Ok, thanks again for the feedback. It is always very helpful. We have a meeting set up to discuss our letters and the flood process. There were several steps that could be revised to eliminate this issue going forward. Hopefully after the changes the issues will be resolved going forward.

So if the bank force places insurance on the day the policy expires and the customer comes in on the 35th day, after notification, to bring in his flood coverage, does the bank have to eat the force placed premium that's already in place or can we still charge the customer on the 46th day for coverage that we placed?

You can force place on day 1. If the borrower brings in a policy, you can charge them for the time they were not covered by their policy. Nothing more and nothing less. Most forced placed flood insurance providers will allow retro-active cancellation by the lender.

And if your vendor does not allow retro-active cancellation, it might be time to go shopping for a new vendor...