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#1734698 - 08/24/12 02:29 PM Preferred Risk Policy - Incorrect Zone
basilring Gold Star Joined: Mar 2012 Posts: 305 Spartan Country!	We have a customer who is refinancing their loan. We discovered they are now in a flood zone. They got a Preferred Risk Policy which shows they are rated in a flood zone X, and their existing zone is a flood zone X. This is incorrect, they are now in a flood zone A. We held up their closing on the refi until they get the policy corrected and contacted our flood tracking company to start the notification cycle for their current loan. Our flood tracking company refused to do so, because of question 71 and 72 from July 2009. I read these and do not see what they are referring to... so I did more research on preferred policies and found CA 10-13 from the FRB which states "Lenders need not delay closings during this process. Differences between....are not to be considered discrepancies." Help! Do we let the refinance happen, even though the zone is incorrect? How do we get this fixed and not be cited... according to #72, we need to make a "bona fide effort". Do we not put them in the notification cycle for the existing loan? But still track for the discrepancy? Flood always puzzles me.... keeps me guessing! Thanks. Lisa _________________________ Everyone should believe in something. I believe I will head for the beach!
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Flood Compliance

#1734904 - 08/24/12 06:31 PM Re: Preferred Risk Policy - Incorrect Zone basilring
3-2-Go Gold Star Joined: Nov 2008 Posts: 403 East	I would start the notification process and would not finalize any new loans until this was corrected.
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#1737679 - 09/04/12 05:02 PM Re: Preferred Risk Policy - Incorrect Zone basilring
basilring Gold Star Joined: Mar 2012 Posts: 305 Spartan Country!	I was hoping to get answers from a few people on this... hesitant to go either was, since it seems I am getting conflicting info. Thanks! And I do appreciate the response I have received! Happy Tuesday/Monday! _________________________ Everyone should believe in something. I believe I will head for the beach!
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#1737685 - 09/04/12 05:21 PM Re: Preferred Risk Policy - Incorrect Zone basilring
Kathleen O. Blanchard 10K Club Joined: Dec 2000 Posts: 21,293	Originally Posted By: basilring We have a customer who is refinancing their loan. We discovered they are now in a flood zone. They got a Preferred Risk Policy which shows they are rated in a flood zone X, and their existing zone is a flood zone X. This is incorrect, they are now in a flood zone A. We held up their closing on the refi until they get the policy corrected and contacted our flood tracking company to start the notification cycle for their current loan. Our flood tracking company refused to do so, because of question 71 and 72 from July 2009. I read these and do not see what they are referring to... so I did more research on preferred policies and found CA 10-13 from the FRB which states "Lenders need not delay closings during this process. Differences between....are not to be considered discrepancies." Help! Do we let the refinance happen, even though the zone is incorrect? How do we get this fixed and not be cited... according to #72, we need to make a "bona fide effort". Do we not put them in the notification cycle for the existing loan? But still track for the discrepancy? Flood always puzzles me.... keeps me guessing! Thanks. Lisa Is the preferred risk policy grandfathered? http://www.floodsmart.gov/floodsmart/pages/flooding_flood_risks/grandfathering.jsp _________________________ Kathleen O. Blanchard, CRCM "Kaybee" HMDA/CRA Training/Consulting/Mapping The HMDA Academy www.kaybeescomplianceinsights.com
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#1738214 - 09/05/12 08:55 PM Re: Preferred Risk Policy - Incorrect Zone Kathleen O. Blanchard
basilring Gold Star Joined: Mar 2012 Posts: 305 Spartan Country!	No, it is not grandfathered. _________________________ Everyone should believe in something. I believe I will head for the beach!
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#1738239 - 09/05/12 11:48 PM Re: Preferred Risk Policy - Incorrect Zone basilring
rlcarey 10K Club Joined: Jul 2001 Posts: 83,364 Galveston, TX	There is more to PRPs than meets the eye. It takes an in-depth knowledge of the specific rules, when the policy was originally issued, when the map changes went into effect, etc., etc. PRP FAQs: Does this replace grandfathering? Pre-and Post-FIRM buildings mapped into a high-risk area after October 1, 2008 will be eligible for the grandfather rules after the two PRP policy years are completed. To qualify for grandfather rates after the two extended PRP policy years, the grandfathering guidelines must still be met; e.g., pre-FIRM buildings must maintain coverage continuously and have no substantial damage or improvement to be eligible for grandfathering after the PRP extension period is over. _________________________ The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#1738247 - 09/06/12 01:22 AM Re: Preferred Risk Policy - Incorrect Zone basilring
Kathleen O. Blanchard 10K Club Joined: Dec 2000 Posts: 21,293	It is a complex topic. Not for the faint of heart. _________________________ Kathleen O. Blanchard, CRCM "Kaybee" HMDA/CRA Training/Consulting/Mapping The HMDA Academy www.kaybeescomplianceinsights.com
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#1738368 - 09/06/12 02:24 PM Re: Preferred Risk Policy - Incorrect Zone basilring
basilring Gold Star Joined: Mar 2012 Posts: 305 Spartan Country!	Agreed... and I am not sure how to proceed. Our flood vendor will not force place on their existing loan, but will continue to keep them in the notification cycle. And I am fearful of holding up their closing because of the FRB letter I quoted above. It does say in the Q&A if you make a "bona fide effort" you will not be cited, but it is my understanding that examiners do not always practice that thought. If the PRP said X and A, we would be fine... but should we be fussing because it says X and X? _________________________ Everyone should believe in something. I believe I will head for the beach!
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#1739861 - 09/11/12 05:31 PM Re: Preferred Risk Policy - Incorrect Zone basilring
Dodge Gold Star Joined: Mar 2010 Posts: 268	I just received a preferred risk policy today. It's the first one I've seen. The customer is buying a house that is in flood AE but the rate quoted is for flood zone X. The dec page says flood zone AE as the current flood zone, but the rated flood zone is X. Is this acceptable? I haven't done much research on preferred risk policies. The rate that was quoted will only be good for two years, so after two years the rate is will increase? The customer structure is a pre-firm.
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#1739986 - 09/11/12 11:46 PM Re: Preferred Risk Policy - Incorrect Zone basilring
rlcarey 10K Club Joined: Jul 2001 Posts: 83,364 Galveston, TX	Yes, it appears, based on what I have read regarding these PRPs that is how they basically work. _________________________ The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#1741752 - 09/18/12 04:47 PM Re: Preferred Risk Policy - Incorrect Zone Dodge
basilring Gold Star Joined: Mar 2012 Posts: 305 Spartan Country!	I agree that is correct. We have had preferred risk policies before... although extremely rare. And based on the research I did for my issue, that is what I read also. _________________________ Everyone should believe in something. I believe I will head for the beach!
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