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.