April 30, 2006

Harris H. Simmons, Chairman
American Bankers Association
1120 Connecticut Ave. N.W.
Washington D.C., 20036

Dear Mr. Simmons:

I hope that my letter and the enclosed information will be useful to mortgage lenders doing business in Western North Carolina.

The western section of the state is experiencing a real estate boom. Hundreds of millions of dollars are being invested in mountain resort property. Much of the development is being placed on sheared vertical slopes in vulnerable unmapped hazard sites.

In September 2004 there were 130 landslides in Western North Carolina. These catastrophic events caused five deaths and destroyed 27 homes. The North Carolina General Assembly recognized the landslide risk when they passed the Hurricane Recovery Act of 2005. Part of the bill provided funding for a four year landslide hazard map for nineteen counties.

In North Carolina the regulation of mountainside development is under the control of local jurisdiction. Most municipalities are not requiring hazard mapping for mountain slope construction and this increases the risks of landslides and flooding. Neither of these catastrophic events are covered by homeowners insurance.

Mortgage lenders financing mountain slope property need to be aware that their investment is not protected by safe building standards or by insurance.

Sincerely,

Lynne Vogel