Borrower's property was recently put into flood zone due to map changes in our area. Bank became aware of this and notified customer via a written letter on January 5. The letter states that customer has 45 days to obtain flood insurance or we will force place. 45th day is on a weekend, so it rolls to Feb. 20 (Monday). Bank just received a copy of the borrower's flood insurance policy and it states the effective date of insurance is Feb. 26. Now what?

Close enough.

Thanks for the prompt response rlcarey. So is "close enough" good enough though or will examiners cite a violation here? Should we attempt to contact insurance provider to see if the effective date can be changed? Is there something in the regulation that supports your "close enough" response? We can't afford to get our hand slapped regarding flood. Thanks!

Your call, but I don't see any real reason to force place insurance for 6 days. You are correct in that there should have been no wait on the flood policy. Your customer should be the one dealing with their insurance agent and not the bank.

No penalty for a reasonable gap in coverage.

You are correct in that there should have been no wait on the flood policy.

The post doesn't give the expiration date of the policy, only that they sent the force place letter on Jan. 5th. If the borrower did not renew the policy within the 30 day grace period then there would be a 30 day wait period for the new policy to become effective. If the policy was renewed within the 30 day grace period then I agree there should have been no wait period.

With the Christmas and New Years holidays the policy very will could have expired 12/22 (as example) and they (the bank) did not get the notice until 1/3 and mailed the letter on 1/5. If the policy expired on 12/22 the grace period expired on 1/21. If the new policy is effective 2/26 that means the borrower did not renew the policy until 1/27, after the grace period expired.

Dan - it was a property that was freshly mapped into a SFHA - unless I misunderstood the OP.

My mistake. I glanced right over that part. In that case there should have been no wait period.

I think the point of this is "what are you going to do?" Are you going to force place for 6 days? I wouldn't. I would, however, contact the borrower or agent to find out why the policy isn't effective until the 26th. Maybe it's just an administrative error. You can force place for 6 days. However, another way to look at it is the borrower purchased the insurance within the 45 day window you gave them and the law affords.

When calculating the 46th day to force place, do you include the date the notice was mailed?

How you count the 45 day period to include that drop dead date in your letter is up to you. Most people count forward. You force place the business day after the letter expires.