Homeowners Face A Flood Of Bureaucracy

Payson agrees to throw a life ring to homeowners trapped in the undertow of a paperwork error

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Payson has agreed to tilt the windmill of federal bureaucracy on behalf of about 100 homeowners facing huge flood insurance premiums as a result of a paperwork error.

Resident Jim Gardner appealed to the council for help on behalf of residents of the Woodland Meadows and Trailwood subdivisions, each facing $800 to $12,000 annual bills for flood insurance they don't need because of an inaccurate federal flood plain map.

The ground on which the houses were built years ago was on flood plain, meaning floods could jump the banks of the natural streams and gullies and run back and forth across the sloping ground.

But the developer graded the land and built a flood control channel when he built the homes. That should have been enough to change the federal status of the land.

However, the developer never filed the required map with the Federal Emergency Manage-ment Agency (FEMA). If he'd filed an updated map showing the flood control channel, FEMA would have reclassified the area and the federal maps would not have shown the houses as standing in a flood plain.

Generally, lenders require borrowers building on a flood plain to carry flood insurance.

However, for years the homeowners dealt with the problem by simply asking the town for a letter explaining the mistake and certifying that the ground on which the houses stand isn't subject to flooding.

Then came Hurricane Katrina -- followed in short order by the lending meltdown. The twin events made insurance companies and mortgage companies much tougher about policing the fine points of the mortgage agreements.

Now, the mortgage companies are insisting that homeowners go get flood insurance -- which can cost up to $12,000 for a $300,000 mortgage, said Gardner.

"We've spent the last two or three months trying to solve this," said Gardner, before running out of time and paying $800 for flood insurance. Individual homeowners can file map amendments with FEMA, but that costs nearly $5,000 per amendment.

That's why Gardner asked the council to have the town file a request for a single map change that would encompass all the lots protected by the flood control channel.

"Some of these homeowners, it's just going to take their homes away -- my neighbor said she will have to move or lose her house," said Gardner.

Town Engineer LaRon Garrett said that the plight of the homeowners was an anomaly from an era when developers were required to file the floodplain maps with FEMA and the town didn't double check. "Under today's rules, this would never have happened," said Garrett.

"This is where I believe the government has got to look after the citizens," said Gardner. "If I try to sell my house, they're saying ‘your house is in in a flood plain and it isn't worth anything.'"

"Why would the developer have not submitted a map" to FEMA? asked Mayor Bob Edwards.

"By the time the developer had it ready, he'd sold all the houses -- and he had no incentive," said Garrett.

Garrett noted that he's been deluged with requests for letters to FEMA in recent weeks, "but the letters aren't working any more."

"We've done all the things we were supposed to do," said Gardner, "but we just fell through the cracks."

At the end of the discussion, the sympathetic council directed the town staff to submit new maps to FEMA, even if it meant paying the filing fee at town expense.

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