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#2033551 - 08/13/15 04:02 PM Flood & Bank Owned Property
HR Banker Offline
Diamond Poster
Joined: Oct 2002
Posts: 1,027
Just verifying that a property in the flood zone must have flood insurance maintained on it even though the bank is the owner due to foreclosure.

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Flood Compliance
#2033555 - 08/13/15 04:19 PM Re: Flood & Bank Owned Property HR Banker
Ski Offline
Platinum Poster
Joined: May 2003
Posts: 639
South Louisiana
From the now defunct "Mandatory Purchase of Flood Insurance Guidelines":

Lender Responsibilities:

The statutory requirements apply when improved real property (that is, a building) or manufactured (mobile) home is taken as security for a loan.

Is there a loan? You stated the Bank owns the property now due to foreclosure. If the property in the SFHA is now OREO, it is a bank asset, so your obligation to have flood insurance comes from a safety and soundness perspective, not compliance.

Just sayin'.

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#2033575 - 08/13/15 05:40 PM Re: Flood & Bank Owned Property HR Banker
Dan Persfull Online
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,645
Bloomington, IN
I agree. The bank is not required to maintain flood insurance on OREO property, although from a S&S perspective it would be advisable.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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