The federal takeover of mortgage giants Fannie Mae and Freddie Mac may have an impact on lenders’ requirements for properties to carry flood insurance.

Following Hurricane Katrina, it came to light that many lenders have not required borrowers to secure proper flood coverage on their mortgaged properties, or failed to follow through. That rate of non-compliance has not improved in the last several years in the wake of subsequent disasters.

With the federal takeover of these federal instrumentalities because of continuing mortgage challenges, PIA members and their customers can expect to see record mandates coming from lenders for both personal and commercial property mortgage borrowers to have flood insurance, even beyond the mandatory zones and up their demand for excess flood insurance coverage, as well. PIA National’s WYO offerings with Hartford Flood provide PIA members and their customers both options.

September 10, 2008