Reduce future flood losses compared to maintaining the status quo
Improve transparency around the potential impacts of climate change and proposed development
SFHA and FPA Definition Recommendations
FEMA currently defines a Special Flood Hazard Area (SFHA) as land “subject to a 1 percent or greater chance of flooding in any given year.” The SFHA may contain several different zones that show different degrees of risk. Historically, FEMA has equated the SFHA with “floodplain” or “flood-prone area” (FPA).
TMAC recommends redefining these terms to give them different meanings. TMAC also recommends using a higher standard of accuracy (95% confidence level as opposed to 50%), but more on that later.
If FEMA adopts the recommendations, the term “Special Flood Hazard Area” would apply to areas that currently require flood insurance for mortgages made by federally regulated lending institutions.
The term Flood-Prone Area, on the other hand, they argue, should be reserved to reflect future risks from climate change and development. See below.
Why separate the two? Lenders would face resistance to enforcement of the insurance-purchase mandate if it meant requiring flood insurance on homes or businesses not yet in the 1-percent-annual-chance floodplain.
But having a separate, second definition that reflects future risk could help floodplain managers lower the probability of future flooding for homes under construction by applying to building codes, elevation requirements, and more. It could also give home buyers additional information on which to base their decisions.
Recommendation for Higher Confidence Limits
Because of a perceived rise in flood occurrences on properties lying outside the SFHA, the lending community has become more suspicious of the standard’s accuracy. People see the SFHA’s flood insurance requirement as a binary choice. “I need it or I don’t.”
But the current definition is based on the AVERAGE chance of flooding. That means 50% of properties would have a higher risk than indicated and the rest would have a lower chance.
After a flood, surprised borrowers sometimes blame their mortgage companies. “How come you didn’t tell me I was at risk?” Many buyers conclude they are safe based on a misunderstanding of technical details related to the 1% annual-chance standard.
The new standard proposes a 95% confidence interval as opposed to an average risk. That would include homes expected to flood in all but 5% of floods. A confidence interval in statistics is another way to describe probabilities.
TMAC argues that an easily understood and interpreted standard would balance safe land use with economic benefit. It would also protect lenders, educate buyers, and encourage borrowers to act responsibly.
Redefining Flood-Prone Areas
The illustration below depicts TMAC’s concept for developing the FPA elevation and associated boundary. It includes an extra safety margin for climate change and future development.
This “freeboard factor” would be a proxy for estimated future conditions.
However, TMAC recognizes there may not be:
• Adequate land-use information to determine the impact of future development or • Planned development expected to change flood conditions or • Sufficient information to determine the impacts of climate change.
0.2% Annual Chance Flood Recommendations
For consistency and ease of communication/education, TMAC recommends applying the 95% confidence limit to .02% annual chance floods also. These were previously known as 500-year floods.
Fill Recommendations
Bringing fill dirt into a floodplain to elevate homes reduces the amount of storage capacity for floodwaters. Fill can also often increase hazards to nearby property owners and have negative environmental impacts.
Currently, a maze of regulations governs the use of fill. TMAC recommends consolidating and clarifying all fill requirements in flood-prone areas.
Among the recommendations: Prohibiting fill as a floodproofing technique.
Notice of Fill Impacts
TMAC recommends that FEMA should require participating communities, as part of permitting duties, to quantify and put on file the impacts of proposed fill and other development on flood height and the environment prior to issuing fill permits.
When increases in flood elevation or potential negative environmental consequences are found and cannot be mitigated, at a minimum, property owners and appropriate environmental agencies should be notified prior to issuing permits.
Many such requirements already exist for floodways. This recommendation would expand the requirement to floodplains.
The TMAC report observes that large amounts of fill placed in the flood fringe can potentially create significant impacts upstream, downstream or both. But there are no impact notification requirements in many communities and states.
“This is in effect a risk transfer to uninformed landowners and environmental stewardship organizations,” says the report.
“While a requirement to notify falls short of a requirement of consent, it is an improvement over today’s framing where risks are allowed to be transferred to others without their awareness.”
