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#1497092 - 01/19/11 06:33 PM Force placed flood insurance
VRV Offline
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Joined: Jun 2007
Posts: 173
I would like comments around the requirement to force place flood insurance on properties when the loan is in default. Obviously, the requirements to force place insurance if the borrower has not maintained it applies even in the borrower is delinquent or in default. And it also seems clear that once the property has been foreclosed and is being held in OREO or is sold to a third party, there would be no requirement for flood insurance to continue to be force placed by the Bank. But what about situations where the loan has been charged off--it seems to me that just because we have had to put the loan in a charged off status doesn't change our obligation to force place insurance if the borrower isn't carrying it. Thoughts?

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Flood Compliance
#1497214 - 01/19/11 08:27 PM Re: Force placed flood insurance VRV
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,633
Galveston, TX
Charge-off is an internal accounting function and does not extinguish the loan. I agree with you.
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#1497399 - 01/20/11 01:45 PM Re: Force placed flood insurance rlcarey
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,844
Bloomington, IN
So do I. Until the loan is forgiven or you take possession of the property it's a designated loan.
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The opinions expressed are mine and they are not to be taken as legal advice.

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