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<br />002831 <br /> <br />for development in landslide areas. Almost all construction today involves <br />loans or mortgages by private lenders. . Many of these loans are insured by <br />government agencies that specify minimum requirements for eligibility. For <br />example, the u.s. Department of Housing and Urban Development (1973) sets <br />minimum requirements for construction and design, and insists that natural <br />hazards, including landslides, be taken into consideration. <br /> <br />Private lenders also can require consideration of landslide hazards. From <br />surveys of home-mortgage originators in the states of Washington and <br />California, it was observed that the response of those California lenders <br />recognizing seismic hazards, includin9 landslides, "is usually to avoid loans <br />in particularly hazardous areas or to require that homeowners purchase <br />earthquake insurance." It was also noted that at least two of the 121 largest <br />residential lenders used landslide-hazard information in their evaluations of <br />applications for loans. <br /> <br />Insurance - The cost of landslide insurance can discourage development in <br />hazardous areas or encourage land uses that are less subject to damage. <br />Landslide insurance from private sources is costly for areas known to be <br />susceptible to landslides, because losses due to landslides lack the random <br />nature necessary for a sound insurance program. In this respect, landslide <br />areas are comparable to flood areas, and the American Insurance Association <br />(1956) statement on flood insurance may be applicable. Flood insurance <br />(private agency, nonfederal) covering fixed-location properties in areas <br />subject to recurrent floods cannot feasibly be written because of the virtual <br />certainty of loss, its catastrophic nature, and the reluctance or inability of <br />the public to pay the premium charge required to make the insurance <br />self-sustaining. <br /> <br />The federal government attempts to discourage development in debris/mudflow <br />areas (areas where landslides have a high water content) by means of the <br />National Flood Insurance Program (NFIP). As amended by the U.s. Congress <br />(1974b), this program requires that some kind of flood insurance must be <br />purchased before any form of federal financial assistance will be given for <br />construction or acquisition in areas where these hazards have been <br />identified. However, there is no funded program for identifying and mapping <br />debris/mudflow hazard areas for the NFIP. <br /> <br />- 46 - <br />