If we have determined that our borrower is underinsured for flood due to a calculation error that we made, can we force place the insurance and pay for it ourselves?

Section 339.7 states that "if the borrower fails to obtain flood insurance within 45 days after notification , then the bank shall purchase insurance on the borrower's behalf. The bank may charge the borrower for the cost of premiums and fees incurred in purchasing the insurance."

I am reading this to mean that we are allowed to charge the borrower but we aren't required to.

I would advise contacting the agent and getting the policy amended for the correct amount and pay the premium difference for the first year if that's what you want to do.