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Life of loan flood information?

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wyecoyote

Thread Starter
Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
Recently several of our new clients have been trying to get us to do Life of Loan flood certifications or flood certs for short. I'm real hesitant in this and would like to know: 1. does appraiser out there do these? a) any extra E&O required b) headaches 2. is there any third party sites that do these that we can direct the clients to?

Like I said they are several new clients that are asking about these and I was just wondering about them. These are really the cream of the crop clients (CU and Local Banks no value placed on order and paid within 2-5 days) My initial thought is to send them somewhere else. Or simply take the order and order from someone else and let them deal with the headaches. I would hate to lose these new clients they were refered by an appraiser that went out of biz do to retiring. I have not had the oppurtunity to call him and thank him for the referals yet since it seems that he decided to take his RV and go see the states. But just thinking if I can get a few more of you more "seasoned" appraisers out there to retire then that would be just that much more work.

Ryan
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Yes you do need extra E&O. Compare the cost of insurance vs likely income. The cost of insurance may be too high, unless you can do boo-cuddles of them to make it worth while. Also, most electronic flood maps, like Interflood, that you use as an appraiser may not include a user license for flood certs. I looked into it a while back, as an additional service to sell, but decided against it. Lots more liability, lots more insurance, and I didn't think I could get enough orders to make it profitable.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
What part of LIABILITY do you not understand. The reason that it is big companies (Transamerica, et al) that do these is that if the loan goes bad for the flood call, they are LIABLE for the TOTAL DAMAGES, which can be the total value of the property. Also, flood plains can change at the request of the community or after a major flood, and a property that was outside of the flood plain at the beginning of the loan may end up in a flood plain. This is definitely true when new development downstream backs up the flood waters.
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
I can see you doing these if you have actual updated flood maps and ONLY if the property is definately in a flood zone. However, in my area, the flood maps often do not have enough detail to make an accurate determination so, you may not be able to make an accurate determination in the first place. Also, you need to know if there have been any LOMRs (Letter of Map Revision?) etc. in your area. All in all, sounds like a losing proposition.
 
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