Lenders reevaluate making flood insurance mandatory on jumbo loans

The recent surge in natural disasters has spurred more interest from mortgage lenders.

According to an article in MarketWatch, the Federal Emergency Management Administration is re-evaluating flood maps, requiring more jumbo-mortgage holders with homes in high-hazard areas to buy flood insurance.

Flood coverage is only required for government-backed mortgages or conforming loans, but lenders tend to keep the same mandates for jumbo borrowers who live in high-hazard areas, the article explains. 

Even if lenders are not insisting on excess coverage, more luxury homeowners in the New York-New Jersey-Connecticut area are asking for estimates and purchasing excess flood insurance this year, said Celia Santana, president and CEO at New York-based insurance broker Personal Risk Management Solutions. “There’s a lot more interest in flood than ever before, and it has not dissipated since the hurricane,” she added.

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