Life of Loan Flood Determinations
Answer by Dan Persfull and Randy Carey, BOL Gurus Guru Bio
Question: The NFIP program indicates that "A lender may rely on a previous determination not more than 7 years old..." Does this include a life-of-loan flood determination or do we need to obtain a new determination on LOL determinations?
Answer by Dan Persfull: If the existing determination is 7 years old or older you must obtain a new determination.
Answer by Randy Carey: I agree Dan, but they may be asking if they can rely solely on their LOL coverage and not get a new determination. I would point to the three requirements:
It is less than 7 years old; and
No new or revised FIRM or FHBM has been issued in the interim; and
It was initially recorded on the SFHDF.
The problem with relying on the LOL is that the LOL company normally only notifies the bank when the flood zone actually changes and not when a map is updated. The Bank would have to ensure that the map has not been updated in order to rely on the previous determination. The bank could check it themselves and note the file or some LOL companies will issue a re-determination for a small fee.
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