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Latest Compliance - Flood Insurance Topics

Elevation Certificate Cost-Change in Circumstance?

02/24/2019

Is the cost of an elevation certificate a valid change in circumstance? The elevation certificate is not a requirement of the bank but it is a requirement of the insurance company. If we don't need to re-issue the loan estimate where should the fee be disclosed on the closing disclosure?

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.

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Protected Funds Apply to Child Support Levies?

04/14/2019

I recently did an e-train webinar, regarding California Levies/Subpoenas as my credit union is located in California and Oregon. In this e-training the instructor told us that protected funds do not apply to child support levies. I have been to many seminars regarding levies and subpoenas and I have never been told this. I was taught of course that IRS levies do not apply to protected funds, but never child support. Does this rule only apply to California or to all states?

Reg E Unauthorized Transaction w/PIN Issue

04/14/2019

REG E, if a consumer has given his or her PIN to a friend, the friend later steals the card [and uses it without authority], are we required to give them their money back under Reg E?

Family Trust-Individuals Use Separate SSANs?

04/14/2019

John and Cindy both have individual accounts and just created a family trust which has no tax number. Can they use their separate SSANs for the account without adding the other person as joint owner?

Violation if Make ATM Unavailable for Week?

04/14/2019

If we deactivate the card reader access to ATM area and make ATM unavailable for about a week, will it cause any violation on to regulation? Our bank’s ATM is inside a building. Anyone who wants to access the ATM machine needs to get in the first door with access via a card. There is another door before you get to the bank’s lobby. There is a small area between the first door and second door. Recently we found a homeless person who gets in that area around midnight and sleeps there. Even worse thing is he urinates during the night and leaves unpleasant smell before leaving early in the morning. We are hoping the person will find a new place to stay if we temporarily shut it down.

State Requirements: Lender-Placed Insurance

04/07/2019

I'm looking for a resource that can provide the state-specific requirements for lender-placed insurance notifications - this would be above/beyond the CFPB model forms.

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