TMAC
Status of Adoption Unclear at this Point
Due to the holidays, I’ve had trouble determining where FEMA stands in adopting these recommendations. TMAC clearly labels these “interim recommendations.”
The problem with proposed changes to regulations is that they create winners and losers. People with risky land to sell may not want fuller disclosure. On the other hand, those in danger of flooding may want more information.
Despite occasional hurricanes and biblical rainfalls, there’s no place I’d rather live than the Lake Houston Area. Where else can you find all the amenities of Houston next to so much nature? Below are some of my favorite photos taken here over the years.
Fawn born on lawn outside my officeGreat egret returning to nestThe 5,000 acre Lake Houston Wilderness ParkHawk feeding outside my office.Painted bunting outside my office Roseate Spoonbill, East End Park, KingwoodAlligator at River Grove Park in KingwoodDuck at Cedar Landing in HuffmanGreat egret in breeding plumageRoseate spoonbillsDucks at Cedar Landing in HuffmanSnow geese taking wing over lake during fall migrationWest Fork San Jacinto at River Grove Park, looking east toward Lake Houston
And then there are the spectacular sunrises and sunsets. Dr. Charles Campbell, who specializes in functional medicine, took the two photos below. And good medicine they are!
Sunrise over the East Fork San Jacinto RiverSunset over Kingwood Lakes
I hope you find these images as restful and as spiritually rejuvenating as I do.
This area is worth preserving and protecting. Where else can you live next to beauty like this – inside the city limits of one of America’s largest cities?
Peace to all. And happy holidays.
Posted by Bob Rehak on December 22, 2023
2306 Days since Hurricane Harvey
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2023/12/20050601-DSC_0004.JPG.jpg?fit=1100%2C731&ssl=17311100adminadmin2023-12-22 16:26:132023-12-23 08:49:06Happy Holidays from the Lake Houston Area
12/20/23 – Legal woes are mounting for Colony Ridge. Today, the U.S. Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) filed suit against the controversial Liberty County developer and the companies they own or control.
The government filed a complaint against land development companies Colony Ridge Development, LLC and Colony Ridge BV, LLC, affiliate mortgage company Colony Ridge Land, LLC (collectively, the Colony Ridge defendants), and loan origination company Loan Originator Services, LLC.
The Bureau and DOJ allege that defendants violated the Equal Credit Opportunity Act (ECOA) by targeting consumers of Hispanic origin with a predatory loan product.
The Colony Ridge defendants violated the Consumer Financial Protection Act of 2010 (CFPA) by making deceptive representations to consumers.
Colony Ridge Development and Colony Ridge BV violated the Interstate Land Sales Full Disclosure Act (ILSA) by making untrue statements, omitting material facts, failing to provide required accurate translations, and failing to report and disclose required information.
Defendants violated the CFPA by virtue of their violations of ECOA and ILSA, respectively.
Defendants’ conduct violated the Fair Housing Act.
Goal of Lawsuit
The joint complaint seeks, among other things, injunctions against defendants to prevent future violations of Federal consumer financial laws, redress to consumers, damages, and the imposition of civil money penalties.
DOJ and CFPB contend that the defendants operated an illegal land sales scheme and targeted tens of thousands of Hispanic borrowers with false statements and predatory loans.
Revolving Door Foreclosures that Targeted Hispanics
The joint DOJ/CFPB press release said that Colony Ridge “sells unsuspecting families flood-prone land without water, sewer, or electrical infrastructure, and that the company sets borrowers up to fail with loans they cannot afford. Roughly 1-in-4 Colony Ridge loans ends in foreclosure, after which the company repurchases the properties and sells them to new borrowers.” It amounted, say the plaintiffs to a “set-up-to-fail scheme that has led thousands of families to lose their dreams of homeownership.”
CFPB Director Rohit Chopra said, “Our investigation uncovered that Colony Ridge is baiting borrowers with lies, saddling families with predatory loans for homesites that the company knows have repeatedly flooded with raw sewage and lacked basic utility infrastructure.”
