Floods occur in all parts of the United States for a variety of reasons. Coastal flooding is often caused by high tides, storms surges, and tsunamis, where as river line floods are caused by widespread precipitation, snow melt, or both. In contrast, flash floods result from sudden torrential rains, dam failures or ice-breakups, which can occur virtually anywhere. In an attempt to curb mounting losses, the National Flood Insurance Program (NFIP) was enacted by Congress in 1968. The NFIP combines insurance subsidies with requirements for state and local flood plain management. Without federal assistance, flood insurance would be unaffordable for those needing such protection. The NFIP based their requirements around the 100-year flood plain ( the area with an annual flood probability of one in 100) which is subject to stringent development controls. Partly due to the complexity of delineating flood prone zones, the NFIP got off to a slow start, but the community participation picked up rapidly following the 1973 enactment of the Flood Disaster Protection Act (FDPA). Under the FDPA, property owners in identified flood-hazard areas are ineligible for any kind of federal aid for purchase or development of their property. Additionally, communities not participating in the NFIP are ineligible for federal post disaster assistance. In short, the trade-off for insurance and disaster recovery benefits is local acceptance of land use regulations, building costs and other hazard reduction measures. Despite of these Legislative efforts flood compliance in the mortgage world is seriously neglected. Such negligence, however, is not the fault of the mortgage companies who have been provided with inconsistent and unreliable information during the loan process. F.E.M.A. estimates that there are 11 million household units in special flood hazard areas, while the NFIP only insures about 1.5 million units. Due to recent legislation, mortgage lenders are required by law to track the property Flood Status for the Life of the Loan. If the lender does not stay in compliance, fines up to $100.000 a year can be imposed. The originator of the loan is also liable for the Flood Zone Determination. Unless the determination is guaranteed with an E & O Insurance Policy, the originator could face having to pay for any flood damage on the originated properties. This law applies to virtually any loan backed by real estate, including VA, FHA, Fannie Mae, Freddie Mac, HUD, EDA, Farmers Home, SBA, Conventional, home equity and home improvement loans.