It appears part of our lending area will be declared a federal disaster area any day now due to recent rains and flooding.

As a result, our secondary market investors have put us on alert that for any loan approved but not yet closed or funded, will require a follow-up visit prior to funding, by the appraiser, to ensure no flood damage has taken place. This will result in addiotional costs fromt eh appraisers, as well as the risk of losing rate locks due to the additional timing required.

In terms of RESPA, thoughts that these additional costs (appraisal follow-up, rate lock extentions, etc) could be considered changed circumstances. Or will the FDIC try to trump the hand of God?

At this point, I would say they would be. It was certainly something you couldn't anticipate...and you can't blame the investors for wanting to ensure their collateral is ok.

On the other hand...I wonder what instructions FDIC and others will send out as far as assisting those in the disaster area.

What happens if the house is underwater...you end up with a denial?

Isn't one of the changed circumstance definitions "an act of God, war, etc..."? Might be a stretch but worth thinking about.

yes, it is!

Same problems around here and we're relying on your suggestion, MN. Add to that 'circumstances not known at the time of application' and the situation is covered more than once by RESPA. Further, Chicago has had some of the same weather so my FRB examiners will have faced this by the time they get here.

omg, duh! It's right there!!

You get so caught up in what is or is not, lost sight of the basics... excuse my brain lapse... moving on!

Hallelujah - we agree on something!!

GEEZ! (I'm sure it's not the first time! )