Our house was flooded and now we don't know what to do...

[thriftyqueen]

On June 22, the sirens blared in our town indicating that the river had over topped it banks and over 4000 homes were going to be flooded.  Sadly, most of us didn't have flood insurance because the city had made the flood plain the river because they were so sure that we would never have flood problems again (last flood was over 40 years ago).  We could have purchased flood insurance and had as a matter of fact the last 2 years.  Anyway, that is neither here nor there.  We made the decision not to purchase it because we listened to the "wisdom" of the city officials and now we have to pay the price for our mistake.

So we owe $193,000 on our home and it would cost us about $150,000 to fix it.  It would need to be gutted down to stud walls and the roof.  Nothing else is salvageable.  The foundation is shot (bowing and shifting).  Besides all of this, I don't feel safe going back there after all of this.  It may never flood again, but we can't risk putting the money into the house for it to flood again.  They will be doing no new dike work for at least 2 years so we will not be any better protected next year.

Our options from what I can tell are to foreclose on the house and walk away or wait for a possible buyout.  Our house is very close to the river and there is a pretty good chance that the city would have to buy our house to tear it down for the dike.  This could be 2-3 or more years in the making.  We have only owned the house for 2 years and the payment is $1400 per month.  If we walk away, we could save that money per month and hopefully be able to buy again in the next few years.  If we wait for the buyout and keep paying on the mortgage, we have little to no money left for rent on something else (besides there is nothing to rent here) and we risk not getting a buyout and having to foreclosure anyway.

FEMA helped a little bit, but there is very little money for any help.  We are pretty much on our own to figure this all out.  We have stellar credit right now, almost no debt besides our house, and we are just so uncertain about what to do.  It worries me to ruin our credit by walking away, but we have to do something so that we can afford to live.

Does anyone have any information on foreclosures in natural disaster situations?  What would you all do in this situation? 

[MacroMama]

Hugs!

 That is such a difficult situation. I don't have any recommendations except that instead of going through a foreclosure, to do a deed in lieu of foreclosure if you decide to go down that road.

Good luck!

[thriftyqueen]

What is the difference between at typical foreclosure and a deed in lieu of foreclosure?

[lilyka]

I have nothing helpful to say,

But, that really sucks.  I am so sorry that happened.

[K1329]

Are you sure FEMA has put all assistance programs in place yet? After a natural disaster, our state also offered homeowners without flood insurance grants of 100k plus. I find it hard to believe there's not more help available! At the very least, I would wait to be sure more assistance won't be offered before I walked. I'm so sorry you're going through this. From personal experience, I know it's a nightmare.

[heatherdeg]

Deed in Lieu is when you hand over the deed to the mortgage company rather than waiting for them to take the house. It's like giving them back the house before they take it from you.  That's all I really know about it.  I found this link though:

http://www.nolo.com/legal-encyclopedia/short-sales-deeds-lieu-foreclosure-30016.html

Hope this helps.  Hugs to you.  :(

[thriftyqueen]

We have been told that the max any household will get from FEMA for this flood is $30,200.  We are completely on our own otherwise.  We are all just reeling.  Only 380 of the 4,000 households had flood insurance.  Some of the people are elderly, some just bought their houses last month, others like us have owned for a short time, but still have a large mortgage.  The city has helped very little and at all the press conferences have just told people to do what they have to do financially to get by.  Many older people who owned their homes are selling them to investors for $30,000-40,000 (these houses appraised for $200,000-$250,000 pre-flood).  We are not in the position to even think about selling for so little since we still owe so much. 

I am going to look into the deed in lieu of foreclosure option.  I did find out last night that there is a representative from our mortgage company in town to talk with people.  I will have to go in there today and have a chat about all of this.  I am just so overwhelmed with all of this.  We have been so wise all this time with making sure we are fully insured on everything to the max and one choice to not get flood insurance one year has completely wiped us out.  It is going to be so hard to move forward financially in the future and I am scared to death now to buy another house out of fear of the unknown. 

[CarrieMF]

don't let this incident stop you from buying again in the future.  If you had been renting this house $30,000 would not cover your personal property.  In the future just make sure you have insurance to cover the likely natural disasters for your area.  Ie, we live in an area that gets a mild tornado every couple of years.  We have insurance to cover it.  We do NOT have flood insurance because the closest river is a 45minute drive away.  If we lived next to a river it'd be different.  We're more likely to flood due to the torrential like rains we get.

[Caneel]

This may be a long shot but do you know if your home was in a flood zone A as identified on a FEMA map?  Being as close to the river as you describe, even protected by a levee or flood wall, it may be in Zone A.  It is is/was, the bank would have been required to carry flood insurance on the property to cover the balance of your mortgage.  It is called force-placed insurance and they would have included it in your escrow.  Like I said, a long shot but worth checking in to.

[thriftyqueen]

Caneel, all the flood maps (even FEMA) for our area only include the river as the flood plain.  They truly believed that their system was perfection and left what they felt as no error.  No single home in our entire town (or county) was required to have flood insurance at all.  It was only optional and we chose the wrong option sadly. 

[Delilah83]

Hugs mama, I wish I had some advice for you.

[nd_deadhead]

Folks, this was an unprecedented situation. The previous record water level in her town was set in 1881, and this was a lot higher. No one had any reason to expect it. This year's flood was about 5 feet higher than the last big one in recent memory, in 1969. It was caused by record snowfalls in the mountains, followed by a summer of heavy rain.

thriftyqueen, you have my sympathy. I'm going to your city with a group from my church on Aug 19. We're from Grand Forks - we have some idea what you're going through.

Was your family's source of income affected? Where have you been living since you were exacuated?

My heart goes out to you, your family, and your neighbors.

[KatWrangler]

  wow.  I am so sorry.  I don't even know where to start to help you.  I am truly sad for your situation.

[thriftyqueen]

Thanks everyone!  The last month has been a whirlwind of dealing with banks, FEMA, city officials, etc.  We have been staying with my mom in her condo, but we are needing a long term solution.  FEMA is bringing in trailers for people to live in and we may end up staying in one for a while.  Fortunately neither of our jobs were affected by the flood and we both have secure jobs.  The problem is that there is no where to live and with all the oil workers moving in, the housing crisis we had prior to the flood is far worse.