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#2080137 - 05/24/16 07:26 PM Flood status change - Out to In
Katie Offline
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Joined: Oct 2013
Posts: 23
I have a status change that indicated the property was now in a flood zone. The customer has flood insurance already, but it lists zone X. What am I required by regulation to send to the borrower? Is there form language for this somewhere?

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Flood Compliance
#2080262 - 05/25/16 01:35 PM Re: Flood status change - Out to In Katie
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,964
Bloomington, IN
You have to send them the required notice. There is no exception if flood insurance is already in place.

The zone for rating purposes will be grandfathered providing the insurance was in place prior to the map change.

We add the following statement at the top of the notice:

You are being provided this notice due to requirements under Federal regulations.

We are in possession of the necessary flood insurance documentation for your loan renewal and no action is necessary on your part.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2080271 - 05/25/16 01:57 PM Re: Flood status change - Out to In Dan Persfull
Carolina Blue Offline
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Carolina Blue
Joined: Jul 2005
Posts: 958
Lost in a regulatory fog
Reading this made we think of another question. If a loan with a property remapped into a flood zone falls under the escrow rules criteria then would be required to escrow? A map change would not be a MIRE event but want to make sure I'm not missing something.

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#2081027 - 05/27/16 09:27 PM Re: Flood status change - Out to In Katie
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
A map change is not a MIRE event. Therefore, you don't have to escrow the flood insurance. You need to notify and require adequate insurance. That's it.
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David Dickinson
http://www.bankerscompliance.com

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#2081686 - 06/03/16 03:05 PM Re: Flood status change - Out to In Dan Persfull
Katie Offline
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Joined: Oct 2013
Posts: 23
Dan, so would we not need to request the zone be change on the policy?

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#2081754 - 06/03/16 05:36 PM Re: Flood status change - Out to In Katie
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,951
Galveston, TX
The next renewal will show it grandfathered.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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