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#2096513 - 09/01/16 12:46 PM Notice of Property NOT in Flood zone
mdog76 Offline
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I can't find it anywhere that says its required by regulation that the "Notice of Property Not in Flood Zone Area" be signed by the customer. Does anyone understand this differently?

Thank you.

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Flood Compliance
#2096520 - 09/01/16 01:13 PM Re: Notice of Property NOT in Flood zone mdog76
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
You can't find it because no such regulatory requirement exists..
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#2096522 - 09/01/16 01:21 PM Re: Notice of Property NOT in Flood zone mdog76
mdog76 Offline
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That's what I thought. Its not required to be signed by the customer.

Thank you.

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#2096524 - 09/01/16 01:24 PM Re: Notice of Property NOT in Flood zone mdog76
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
It's not required at all.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2096700 - 09/01/16 08:36 PM Re: Notice of Property NOT in Flood zone mdog76
David Dickinson Offline
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David Dickinson
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Central City, NE
Let me emphasize what Dan is saying: WHY would you give this? There is no regulatory notice that says "you're property is not in a SFHA" and there's a potential risk that if you're wrong, now you put it in writing. Don't borrowers get enough "stuff" already? We don't need to create more forms especially when t's not required by regulation or any other civil liability justification.
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#2096791 - 09/02/16 03:40 PM Re: Notice of Property NOT in Flood zone mdog76
mdog76 Offline
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Posts: 645
This disclosure prints off with the flood determination from our flood provider. Ha it really makes no sense to give this to the customer.

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#2096802 - 09/02/16 04:07 PM Re: Notice of Property NOT in Flood zone mdog76
DoubleNickel Offline
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Joined: Jan 2013
Posts: 25
The disclosure also prints with our flood determinations and we have the borrower sign at closing. We started this a couple of years ago when it was determined a property was in a flood zone requiring flood insurance on a loan that had been on our books for 2 years. The borrower refused to purchase flood insurance because he said we never told him if the property ever became mapped in a designated flood area, he would have to have it. We force-placed and charged him. The disclosure has the following verbiage: "If, during the term of your loan, the subject property is identified as being in a Special Flood Hazard Area, we may, at our option, require that you purchase and maintain flood insurance at your expense. Upon notice, and after failure to comply, flood insurance will be force placed at your expense." Now if they say we never told them, we have the signed disclosure.

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#2096805 - 09/02/16 04:13 PM Re: Notice of Property NOT in Flood zone mdog76
mdog76 Offline
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I found an old thread from 2008 discussing this same issue and there were certainly differing opinions about this.

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#2096818 - 09/02/16 04:45 PM Re: Notice of Property NOT in Flood zone mdog76
rlcarey Online
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rlcarey
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Galveston, TX
The borrower refused to purchase flood insurance because he said we never told him if the property ever became mapped in a designated flood area, he would have to have it.

It should already be in the deed of trust or mortgage and if it is not, it should be:

FNMA DOT:

5. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term “extended coverage,” and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender’s right to disapprove Borrower’s choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower.

If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender’s option and Borrower’s expense.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2096820 - 09/02/16 04:56 PM Re: Notice of Property NOT in Flood zone mdog76
mdog76 Offline
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But if that was to happen where a property is zoned into a hazard area after a loan is consummated, wouldn't you send notice to the borrower anyway and explain per regulation and law, you must carry flood insurance?

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