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#2057299 - 01/07/16 10:44 PM Obligation to verify 1st lien holder is escrowing
Ninky Offline
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Ninky
Joined: Nov 2002
Posts: 357
Are we required to verify that the 1st lien holder on a 1st lien originated after 1/1/16 is escrowing for flood insurance? Or is the mere fact that we are in a subordinate lien position exempt us from the escrow requirement?

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Flood Compliance
#2057300 - 01/07/16 10:45 PM Re: Obligation to verify 1st lien holder is escrowing Ninky
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
If you have a subordinate lien, you do not have a requirement to escrow - even if the 1st lien holder fails to do so.
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David Dickinson
http://www.bankerscompliance.com

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#2057301 - 01/07/16 10:46 PM Re: Obligation to verify 1st lien holder is escrowing Ninky
Ninky Offline
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Ninky
Joined: Nov 2002
Posts: 357
Excellent. Thank you for the confirmation!!!!

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#2069980 - 03/18/16 05:28 PM Re: Obligation to verify 1st lien holder is escrowing Ninky
NSF, CRCM Offline
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NSF, CRCM
Joined: Apr 2013
Posts: 410
VA
I want to tag on to this thread with a similar question.

Lets say the loan secured by the 1st lien is with our bank and was done back in 2014. We have sent the option to escrow letter to the customer and they choose not to escrow.

Then we make a loan secured by a subordinate lien and know that there is no escrow for flood.

Would we be required to escrow for flood in this instance?
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It is better to act cautiously beforehand than to suffer afterward.

The answers I give are my opinions. Not legal advice.

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#2070109 - 03/19/16 10:50 PM Re: Obligation to verify 1st lien holder is escrowing Ninky
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
No. The loan you recently made is a subordinate lien. That loan is exempt from the escrow requirement.
_________________________
David Dickinson
http://www.bankerscompliance.com

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