Situation involves bank having life of loan flood determination coverage and loans were remapped from an A or V zone into an X zone. Flood service provider was sending electronic notification to the bank but bank, due to personnel change, was unaware to check electronic mailbox for zone remapping notification. Bottom line is that a material number of properties were remapped into an X zone 3-5 years ago and the bank never told borrower they were remapped out of A or V zone. Flood Q&As, Q#2, state that "the lender may, by contract, continue to require flood insurance". The contract (note) doesn't seem to allow us to continue to require flood insurance if not in an A or V zone. Any suggestions on my likely options for those borrowers who have been paying flood insurance premiums for a number of years?

Unless you have force placed insurance or otherwise indicated that flood insurance was still required during that time period, what are the damages? The customer had insurance.

Thanks for your response Mr. Carey. Perhaps I'm looking at the issue more from a UDAAP perspective rather than from agency flood regulations. The bank's only indication that flood insurance was still required was their silence on the remapping. From researching threads in past Flood forums, it appears most banks drop the requirement for flood insurance, and notify the borrower in writing, if the area if remapped from an A or V zone into a zone which doesn't require flood insurance. Q&A #2 states that the bank MAY continue to require flood insurance but is far from clear on the issue. A borrower who may have been paying $800 per year for flood insurance on a property that was remapped out of a flood zone 5 years ago may feel as if there was some degree of financial damage. Thanks again.

If they do, then they should first sue their insurance agent for not notifying them of a reduced premium.

I think you are interjecting the bank into the middle of something needlessly, unless you have since caused the borrower harm, i.e., force placed insurance in error.

There is absolutely no requirement for you to tell the customer that they have been mapped out of a zone just as there is no requirement for you to have completed a life of loan determination in the first place.

Let a sleeping dogs lie, or notify them now if you want to open that can of worms.