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#1641849 - 12/21/11 05:58 PM
Force Placement Sample Letter
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Gold Star
Joined: Apr 2011
Posts: 257
West Virginia
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Does anyone have a sample 45 day force placement letter they would be willing to share?
Thank you!
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#1642348 - 12/22/11 04:32 PM
Re: Force Placement Sample Letter
ComplianceGrl15
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Power Poster
Joined: Dec 2002
Posts: 4,615
SC
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Appendix 7 of the MPPP Guidelines has sample letters.
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#1642371 - 12/22/11 04:30 PM
Re: Force Placement Sample Letter
ComplianceGrl15
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10K Club
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
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Dear
Notice to Borrower of Special Flood Hazard Area Cancellation of, or Inadequate Flood Insurance Coverage Notice is hereby given that the improved real estate or mobile home described in the attached instrument has been determined to be located in an area designated by the Director of the Federal Emergency Management Agency (FEMA) as a special flood hazard area. This area is delineated on FEMA's Flood Insurance Rate Map (FIRM) or, if the FIRM is unavailable, on the Flood Hazard Boundary Map (FHBM). This area has a one-percent (1%) chance of being flooded in any given year. The risk of exceeding the one-percent chance increases with time periods longer than one year. For example, during the life of a 30-year mortgage, a structure located in a special flood hazard area has a 26 percent chance of being flooded.
Federal law requires that you purchase flood insurance in order to maintain this loan. Flood insurance is required for the life of the loan as long as the property is designated to be located in a special flood hazard area.
The amount of flood insurance required on a property under FEMA guidelines must cover the amount of the loan or the maximum amount available under the National Flood Insurance Program (NFIP), whichever is less.
CHOOSE ONE OF THE FOLLOWING PARAGRAPHS (DELETE THE OTHER THREE AND THIS LINE)
INSERT INSURANCE COMPANY NAME AND ADDRESS notified The Peoples State Bank your policy number INSERT POLICY NUMBER HERE expired on INSERT EXPIRATION DATE HERE. There must be some evidence of flood insurance provided to us within 45 days from the date of this letter. This evidence can include a copy of the flood insurance policy and proof of payment or the FEMA NFIP declaration page. If we do not receive this proof of insurance within the 45 days, The Peoples State Bank will be required to force place insurance on the property. The Peoples State Bank will add the premium to the principal balance of the loan per the security agreement.
There is no evidence in your mortgage file of your having a flood insurance policy on your property. If this is incorrect, please contact us at 812-323-3221. There must be some evidence of flood insurance provided to us within 45 days from the date of this letter. This evidence can include a copy of the flood insurance policy and proof of payment or the FEMA NFIP declaration page. If we do not receive this proof of insurance within the 45 days, The Peoples State Bank will be required to force place insurance on the property. The Peoples State Bank will add the premium to the principal balance of the loan per the security agreement.
It was discovered that the amount of flood insurance you maintain does not meet the required minimum coverage by Law. There must be some evidence of adequate flood insurance provided to us within 45 days from the date of this letter. This evidence can include a copy of the flood insurance policy and proof of payment or the FEMA NFIP declaration page. If we do not receive this proof of insurance within the 45 days, The Peoples State Bank will be required to force place insurance on the property. The Peoples State Bank will add the premium to the principal balance of the loan per the security agreement.
We have been informed by Floodplain Consultants that due to recent changes in the Flood Zone maps the property is now located within a Special Flood Hazard Area. There must be some evidence of adequate flood insurance provided to us within 45 days from the date of this letter. This evidence can include a copy of the flood insurance policy and proof of payment or the FEMA NFIP declaration page. If we do not receive this proof of insurance within the 45 days, The Peoples State Bank will be required to force place insurance on the property. The Peoples State Bank will add the premium to the principal balance of the loan per the security agreement.
The attached form provides specific information regarding your particular flood zone determination and may be required by your insurance agent. Please contact me if I can be of any assistance regarding this notice.
Sincerely,
The Peoples State Bank
Information Regarding Flood Insurance
Name of Borrower(s): Property Address:
FEMA Map Community Number Panel Number Map Date Flood Zone Regular Program Yes ____ No ____ Emergency Program Yes ___ No ____ Amount of Flood Insurance Required :_____________________
NOTICE TO BORROWER ABOUT FEDERAL DISASTER RELIEF ASSISTANCE
XX Participating Communities: The improved real estate or mobile home securing your loan is or will be located in a community that is participating in the National Flood Insurance Program. If such property is damaged by flooding in a federally declared disaster, federal disaster relief assistance may be available. However, such assistance will be unavailable if the community has been identified for at least one year as a flood hazard area and is not participating in the National Flood Insurance Program at the time the assistance would be approved. This assistance, usually in the form of a low interest rate loan, may be available for damages incurred in excess of your flood insurance.
______ Non-participating Communities: The improved real estate or mobile home securing your loan is or will be located in a community that is not participating in the National Flood Insurance Program. This means that such property is not eligible for federal flood insurance. In the event the property is damaged by flooding in a federally declared disaster, federal disaster relief assistance will be unavailable if the community has been identified for at least one year as a flood hazard area. Such assistance may be available only if, at the time the assistance would be approved, the community is participating in the National Flood Insurance Program or has been identified as a flood hazard area for less than one year.
