Flood Determination Date & ROR
Dan Persfull and Kathleeen Blanchard, BOL Gurus Guru Bio
Question: What date does the flood determination need to reflect? I had a loan that had a right to cancel and the flood wasn't pulled before the loan date, but was pulled before the rescission date. Is this acceptable?
Answer by Dan Persfull: No. Page 34 of the Mandatory Purchase of Flood Insurance Guidelines states: A lender also must complete the SFHDF (see Appendix 3, Standard Flood Hazard Determination Form) prior to concluding loan processing.
Answer by Kathleen Blanchard: It is actually too late. The bank has already committed to fund, provided the customer does not rescind. The bank should have had the flood determination completed and the disclosure and insurance taken care of (if the property is in a flood zone) prior to the documents being signed. The bank put itself in a position where it has to fund even if the customer refuses to obtain insurance, should it be required. The bank would then have to force place.
First published on BankersOnline.com 12/15/08
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