Thread Options
#2048301 - 11/05/15 07:06 PM over collaterlized
Patricia Offline
Gold Star
Joined: Mar 2011
Posts: 327
Kansas
The bank made a loan that includes RE properties not located in a flood zone and a property that is in a flood zone. The value of the properties not in a flood zone alone cover the loan amount. So my question is even though part of the collateral for this loan is a property located in a flood zone does the bank still need to have proof of flood insurance? I am thinking yes. Right?

Return to Top
Flood Compliance
#2048303 - 11/05/15 07:18 PM Re: over collaterlized Patricia
Jade'sFire Offline
Gold Star
Jade'sFire
Joined: Apr 2012
Posts: 369
Yaven IV
You would be required to have proof of coverage even if the collateral is taken in an abundance of caution.
_________________________
"It's time for the Jedi to end."
Luke Skywalker

Return to Top
#2048305 - 11/05/15 07:21 PM Re: over collaterlized Patricia
Jade'sFire Offline
Gold Star
Jade'sFire
Joined: Apr 2012
Posts: 369
Yaven IV
In a perfect world, you should have had proof of coverage for the property and the required flood notice delivered to the borrower prior to the loan closing. You cannot MIRE a loan with out proper coverage.
_________________________
"It's time for the Jedi to end."
Luke Skywalker

Return to Top
#2048336 - 11/05/15 08:34 PM Re: over collaterlized Patricia
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
The value of the properties not in a flood zone alone cover the loan amount.
The problem with this logic is that you're thinking about your exposure. You don't get the option to decide if you want insurance or not. Flood Insurance is not about you/the lender. You are the gatekeeper to require people pay in to the governmental insurance program. Much like the Affordable Care Act.
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top