I/We realize that the property securing this loan is located in a flood hazard area and acknowledge the receipt of a copy of the above notices before closing.
____________________________________ __________________________________ Borrower’s signature & Date Borrower’s signatu
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#1819206 - 05/31/13 05:05 PM
Re: Force Placement Sample Letter
ComplianceGrl15
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100 Club
Joined: Feb 2009
Posts: 238
Midwest
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Would anyone have a sample letter from the guidelines that I could use? Or is the verbiage posted from Dan from the guidelines? I can't see the guidelines on the FEMA website anymore since they have been rescinded.
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#1995490 - 02/11/15 10:30 PM
Re: Force Placement Sample Letter
ComplianceGrl15
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Platinum Poster
Joined: Feb 2010
Posts: 835
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Is there standard language that is supposed to be in the force place letter?
Looking in the 2014 flood manual and not finding it. We sent a 45 day notice, but I'm not sure it had the correct language.
_________________________
Live Like No One Else! CRCM
Opinions expressed are my own and do not reflect the views of my employer.
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#2001582 - 03/13/15 05:26 PM
Re: Force Placement Sample Letter
ComplianceGrl15
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100 Club
Joined: Jan 2014
Posts: 147
Oklahoma
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Ironically, I have the same question. Hope this bumps up this thread to the top. I looked all over the FEMA site for samples but found nothing.
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#2002005 - 03/17/15 03:20 PM
Re: Force Placement Sample Letter
ComplianceGrl15
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Platinum Poster
Joined: Nov 2004
Posts: 812
NY
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The regulatory examination handbooks do havbe some wording requirements.
For example, the OCC examination manual says:
"Although the act does not specify the precise wording of this notice, it must state that: [*]The borrower should, at the borrower's expense, obtain flood insurance that is not less than the minimum amount required under the law.
[*]The borrower has 45 days to purchase the insurance.
[*]If the borrowe does not show evidence of obtaining such coverage withing 45 days after notification, the lender or servicer will purchase the insurance on behalf of the borrower and may charge the borrower for the cost of premiums and fees incurred in purchasing the insurance.
Last edited by happyauditor; 03/17/15 03:25 PM.
_________________________
* My opinion is not necessarily that of my employer.
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#2126351 - 04/14/17 03:56 PM
Re: Force Placement Sample Letter
ComplianceGrl15
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Gold Star
Joined: Apr 2016
Posts: 266
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I am trying to look for some information on required amount flood insurance renewal. The original borrowed amount was 465,000 (Original required flood insurance amount) and now the loan is paid down to 98,000 and the policy is up for renewal. Do we still require the customer to pay premium for 465,000 or current balance on the books which is 98k. Please advice.
Thank you,
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#2126357 - 04/14/17 04:22 PM
Re: Force Placement Sample Letter
ComplianceGrl15
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New Poster
Joined: Mar 2017
Posts: 15
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Is this a line of credit or a note?
Last edited by ABrooks; 04/14/17 04:23 PM.
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#2128075 - 04/26/17 05:48 PM
Re: Force Placement Sample Letter
ComplianceGrl15
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New Poster
Joined: Mar 2017
Posts: 15
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we would require the lessor of the 1.) loan balance (if note) and any prior liens, 2.) hazard insurance, or 3.) maximum allowable. So if this is a first lien and the lessor of those three are the note amount of $98K, then we would require that amount.
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#2128085 - 04/26/17 06:07 PM
Re: Force Placement Sample Letter
ComplianceGrl15
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10K Club
Joined: Nov 2000
Posts: 18,762
Central City, NE
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ABrooks: Using hazard insurance as a replacement for "insurable value" is not always correct. Flood Insurance and Hazard Insurance are 2 different animals. This is a complicated topic (one that I can speak on for well over an hour). I wrote an article entitled "Flood Insurance Insurable Value" that addresses this issue. It is posted in the Free Downloads section of our website: https://www.bankerscompliance.com/resources/ Here's an excerpt from that article: "Hazard insurance does not give a dollar per dollar value for anything below ground. Rather, the industry standard is anywhere from 20-50 cents on the dollar. The reasoning behind this is that generally anything below ground is protected (from perils such as tornados, wind, hail, etc.) and unlikely to sustain damage. Thus, a hazard insurance value is not a true reflection of what it takes to rebuild a property. When you talk about floods; however, they are a truly unique hazard. Floods often cause damage to foundations, wipe out basement walls, etc. So, when you look at obtaining flood insurance it makes sense that the amount of flood insurance should at least be the same or even more than the hazard insurance on a particular property."
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#2128841 - 05/02/17 06:52 PM
Re: Force Placement Sample Letter
ComplianceGrl15
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New Poster
Joined: Mar 2017
Posts: 15
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Thank you for the clarification! We did attend one of your sessions recently and learned that there were other insurable values we should be considering. I guess I need to revisit my notes so that it will sink in!!
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