I am reading the flood guidelines and understand that in the event a loan has a requirement to escrow, that in the event the property is determined to be in a sfha we would need to escrow for flood insurance as well.

What is throwing me is that in all places that I'm reading it uses the word "required" escrow. What if the escrow account was set up at the borrowers request and not as a requirement for loan? Would we still be required to escrow for flood?

Yet another confusing look at the regs.

Voluntary escrow is not subject to the mandatory rule to escrow for flood insurance but why on earth would you not require it if you're setting up an escrow anyway and flood insurance is required on the loan?

I agree whole heartedly with your statement. It's just that I can't bring myself to say that we are REQUIRED by law to escrow for flood if we aren't.

I am comfortable with saying that we need to build it into our procedures that if an escrow account (required or volunteered) is established then we (the bank) will require escrow for flood.

Thanks for you help. I always appreciate a response from you.

Escrowing for the flood insurance avoids a lot of potential headaches and violations down the road.

If flood insurance is required then we require escrow with no exceptions.