You have the choice to force place flood insurance day one when you send the 45 day letter or when the letter expires. If you are waiting to cover the gap after the fact, then I have to ask two questions.
1) Did the property actually flood during the gap and would your insurance company actually pay a claim when you actually bought the policy after the flood event, and
2) if they won't pay, why would you force place after the fact and charge the borrower for it. Smacks of UDAAP to me.
The opinions expressed here should not be construed to be those of my employer: PPDocs.com