Skip to content
BOL Conferences
Thread Options
#1447573 - 09/23/10 06:16 PM Flood - Insurance Co & bank SFHD not matching
Many Hats Offline
Platinum Poster
Joined: May 2008
Posts: 915
Orlando, FL
We have a situation where the flood determination obtained by the bank's vendor indicates that the property is located in flood zone VE. The insurance declarations page indicates that the property is in flood zone X.

The property is a condo on the beach and although the condo association does have flood coverage, it is insufficient(see below:

Total of liens = $370k
Max avail = $250k
Repl Cost = $208,517 per unit (this is according to the estimated replacement cost on the declarations page itself)

The condo association has coverage iao $203,780 per unit. (Which I think is interesting that they estimate the replacement cost to be $1,042,587 but they only have $1,018,900 in coverage).

We have two issues:
1) The flood zones do not match. Since their determination indicates the property is NOT in a flood zone, they could cancel their policy and we would be at risk in the event of a flood.

2) The condo policy is insufficient iao $4,737.

Do we require the borrower to obtain insurance iao $4,737 to compensate for the shortfall in the condo associations coverage? OR...

Do we require the borrower to obtain their own policy iao $208,517 (the replacement cost according to the insurance company)?

Return to Top
Lending Compliance
#1447797 - 09/24/10 12:56 AM Re: Flood - Insurance Co & bank SFHD not matching Many Hats
Many Hats Offline
Platinum Poster
Joined: May 2008
Posts: 915
Orlando, FL
Bump

Return to Top
#1447805 - 09/24/10 02:36 AM Re: Flood - Insurance Co & bank SFHD not matching Many Hats
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1447834 - 09/24/10 12:47 PM Re: Flood - Insurance Co & bank SFHD not matching rlcarey
Many Hats Offline
Platinum Poster
Joined: May 2008
Posts: 915
Orlando, FL
Perfect!

Thanks so much!

Return to Top
#1448559 - 09/27/10 02:39 PM Re: Flood - Insurance Co & bank SFHD not matching Many Hats
Sewanee, CRCM Offline
Gold Star
Joined: Dec 2006
Posts: 435
TN
If you don't already have a solution, send me PM and I can send you a letter from FEMA which addresses the insurance agent vs lender conflict.
_________________________
____________________________________
Keep Calm and Carry On
CRCM

Return to Top
#1448572 - 09/27/10 02:54 PM Re: Flood - Insurance Co & bank SFHD not matching Sewanee, CRCM
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Do you have something from FEMA different than the letter Randy gave the link to which addresses the discrepancy issue?
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#1449845 - 09/29/10 07:11 PM Re: Flood - Insurance Co & bank SFHD not matching Dan Persfull
Sewanee, CRCM Offline
Gold Star
Joined: Dec 2006
Posts: 435
TN
Sorry, it turns out it was the same letter.
_________________________
____________________________________
Keep Calm and Carry On
CRCM

Return to Top

Moderator:  Andy_Z