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FDIC Flood Audit - Pulling the Flood Cert
Answer by David Dickinson, BOL Guru
Guru Bio
Question: What does FDIC look for when they do a flood exam as far as when the flood cert should be pulled? Is it mandatory that it be pulled ten days prior to closing, knowing that sometimes this is not reasonable? If there is ample time to do this do they cite you if it's not done within that time frame?
Answer: There is no time frame for pulling the SFHDF. However, if you back into this, the timing will make more sense. If the property is located in a Special Flood Hazard Area, then you must deliver the notice within a reasonable time before the completion of the loan (the 1996 law omitted the "10 days or no later than commitment if the period between commitment and closing is less than 10 days" wording). Since the notice has to be delivered a reasonable time before closing, then you must get a SFHDF before this time in order to comply with the notice timing requirement. When is this? There is no specific answer. Most lenders order a SFHDF when they order an appraisal. I believe that's a good practice.
First published on BankersOnline.com 2/04/08
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