Merrick B. Garland, U.S. Attorney General said, ““Today’s complaint alleges that Colony Ridge targeted Hispanic consumers with predatory loans, misled borrowers about the water, sewer, and electrical infrastructure on its lots, and exploited language barriers by conducting most of its marketing in Spanish while offering important transaction documents only in English.”
Foreclosure and property deed records from September 2019 through September 2022 show that Colony Ridge initiated foreclosures on at least 30% of seller-financed lots within just three years of the purchase date, with most loan failures occurring even sooner.
“Records also confirm that Colony Ridge accounted for more than 92% of all foreclosures recorded in Liberty County between 2017 and 2022.”
CFPB/DOJ Joint Press Release
The Entire Laundry List
The complaint cites a number of specific practices. It alleges that Colony Ridge:
Misleads borrowers about infrastructure on the lots it sells: Colony Ridge has falsely represented that lots in the Terrenos Houston subdivisions were sold with water, sewer, and electrical infrastructure already in place. ” It is only after applicants pay a non-refundable deposit that Colony Ridge discloses the properties may not provide those services and makes that disclosure only in English.”
Sells lots that flood with rain and raw sewage. The complaint alleges that Colony Ridge employees fail to inform borrowers of flood risk when lots have repeatedly flooded in the past, or falsely tells them the lots have not flooded. In fact, in parts of the subdivision, rain causes significant flooding, causing raw sewage to run through or around borrowers’ property, and damaging their personal belongings
Churns through borrowers in a cycle of foreclosure: When families fall behind on payments and enter foreclosure, it allows Colony Ridge to “flip” the properties by repurchasing and reselling them, often at higher prices. Foreclosure and property deed records show that Colony Ridge flipped at least 40% of all the properties it sold between September 2019 and September 2022, selling approximately 8,237 properties twice, 3,267 properties three times, and 2,067 properties four or more times in three years.
Targets Hispanic consumers with predatory loans: Through direct-to-consumer marketing on websites, social media engagement, and telemarketing, Colony Ridge targets Hispanic consumers. Colony Ridge then exploits language barriers during its sales process and uses high-pressure sales tactics to push borrowers to obtain their loan products quickly. The loans have exorbitant interest rates. Between 2017 and 2021, interest rates on Colony Ridge’s loans ranged from between 10.9% to 12.9%, while a standard 20-year fixed rate loan averaged 2.35% to 4.05% during the same timeframe. And in extending the loan, Colony Ridge and Loan Originator Services did not collect information needed to determine if applicants can afford the loan.
Exploits language barriers at borrowers’ expense: While Colony Ridge conducts most of its marketing activities in Spanish, when it comes to the actual transaction, it offers important documents only in English. Failing to offer borrowers accurate translations of contracts, deeds, and other documents in the language in which it conducts the sales and exploiting borrowers’ limited English proficiency violates federal law.
Nine stories since 2020 by investigative reporter Wayne Dolcefino about various aspects of Colony Ridge.
A story in Houston Landing about revolving door foreclosures. A team of reporters found that Colony Ridge sold over 35,000 properties. Nearly half (15,759 properties) ended up back in its hands. Some of the properties had as many as 9 different owners in the last decade.
A Daily Wire story exposing alleged corruption between Colony Ridge insiders and a municipal management district. The municipal management district, run by one of the developers, granted nearly $20 million in contracts to companies controlled by other family members and insiders.
Precinct 3 Commissioner Tom Ramsey brought many of the drainage issues in front of Harris County Commissioners Court last October. No action has yet been taken at the county level.
Posted by Bob Rehak on 12/20/23
2304 Days since Hurricane Harvey
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2020/12/20201207-Aerial-Dec-2020_1210.jpg?fit=1200%2C813&ssl=18131200adminadmin2023-12-20 17:55:232023-12-20 18:24:45DOJ, CFPB Sue Colony Ridge for Bait-and-Switch, Predatory Lending, More
Flood-Mapping Changes Recommended to FEMA
On October 30, 2023, the Technical Mapping Advisory Council (TMAC) recommended that FEMA implement six flood mapping changes. The objectives:
SFHA and FPA Definition Recommendations
FEMA currently defines a Special Flood Hazard Area (SFHA) as land “subject to a 1 percent or greater chance of flooding in any given year.” The SFHA may contain several different zones that show different degrees of risk. Historically, FEMA has equated the SFHA with “floodplain” or “flood-prone area” (FPA).
