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#1529518 - 03/31/11 11:56 AM Non-Participating Community
Dena
Unregistered


I have a loan that is located in a flood hazard area and the community does not participate in the NFIP, can you require flood insurance on the property?

The customer purchased a flood policy and paid the full premium. The insurance company has rejected the policy for several different reasons. First they needed an elevation certificate. We provided that to them. Then we were notified that the community chose not to participate in the NFIP back in December 2010 and they could not write the policy and the customer would NOT be able to purchase a flood policy on the property.

What do I need to do to insure we are in compliance?

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Flood Compliance
#1529690 - 03/31/11 01:54 PM Re: Non-Participating Community [Re: ]
Dan Persfull Offline
10K Club

Registered: 08/28/02
Posts: 40963
Loc: Bloomington, IN
They cannot purchase a policy through the NFIP. If you do require insurance it will have to be from a private insurer such as Lloyds.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1529993 - 03/31/11 05:27 PM Re: Non-Participating Community [Re: Dan Persfull]
Dena
Unregistered


Can we not require flood insurance and still be in compliance?

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#1530045 - 03/31/11 08:22 PM Re: Non-Participating Community [Re: ]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 50412
Loc: Galveston, TX
There is no NFIP insurance available in a non-participating community, so it comes down to a safety and soundness decision.
_________________________
The opinions expressed are my own, take them or leave them.

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#1530128 - 04/01/11 09:28 AM Re: Non-Participating Community [Re: ]
Dan Persfull Offline
10K Club

Registered: 08/28/02
Posts: 40963
Loc: Bloomington, IN
Originally Posted By: Dena
Can we not require flood insurance and still be in compliance?


Yes. However you will not be able to sell the loan to Fannie or Freddie. You also still have to comply with all the notice requirements.

As Randy said, it comes down to a S&S decision.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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