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#2155807 - 12/01/17 10:49 PM Flood Letters-not charging
Bec Offline
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Bec
Joined: Jul 2010
Posts: 1,114
The Great White North
Ran into a situation where we realized that a loan renewal included new money and the coverage became inadequate. We would like to have the difference force placed while the lender works with the borrower to get the coverage up to the necessary amounts. If we force place but do not intend on charging the borrower any of the premium, can we bypass sending them the notification letters?
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Flood Compliance
#2155810 - 12/01/17 11:16 PM Re: Flood Letters-not charging Bec
Andy_Z Offline
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Andy_Z
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On the Net
Hopefully David will chime in. Procedures were already violated and you're under-insured now, but rather than use the term force place, the bank is going to pay for the policy. I'd say the bank buys a policy with no intent of passing that fee on, and has adequate coverage, there are no letters to send. The purchase is because the bank is trying to make right the error, in hopes the borrower will increase the policy allowing the bank to cancel the add'l coverage it bought.
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#2155812 - 12/01/17 11:59 PM Re: Flood Letters-not charging Bec
Bec Offline
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Bec
Joined: Jul 2010
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The Great White North
Ohhh, I like how you said it better!
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#2155824 - 12/02/17 09:59 PM Re: Flood Letters-not charging Bec
rlcarey Online
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rlcarey
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Galveston, TX
Force placing the difference is going to be tricky. If they have a NFIP - you can't use an NFIP force placement policy. If you are using private force placed insurance, then you are going to have to buy a force placed policy with a deductible equal to their current flood policy. As far as the notification process - late or not, I think it still needs to be done.
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#2155834 - 12/03/17 06:47 PM Re: Flood Letters-not charging Bec
David Dickinson Offline
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David Dickinson
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Central City, NE
I agree with Randy that you still need to provide notification to the borrower. The regulations require it. I see no exemption that says "if the lender purchases the insurance for the borrower, you can skip the notification requirements". I would write a letter that explains what happened so it makes sense to the borrower.
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