Lake Flood Zones: FEMA mapping to cost lakefront property owners time and money

LAKE OF THE OZARKS, Mo. — The Federal Emergency Management Agency is about to cost lakefront property owners a boatload of money.

Homeowners on the water are getting unwanted surprises from financiers one-by-one. Letters from Wells Fargo, Citi, Chase and other lenders are being sent to inform many homeowners in Morgan County that they will now be required to purchase flood insurance due to FEMA's remapping of flood zones at Lake of the Ozarks.

Property owners on the Niangua Arm will be the hardest hit next year. Six months from now, when the new FEMA maps are completed for Camden County, many homeowners from Big Isle south, especially those around the Niangua Bridge west of Camdenton, will find the new base flood elevation (BFE) to be as high as 669 in some areas. Niangua property owners from the 1-10 MM will see the BFE rise one to three feet from current levels.

Most properties along the main channel will experience a BFE of 664-665.

While some national banks are faster than others to reunderwrite existing loans, most homeowners whose residences will now be within the new flood zones should prepare to shell out $850-$3,000 per year for flood insurance, depending on the value of property.

Homeowners in Morgan County dealing with the new flood zones since May 2009 are giving the rest of the lake a solid preview of what's to come.

On the Gravois Arm some structures well above the new BFE are being declared to be in a flood plain by flood determination companies relied upon by banks to analyze FEMA's new maps. Several homeowners on the Gravois Arm with buildings five feet above the newly determined BFE have received letters from national lenders reunderwriting existing loans and requiring these homeowners to carry flood insurance.

In these cases, homeowners armed with the right information to evidence that their residence is above the new BFE have a couple options.

In some cases, homeowners have successfully changed their bank's flood determination opinion by submitting engineer surveys and original FEMA flood certificates for proof of elevation. Citibank was receptive in one reported case on the Gravois.

However, this appears to be more the exception than the rule.

In most cases, as with Wells Fargo and Bank of America, the bank has a clear policy of accepting nothing less than a Letter of Map Amendment (LOMA) from FEMA to change its flood determination opinion.

The LOMA process through FEMA can take 60-90 days, far longer than most banks are allowing for homeowners to show proof of flood insurance. Failure to purchase flood insurance pending a LOMA can constitute a breach of mortgage contract, according to Wells Fargo.

However, if a homeowner successfully receives a LOMA, their annual flood insurance premiums should be refunded, occasionally minus an administrative fee.

To successfully complete the LOMA process, property owners will have to submit a Property Information Form, a county tax assessor’s map, county certified deed, a FEMA Elevation Certificate and consistent Elevation Form to have been completed by an engineer. Homeowners without a FEMA Elevation Cert and Elevation Form will have to pay an engineer $500 or more to survey their property.

With this, of course, comes no guarantee that FEMA will issue the homeowner a LOMA. However, those who successfully obtain the LOMA have an iron-clad document to put to bed the flood zone issue as it concerns an existing loan, refinancing or the selling of their property.

If FEMA declines to issue a LOMA, the homeowner will have to budget for the ongoing expense of carrying flood insurance for the foreseeable future.