Good Morning,

I am aware that we can accept an NFIP Flood Insurance Application to close a loan.

Lender Place Insurance was mailed to the borrower

Should we accept an NFIP Flood Insurance Application in Mortgage Servicing as proof of coverage?

If we do not accept this as proof of flood coverage, are violating any part of the flood insurance regulations?

Thanks

1. Yes, with proof of premium payment.

2. I have no idea what this means.

Sorry,

A Lender-Placed Insurance (Force-Placed) letter was mailed to the borrower.

As proof of insurance coverage, the borrower sent us an NFIP Flood Insurance Application and proof of payment.

Should we accept this as proof of coverage?

If we do not accept this as proof of flood coverage, are violating any part of the flood insurance regulations?

Hope this helps.

Here's an excerpt from our Flood Insurance training manual on this topic:

2. Force Placed Overlapping Policy Refunds [§339.7(b)]:

a. Confirmation of Insurance:

i. Declaration Page Confirmation:
A bank …shall accept from the borrower an insurance policy declarations page that includes the existing flood insurance policy number and the identity of, and contact information for, the insurance company or agent. [§339.7(b)(2)]

ii. Other Acceptable Confirmations:
…a declarations page is the one option that a lender must accept, there are circumstances in which a lender can, subject to safe and sound banking practices, accept alternative evidence of insurance documents acceptable to the lender in order to cancel force-placed insurance. [Section-by-Section Analysis §339.7(b)(2)]

You could accept the application (with proof of payment) as Randy points out. That's what 2.a.ii. indicates You could also hold out until you get the declarations page (see 2.a.i. above).

Thanks