We have a commercial loan that is in a workout situation. We agreed to lower payments and reduce rate if customer let us take a mortgage on his commercial building. The building is in a flood zone, which of course wasn't checked prior to the taking of the mortgage. Does this meet the "MIRE" defintion? Are the requirements under the NFIP triggered? We did not make, increase, renew or extend the existing loan.

You didn't MIRE, but you have knowledge of an uninsured building, which is a "trip wire". Refer to page 53-54 of the FEMA Guidelines for more info. You do trigger the Flood requirements.

Thanks, when do you think they'll update that 2007 manual? :-)

Sorry, gotta keep going with this. We are not in first position, we're in second. And the borrower won't purchase the coverage, so we must forceplace. Even when forceplacing, we're still required to purchase enough to cover both first and second liens, correct?

Lenders are driving me crazy!!!!!!!!!!!!

Correct.

I have no idea when they'll update the 2007 manual. It only took them about 2 1/2 years to get the FAQs finalized, but then they re-preposed 2 FAQs.

This saga continues......
1st lien - $125,000
Our lien - 35,000
Total - 160,000

We also have a lien on the contents (valued at $35,000), which are located in the commercial building. In addition, there's a garage and mobile home on the property, all in the flood zone.

Do we forceplace coverage, IN TOTAL, for $160,000 and split it amongst the three buildings AND the contents? Or do we need contents coverage for $35,000 and split the remaining amongst the 3 buildings?

You need $160,000, if that is the "lesser of 3". You will need coverage on every building located in a SFHA AND the contents. It doesn't matter how much you put on each building/contents, but it must total $160,000.

Thanks again. I thought this was in the 2009 Q&A but just can't find it.