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#1614223 - 10/10/11 05:41 PM Map change-no longer in zone
shewwes Offline
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Joined: May 2010
Posts: 6
Our customers have been notified by the city that due to recent flood map changes their properties may no longer be in a zone that requires flood insurance. In response to the letter, our customers are contacting us requesting to drop their flood insurance and our flood vendor informed us that they have 60 days to provide us with the notification of those borrowers that are affected.

Do we have options (request a re-determination, order new determination, wait for notification from flood vendor)?

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Flood Compliance
#1614230 - 10/10/11 06:07 PM Re: Map change-no longer in zone shewwes
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
If you know the buildings are no longer in a SFHA, you can drop the insurance. You pay the vendor to make these determinations, so I would think it would be best to wait for their confirmation, but you certainly have the options you listed.

I'm not certain, but I would think FEMA would give a refund back to the map change date, just like they do if a property is determined to be out of a SFHA from a LOMA.
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#1616361 - 10/17/11 03:27 PM Re: Map change-no longer in zone David Dickinson
NE Wx Forecast - Frosty Offline
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NE Wx Forecast - Frosty
Joined: Mar 2011
Posts: 442
SE, Nebraska
The city of Lincoln recently updated their data as a result of work on a flood control project and we were given of copy of the file that the engineers develop. We gave that copy to Lereta (our flood vendor) and they gave us a determination on our questioned property that same day. Added....this was a case where the city did not submit their paperwork to FEMA on time in order to make Federal Register publication. But they had the enineering data ready to go, so Lereta accepted it.
Last edited by Cornhusker; 10/17/11 09:26 PM.
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#1629451 - 11/16/11 10:13 PM Re: Map change-no longer in zone NE Wx Forecast - Frosty
one of three Offline
Member
Joined: Jan 2006
Posts: 53
NJ
If you don;t have LOL on your portfolio how do you ensure that updates to the flood map are acted on?

Does a bank have an oligation to monitor it;s portfolio?

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#1742151 - 09/19/12 04:15 PM Re: Map change-no longer in zone David Dickinson
ynot Offline
Member
Joined: Sep 2011
Posts: 81
Florida
A LOMA effective date is the date the LOMA is completed by FEMA, correct?

If the customer has flood insurance (policy period 1/1/12 to 1/1/13) and the customer has applied for a LOMA, and FEMA grants them a LOMA effective 7/1/12, can the lender waive the insurance requirement effective as of 1/1/12? or would the effective date of the insurance cancellation be 7/1/12, the date of the LOMA?

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#1742162 - 09/19/12 04:21 PM Re: Map change-no longer in zone shewwes
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,234
Galveston, TX
How can you waive an insurance requirement prior to the date of the LOMA from a bank standpoint. Without a LOMA, you had to require insurance. I'm not sure of your question.
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#1742192 - 09/19/12 05:06 PM Re: Map change-no longer in zone shewwes
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,762
Bloomington, IN
The bank can only waive insurance from the date insurance is no longer required.

However, if a LOMA is issued the borrower should get a full refund of the premium, but that is between them and their insurance agent.

I'm at another branch this week so I don't have the link to the document in the favorites on this PC but search FEMA's Web page using CANCELLATION/NULLIFICATION as the search term. Then look for:

19. Insurance No Longer Required by the
Mortgagee Because the Structure Has
Been Removed from the Special Flood
Hazard Area (SFHA) by Means of Letter
of Map Amendment (LOMA) or Letter of
Map Revision (LOMR). (TRRP reason 20)

You will find within that section the following:

. . . .the policy
can be canceled provided the lender
confirms in writing that the insurance is no
longer required because the property was
removed from the SFHA. A copy of the
LOMA or LOMR must accompany this
request. . . .

Type of Refund: Full

Years Eligible for Refund: Current year
and, if applicable, 1 prior year provided
no claim has been paid or is pending
during the policy year that is being
canceled

Cancellation Request: Must be received
during the policy year or within 6 months
of the policy expiration date

Documentation: Statement from mortgagee
that flood insurance is no longer
required because the property was
removed from the SFHA, and a copy of
the LOMA/LOMR
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The opinions expressed are mine and they are not to be taken as legal advice.

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