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#1442083 - 09/13/10 06:29 PM Flood Notices on Cross Collateraized Property
deh Offline
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If I have 6 loans with 4 flood properties cross collateralized and 3 are extending. How many notices do I have to do? 12 or 24? I think it is time to retire from compliance...... frown

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#1442102 - 09/13/10 06:48 PM Re: Flood Notices on Cross Collateraized Property deh
deh Offline
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Joined: Mar 2006
Posts: 866
Anyone? I need an answer ASAP.....

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#1442150 - 09/13/10 07:27 PM Re: Flood Notices on Cross Collateraized Property deh
Doug Hendrickson Offline
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Doug Hendrickson
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Since flood notices are required whenever you extend a loan, and you are only extending three (3) of the six (6) loans, if I'm reading correctly, then you need 12 notices if all 4 flood properties are cross-collateralized on those three (3) loans.

A guru might know if you can 'save' on notices if all three (3) loans have the exact same borrowers.
Last edited by Doug Hendrickson; 09/13/10 07:29 PM.
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#1442156 - 09/13/10 07:39 PM Re: Flood Notices on Cross Collateraized Property Doug Hendrickson
deh Offline
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Joined: Mar 2006
Posts: 866
Thanks. I don't know why I find this so confusing. We had examiners comment on this and I freak out whenever I think of any type of flood violation. We have way too many cross collateralized flood properties!!!

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#1442158 - 09/13/10 07:41 PM Re: Flood Notices on Cross Collateraized Property deh
Doug Hendrickson Offline
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Doug Hendrickson
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I also worry on the cross-collateralization, but more in terms of how much money we're lending overall versus the real (current) value of the property, especially in this market.
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I hear and I forget. I see and I remember. I do and I understand.--Confucius

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#1442354 - 09/14/10 01:13 PM Re: Flood Notices on Cross Collateraized Property Doug Hendrickson
Dan Persfull Offline
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Dan Persfull
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Posts: 46,702
Bloomington, IN
There is no prohibition in the Reg that I'm aware of prohibiting you from sending one notice identifying all the applicable properties.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1442383 - 09/14/10 01:58 PM Re: Flood Notices on Cross Collateraized Property Dan Persfull
deh Offline
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Joined: Mar 2006
Posts: 866
Where would that one notice go for documentation? Or are you saying you would make copies to put in the other files?

So in my scenerio above if we have 6 loans with 4 flood properties and 3 are renewing. I would only need 4 original notices but would copy and put in the loan files that are renewing?

The notice has a place for a loan number. Don't we have to list each loan individually?

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#1442400 - 09/14/10 02:11 PM Re: Flood Notices on Cross Collateraized Property deh
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,702
Bloomington, IN
Our notice doesn't have the account number but if yours does what's wrong with listing?

Loans:

123
456
789

Properties

ABC Panel # Map # Flood Zone A
DEF Panel # Map # Flood Zone A
GHI Panel # Map # Flood Zone A

Total Insurance coverage required $XXX,XXX


Quote:
Where would that one notice go for documentation?


For us we have a master file that contains all notes to the customer and applicable information. It would go in the master file.

If you maintain separate files then the logical choice would be to make copies of the notice and place in the applicable files.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1442524 - 09/14/10 03:27 PM Re: Flood Notices on Cross Collateraized Property Dan Persfull
deh Offline
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Joined: Mar 2006
Posts: 866
Our flood determination company uses a form that lists the loan #. There is not enough room for more than one or two loans.

Then of course the certificate lists the account number as well. Which is another issue because we want Life of Loan on each loan file. The flood determination company doesn't recognize the account number if we put more than one in that field.

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