Jim Nadeau is a Professional Land Surveyor, a Certified Floodplain Manager, a Certified Floodplain Surveyor, and also a Realtor. His diverse knowledge in these areas makes him very well-qualified to answer a variety of questions you might have. Type your question below and enter your email address so we can contact you. Some Q&A's may be posted anonymously on this page so others may benefit from the knowledge.
Q: Why does my bank require a mortgage inspection?
A:The note is created as an investment to be kept in-house or sold in the secondary market. The lending institution orders a mortgage inspection in order to address two concerns they have when issuing the note:
1) Does the property lie within a Floodplain and risk damage by flood? If so, it could be a bad investment and potentially lose marketability.2) Is the property in compliance with setbacks and are there any municipal problems that could potentially lower the property's value?
As you see, a mortgage inspection serves the concerns of the lender and has everything to do with protecting and marketing the lender's investment. For this reason, it is important to understand that a mortgage inspection is not a land survey.
Q: Do you use elevations when making a flood determination?
A.Most people believe we do, but the answer is no. When making a flood determination, we are required to use horizontal scaling only on the flood map which is less accurate. In many cases, a Letter of Map Amendment (LOMA) application needs to be filed in order to challenge the flood determination. It is in the LOMA that elevations will be used to dispute the initial findings. As we all know, insurance rates and their premiums affect a client's buying power or a home owner's monthly budget. Whether or not you scale into the flood zone, investigating your insurance needs to protect your investment is always a good idea as you may still have flood risk.