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Latest Compliance - Flood Insurance Topics

Declaration Page Evidencing Coverage (Flood Rules)

01/29/2017

We have a no cashout refinance where property is in a flood zone. The way I read the flood rules, we still need a declaration page evidencing coverage and then during our ongoing monitoring of the property, we can then accept a notice of insurance coverage at that point. Is this correct?

Mortgage Impairment​ Policy

12/12/2015

The bank has a mortgage impairment​ policy that states the lender is covered in the event of a loss due to flood​ damage​ in the amount equal to the outstanding loan amount or the limits imposed by​ the flood regulation, whichever is less. Is this type of coverage​ sufficient to serve as a "force placement of flood insurance" in the event a borrower allows their flood policy to lapse and they have not responded to​ the banks request for a new policy? In the regulation it reads we have to​ force place on behalf of the borrower...the borrower is not covered in this case, only the outstanding loan amount is. I am interested in your thoughts. Also, we do not charge the borrower for any force place coverage in this situation.

Reg That Has Threshold for Building's Value

09/15/2014

I have a loan located in a flood zone. The appraisal is $105,000 with a $102,000 land value leaving the one building on the site a value of $3,000. I know flood insurance is not required on loans of $5,000 or less and a term of one year. Is there anything in the regulation that has a threshold for the building's value? If so, what is that value?

Biggert-Waters Reform Act: NFIP Policy

09/15/2014

Beginning this fall, in accordance with Biggert-Waters Reform Act, the NFIP will implement the requirement for agent and policyholder notification in cases where duplicate coverage is indicated. Per FEMA, when duplicate NFIP policies are issued to different named insureds for the same building, the building owner must determine which policy is to remain in effect. For example, if a tenant has purchased building coverage, the policy(ies) must either be endorsed to remove the building coverage, endorsed to include the building owner as a named insured, or canceled. My question, has there been any discussion of how Lenders will be notified of policy cancellations? Will the borrower be given adequate time to produce evidence that the required coverage is in place but through a separate policy that precedes the policy they obtained when their loan was closed? I can foresee this being an issue where a loan was made to a tenant that leases commercial space who was unaware the building owner already had coverage in place.

Loan Taking Land As Collateral But Not Mobile Home

06/02/2014

We have a loan where we are taking the land as collateral but NOT the mobile homes on the land. The property is in a flood zone but should we require flood insurance since we have no interest in the mobile homes?

Most Popular Compliance Content

Collection Communication for Demand Deposit Accts.

04/22/2018

Collection communication for demand deposit accounts (i.e., overdraft notices, NSF notices, request for payment, etc) - are we allowed to send ​such notices ​if we are aware of an active bankruptcy case? What if we are not made aware of the bankruptcy case?

Removing Joint Owner from Safe Deposit Box

04/22/2018

I'm not sure what this falls under, but I have a question about safe deposit boxes. I have always been told that if you have a safe deposit box joint with someone else and you wanted to remove their name from the box then you could do so. Is this not something you can do? I know you cannot remove a joint owner from a checking, savings, etc.

Score in Chex System for Adverse Action Deposit

04/22/2018

Do you provide a score, contained in a Chex Systems report, in an adverse action notice for deposit accounts? I'm working on our deposit audit and am confused by the definition of a credit score. Section 615 of FCRA refers you to 609 (f)(2)(A) for this definition: (A) CREDIT SCORE.--The term "credit score"-- (i) means a numerical value or a categorization derived from a statistical tool or modeling system used by a person who makes or arranges a loan to predict the likelihood of certain credit behaviors, including default (and the numerical value or the categorization derived from such analysis may also be referred to as a "risk predictor" or "risk score"); and (ii) does not include-- (I) any mortgage score or rating of an automated underwriting system that considers one or more factors in addition to credit information, including the loan to value ratio, the amount of down payment, or the financial assets of a consumer; or (II) any other elements of the underwriting process or underwriting decision. ​COMPLIANCE FCRA, Credit Score, Credit report​

Joint Acct. w/ PODs- "Trust Under Agreements"

04/22/2018

A client wishes to open a joint account and designate 3 POD's; 2 are "Trust Under Agreements" and the 3rd is an actual person. First, I don't see the 2 beneficiaries as conforming to the FDIC definition of a beneficiary. I have concerns with that. Furthermore, is it permissible and what are the ramifications in allowing it? Or should this be handled in a bank with trust services?

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