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#1768879 - 12/19/12 05:05 PM Charge Force Place Policy to Borrower?
deh Offline
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Is this something that has been finalized?

We have an existing loan that received a notice from the NFIP stating a map revision has caused the property to now be in a flood zone. We sent the notice out 45 days ago and are now ready to force place as the borrower's are obtaining an elevation certificate to prusue a LOMA. If we can charge them for force placed policy that would be preferred. smile

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#1768887 - 12/19/12 05:10 PM Re: Charge Force Place Policy to Borrower? deh
rlcarey Online
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rlcarey
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Galveston, TX
They need to get insure and provide you with proof within 45 days or you force place. They can buy a policy now and if they get a LOMA, the premium would be refundable.
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#1768894 - 12/19/12 05:22 PM Re: Charge Force Place Policy to Borrower? deh
deh Offline
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They didn't purchase and were fighting it. Before we can force place I thought we still had to provide the 45 notice on revised map changes. So are you saying we can charge them for the Force Placed policy?

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#1769008 - 12/19/12 08:32 PM Re: Charge Force Place Policy to Borrower? deh
rlcarey Online
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rlcarey
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Galveston, TX
You send them the 45 day notice and if they don't produce a policy, then you would force place and charge. You said you sent the notice 45 days ago, you should have force placed on day 46.
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#1769045 - 12/19/12 09:24 PM Re: Charge Force Place Policy to Borrower? deh
deh Offline
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Yes, we are force placing. We asked for the quote on day 46 but did not get it until today, day 47. We are including all our documentation in the file to show our quote attempts.

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#1769139 - 12/20/12 01:15 PM Re: Charge Force Place Policy to Borrower? deh
rlcarey Online
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rlcarey
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Galveston, TX
Day 46 - day 47, I would either is acting in the timely manner.
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#1771964 - 01/03/13 04:05 PM Re: Charge Force Place Policy to Borrower? deh
Darty Offline
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Joined: Oct 2003
Posts: 82
CT
When you do force place and charge the borrow which would be the more acceptable practice - capitalize or add a fee to the loan.

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#1772079 - 01/03/13 06:16 PM Re: Charge Force Place Policy to Borrower? deh
rlcarey Online
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rlcarey
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Galveston, TX
Depends on your contract and State law.
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#1786145 - 02/14/13 04:59 PM Re: Charge Force Place Policy to Borrower? rlcarey
ynot Offline
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Joined: Sep 2011
Posts: 81
Florida
Same scenario as above, flood map change on existing loan.

Is the force place policy effective on day 46 or day 1?

Meaning, if the borrower does not obtain flood insurance within the 45 days, can we retroactive the force place policy to day 1? or would the force place policy have an effective date on the 46th day?

i.e. 45 day notice sent on 1/1/13, on 2/15/13 (46th day) we force place with a policy effective date of 1/1/13 - 1/1/14 (retro) and the premium will cover the initial 45 days.

OR we force place with a policy effective date of 2/15/13 (46th day) - 2/15/14, the initial 45 days is not covered.

What is the industry standard?

Thank you for your help!

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#1786203 - 02/14/13 05:52 PM Re: Charge Force Place Policy to Borrower? ynot
Libby M. Offline
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Mississippi, USA
I believe you'd be hard pressed to find an insurance company willing to back date a policy to 45 days ago. Our force placed policies are always effective on the date we purchase them - day 46.
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#1786487 - 02/15/13 03:29 AM Re: Charge Force Place Policy to Borrower? deh
rlcarey Online
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rlcarey
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Galveston, TX
Current regulatory guidance does not allow a bank to charge the borrower during the period between the previous policy expiration and the expiration of the 45 day notice. Since there was no policy that expired, in this case, you can force place whenever you want, but you can't start charging the borrower until the 45 day letter expires.
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