Our flood determination vendor lists a zone on the form that differs from the zone on the insurance policy. As long as both agree it is in the flood plain or not why is this a problem? If they both say it is in the flood plain and the customer gets the required amount of insurance what is the issue? Where can I find in the Flood Disaster Protection Act that this is a problem?

It is a problem because FEMA will not pay out if the customer has not been paying the higher-risk zone premium. What we usually see is the insurance is in Zone X and the property is in Zone AE. The premium is much higher in AE.

It is also a problem if you an FDIC bank. See FIL 07-114.

When you say the zone differ, please be more specific. If they both agree is it an "A" zone, but one lists AE while the other lists AO, for example, don't sweat it. This still requires flood insurance and the premium is the same. If one says it is "B" while the other says "A", you must resolve the discrepancy.

It is where one says A and the other B or even C. However, they provided them with flood insurance. I'm still having trouble finding it spelled out in a reg. so I can show this to the loan officers that we are required to get the discrepancy resolved before closing the loan.

Did you search for the FIL Skidoo referenced? The FDIC makes it pretty clear the discrepancies must be resolved. Also see page 12 of the Mandatory Purchase of Flood Insurance Guidelines. And review the guidance put out by FEMA.

http://www.srgflood.com/pdf/2008FEMAFloodZoneDiscrepanciesProcedures.pdf

Effective May 1, 2008, WYO companies and the NFIP Servicing Agent are hereby directed to use the most hazardous flood zone for rating when presented with two different flood zones, unless the building qualifies for the “grandfathering rule.”

Yes, I printed out the FIL and it states under the "highlights" that policies should be checked to confirm the risk zones were the same. I was just hoping to be able to quote a reg. section for loan officers.
Thanks to all for their help.