TMAC recommends redefining these terms to give them different meanings. TMAC also recommends using a higher standard of accuracy (95% confidence level as opposed to 50%), but more on that later.
If FEMA adopts the recommendations, the term “Special Flood Hazard Area” would apply to areas that currently require flood insurance for mortgages made by federally regulated lending institutions.
The term Flood-Prone Area, on the other hand, they argue, should be reserved to reflect future risks from climate change and development. See below.
Why separate the two? Lenders would face resistance to enforcement of the insurance-purchase mandate if it meant requiring flood insurance on homes or businesses not yet in the 1-percent-annual-chance floodplain.
But having a separate, second definition that reflects future risk could help floodplain managers lower the probability of future flooding for homes under construction by applying to building codes, elevation requirements, and more. It could also give home buyers additional information on which to base their decisions.
Recommendation for Higher Confidence Limits
Because of a perceived rise in flood occurrences on properties lying outside the SFHA, the lending community has become more suspicious of the standard’s accuracy. People see the SFHA’s flood insurance requirement as a binary choice. “I need it or I don’t.”
But the current definition is based on the AVERAGE chance of flooding. That means 50% of properties would have a higher risk than indicated and the rest would have a lower chance.
After a flood, surprised borrowers sometimes blame their mortgage companies. “How come you didn’t tell me I was at risk?” Many buyers conclude they are safe based on a misunderstanding of technical details related to the 1% annual-chance standard.
The new standard proposes a 95% confidence interval as opposed to an average risk. That would include homes expected to flood in all but 5% of floods. A confidence interval in statistics is another way to describe probabilities.
TMAC argues that an easily understood and interpreted standard would balance safe land use with economic benefit. It would also protect lenders, educate buyers, and encourage borrowers to act responsibly.
Redefining Flood-Prone Areas
The illustration below depicts TMAC’s concept for developing the FPA elevation and associated boundary. It includes an extra safety margin for climate change and future development.
This “freeboard factor” would be a proxy for estimated future conditions.
However, TMAC recognizes there may not be:
• Adequate land-use information to determine the impact of future development or
• Planned development expected to change flood conditions or
• Sufficient information to determine the impacts of climate change.
0.2% Annual Chance Flood Recommendations
For consistency and ease of communication/education, TMAC recommends applying the 95% confidence limit to .02% annual chance floods also. These were previously known as 500-year floods.
Fill Recommendations
Bringing fill dirt into a floodplain to elevate homes reduces the amount of storage capacity for floodwaters. Fill can also often increase hazards to nearby property owners and have negative environmental impacts.
Currently, a maze of regulations governs the use of fill. TMAC recommends consolidating and clarifying all fill requirements in flood-prone areas.
Among the recommendations: Prohibiting fill as a floodproofing technique.
Notice of Fill Impacts
TMAC recommends that FEMA should require participating communities, as part of permitting duties, to quantify and put on file the impacts of proposed fill and other development on flood height and the environment prior to issuing fill permits.
When increases in flood elevation or potential negative environmental consequences are found and cannot be mitigated, at a minimum, property owners and appropriate environmental agencies should be notified prior to issuing permits.
Many such requirements already exist for floodways. This recommendation would expand the requirement to floodplains.
The TMAC report observes that large amounts of fill placed in the flood fringe can potentially create significant impacts upstream, downstream or both. But there are no impact notification requirements in many communities and states.
“This is in effect a risk transfer to uninformed landowners and environmental stewardship organizations,” says the report.
Status of Adoption Unclear at this Point
Due to the holidays, I’ve had trouble determining where FEMA stands in adopting these recommendations. TMAC clearly labels these “interim recommendations.”
Congress plans to take up the subject of flood insurance in January or February. So we may get some clarity then. Check back often.
