FEMA maps, FEMA's acceptance of other "out as shown" determinations and FEMA's assertion that different interpretations are acceptable, she repeated a well-worn mantra that Wachovia only accepts a Letter of Map Ammendment (LOMA) and that this is Wachovia's "policy". This puts the homeowners in an impossible position. The existing FEMA maps don't need to be ammended because they show the property out of the flood zone and FEMA accepts those determinations. But a LOMA would put the house in the flood zone because the Michael Baker company has arbitrarily raised the bar.
The situation takes on a sinister tone when timing and money trail are considered. After Katrina, suddenly fixed-income retirees are paying hundreds or thousands of additional dollars per year for "flood insurance" without legal proof that their houses have been moved into the flood zone. Dan Carlson, a regional FEMA representative, confirmed that FEMA receives 66% of flood insurance money. What's truly amazing is that FEMA is OK with a "gray area" determination as long as there's proof but Wachovia doggedly refuses to deviate from their inhouse "policy",.
Summary: There are six sources of authoritative scientific/engineering proof and historic proof that this family's home is not in the 100-year flood zone while the mortgage company has only "unreliable" satellite photo maps to force payment of thousands of dollars of "flood" insurance. The family has refused to pay for flood insurance and Wachovia has threatened them many times with foreclosure and made negative credit reports that they are late paying their mortgage. This could happen to you and your family, too.
All attorneys who have been contacted have declined involvement because of the scope of the case (Big Mortgage). Because the family can't afford a lawyer, legal work would have to be done on a contingency basis. The family has tried to resolve the situation through the Better Business Bureau, AARP's fraud prevention office, their congressman, and privately-underwritten mortgage loans which don't require flood insurance.
Any agency placing a monetary claim should have to prove their claim, not the other way around.
3/16/2010 Update. Our El Paso County Civil Court case was heard on February 4, 2010. The judge's verdict was that our lender is required to take flood insurance money from our escrow account because of the text of the NFIP. Also included in the verdict, though, was the determination that the 2004 flood map has errors.
FEMA issued a new LOMR dated 3/3/10 (case 10-08-0382P) that states that the 2004 Shooks Run LOMR "never became effective" because no public notice ever appeared in the Gazette regarding the revisions. Federal law requires public notice twice in the local newspaper and in the Federal Register.
Today we received notification that our request to retry the case because the LOMR "never became effective" was denied. We will appeal, all the way to the Supreme Court if necessary. All we want is for our lender to return the "flood insurance" money taken from our escrow account, with interest and late fees, and withdraw their false "late payment" claims to credit agencies, because we have actually been overpaying our mortgage.
On 1/13/10, we initiated a Government Accountability Office/Department of Homeland Security investigation into the conflict of interest aspect of FEMA's receipt of money based on bad maps, and into predatory lenders taking advantage of those bad maps.
3/29/10 Update. Wachovia has
finally acknowledged that the 2004 FEMA flood map "never became effective" (quoting FEMA). Even though the flood zone conditions have reverted back to 1997, and two signed contracts stipulate the house is out of the flood zone,
and Wachovia's lawyers stipulated that our house was outside the flood zone before 2004, Wachovia has done a new "determination" that claims our house is in a flood zone, based on 1997 conditions. Those warm, fuzzy TV ads that claim "We're With You When"
http://www.youtube.com/watch?v=jGqT2ZplY2k&feature=PlayList&... appear freakishly spooky to us now:
Like, in this hellish, illogical morass you created, you're with us here, too? Prodding us with a pitchfork?
3/31/10 Update. Tremendous news! Today, FEMA released a new LOMR in our neighborhood, correcting the map that had been posted (the one that never went into effect). The new LOMR lowers the flood zone by three feet, which not only moves the flood zone 35 feet away from our house, but puts an additional seven houses out or nearly out (with a little work) in the neighborhood.
And it only took five years, the BBB, AARP fraud prevention, RESPA, the Government Accountability Office, Homeland Security, Call for Action, the El Paso County bar association, three trips to court, and several letters through our U.S. Representative Doug Lamborn's office to get here.
The bigger problem and the bigger story is that during the last five years, our lender threatened foreclosure on our home some 30 times, and is still attempting to do so. All because of a FEMA map that never went into effect, and was "wrong, in error, physically impossible, and incorrect" as testified to in court and agreed to by the judge.
I wonder how many of our Colorado Springs tent city dwellers experienced the same fiasco, but could not afford to spend the time disputing it?
4/15/10 Update. One of the houses in our neighborhood that is now out of the flood zone according to the new 3-foot-lower map (which should have gone into effect in 2004) was foreclosed on by the bank. This is an extreme insult to everyone who thinks we live in a free country, when a mistake by FEMA (or whoever) can result in people losing everything they own. FEMA, the banks, and the insurance companies need to be held accountable. Today, I go to the TEA party!
7/26/10 Update. We sent a letter to our insurer, Allstate, on April 8, 2010, followed by another letter on May 23 with 16 pieces of out of the zone documentation. We received a response today from Allstate that a company called CoreLogic has made a determination that our house is in a flood zone, even though the 16 pieces of documentation show that our house is now and always has been out of the flood zone.
Will FEMA, Wachovia, Allstate, or CoreLogic step up and do what's right? We'll see. In the mean time, we have included CoreLogic in the Department of Homeland Security/Government Accountability Office investigation. They are now on the list of companies involved in this fraud. I have contacted them to make sure they received the legal documentation, especially the certified elevation survey information, before they made this erroneous "determination".
Shame on Allstate for passing blame on this debacle to CoreLogic.
Stay tuned.
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