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#2020798 - 06/16/15 07:28 PM Purchase of flood ins prior to loan closing
Grinchie Offline
Member
Grinchie
Joined: Apr 2001
Posts: 55
Virginia
Can a financial institution purchase flood insurance for a customer prior to loan closing. The bank would be reimbursed from loan proceeds. My concern: would this be interpreted as force placement prior to loan closing?
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Flood Compliance
#2020815 - 06/16/15 08:15 PM Re: Purchase of flood ins prior to loan closing Grinchie
JWills, CRCM Offline
Diamond Poster
JWills, CRCM
Joined: May 2013
Posts: 1,757
The Mitten State
Why would the bank want to do this? Why can't the customer purchase and 'cash out' the funds back to themselves at closing?
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#2020818 - 06/16/15 08:18 PM Re: Purchase of flood ins prior to loan closing Grinchie
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,844
Bloomington, IN
You are purchasing the flood insurance on the borrower's behalf in order to close the loan. Can you explain to an examiner how that is not force placing the insurance so the loan can close?
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The opinions expressed are mine and they are not to be taken as legal advice.

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