The problem with proposed changes to regulations is that they create winners and losers. People with risky land to sell may not want fuller disclosure. On the other hand, those in danger of flooding may want more information.
The states seem divided on flood-insurance reform. Some want to continue encouraging floodplain development by keeping NFIP premiums low. Others want to avoid burdening taxpayers with NFIP bailouts. They claim higher premiums help avoid development of flood-prone land.
It could take years to find suitable compromises. In the meantime, buyers beware. Perhaps TMAC’s recommendations will help improve awareness.
Posted by Bob Rehak on 12/27/2023
2311 Days since Hurricane Harvey
Happy Holidays from the Lake Houston Area
Despite occasional hurricanes and biblical rainfalls, there’s no place I’d rather live than the Lake Houston Area. Where else can you find all the amenities of Houston next to so much nature? Below are some of my favorite photos taken here over the years.
Roseate Spoonbill, East End Park, Kingwood
And then there are the spectacular sunrises and sunsets. Dr. Charles Campbell, who specializes in functional medicine, took the two photos below. And good medicine they are!
I hope you find these images as restful and as spiritually rejuvenating as I do.
This area is worth preserving and protecting. Where else can you live next to beauty like this – inside the city limits of one of America’s largest cities?
Peace to all. And happy holidays.
Posted by Bob Rehak on December 22, 2023
2306 Days since Hurricane Harvey
DOJ, CFPB Sue Colony Ridge for Bait-and-Switch, Predatory Lending, More
12/20/23 – Legal woes are mounting for Colony Ridge. Today, the U.S. Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) filed suit against the controversial Liberty County developer and the companies they own or control.
The government filed a complaint against land development companies Colony Ridge Development, LLC and Colony Ridge BV, LLC, affiliate mortgage company Colony Ridge Land, LLC (collectively, the Colony Ridge defendants), and loan origination company Loan Originator Services, LLC.
Additional Allegations in Lawsuit
The CFPB separately alleges that:
Goal of Lawsuit
The joint complaint seeks, among other things, injunctions against defendants to prevent future violations of Federal consumer financial laws, redress to consumers, damages, and the imposition of civil money penalties.
DOJ and CFPB contend that the defendants operated an illegal land sales scheme and targeted tens of thousands of Hispanic borrowers with false statements and predatory loans.
Revolving Door Foreclosures that Targeted Hispanics
The joint DOJ/CFPB press release said that Colony Ridge “sells unsuspecting families flood-prone land without water, sewer, or electrical infrastructure, and that the company sets borrowers up to fail with loans they cannot afford. Roughly 1-in-4 Colony Ridge loans ends in foreclosure, after which the company repurchases the properties and sells them to new borrowers.” It amounted, say the plaintiffs to a “set-up-to-fail scheme that has led thousands of families to lose their dreams of homeownership.”
Bait-and-Switch Allegations
CFPB Director Rohit Chopra said, “Our investigation uncovered that Colony Ridge is baiting borrowers with lies, saddling families with predatory loans for homesites that the company knows have repeatedly flooded with raw sewage and lacked basic utility infrastructure.”
Merrick B. Garland, U.S. Attorney General said, ““Today’s complaint alleges that Colony Ridge targeted Hispanic consumers with predatory loans, misled borrowers about the water, sewer, and electrical infrastructure on its lots, and exploited language barriers by conducting most of its marketing in Spanish while offering important transaction documents only in English.”
Foreclosure and property deed records from September 2019 through September 2022 show that Colony Ridge initiated foreclosures on at least 30% of seller-financed lots within just three years of the purchase date, with most loan failures occurring even sooner.
The Entire Laundry List
The complaint cites a number of specific practices. It alleges that Colony Ridge:
To see all 45 pages of the lawsuit, click here.
Could More Lawsuits Follow?
Today’s lawsuit follows courageous investigations by a number of news outlets and Texas Attorney General Ken Paxton. They include:
Precinct 3 Commissioner Tom Ramsey brought many of the drainage issues in front of Harris County Commissioners Court last October. No action has yet been taken at the county level.
Posted by Bob Rehak on 12/20/23
2304 Days since Hurricane Harvey
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.