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#2178402 - 05/16/18 07:50 PM How much coverage?
George Offline
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Joined: Apr 2016
Posts: 364
Have kind of a unique situation:

- Loan originated, flood determination showed to be in a flood zone. Flood application was rated for the correct zone. However, when policy officially issued, the zone changed to X. We decided to force place due to inadequate coverage.
- Private flood policy has now expired, but force placed policy is still in effect. We are preparing the 45 day notice to send out, but am unsure on how much coverage to say is needed. Do we ignore the force placed policy and advise that the max amount of coverage is required (loan is commercial and amount is above $500M)?

Thank you for your help!

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Flood Compliance
#2178405 - 05/16/18 07:55 PM Re: How much coverage? George
rlcarey Online
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rlcarey
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Galveston, TX
If the coverage was adequate but it was a zone mismatch, you should have followed Q&A 71 & 72 and not forced placed to begin with:

https://www.bankersonline.com/sites/default/files/tools/flood_faq_2011_10_17.pdf
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#2178410 - 05/16/18 08:04 PM Re: How much coverage? George
George Offline
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Right, but it doesn't say not to force place, just to notate the loan so as to not be in violation. Is this implying here that we don't have to force place?

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#2178413 - 05/16/18 08:09 PM Re: How much coverage? George
rlcarey Online
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rlcarey
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Galveston, TX
As long as you follow all the steps required and document it, you are done.
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#2178418 - 05/16/18 08:14 PM Re: How much coverage? George
George Offline
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OK, so we cancel the force placed policy per the Q&A, and send out the 45 day notice requiring a full $500 coverage policy? When does the inadequate coverage come in to play then, just when the actual coverage amount is less than it should be?

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#2178428 - 05/16/18 08:43 PM Re: How much coverage? George
rlcarey Online
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rlcarey
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Posts: 83,226
Galveston, TX
Correct. So you followed all of the guidance originally? And you got no response from the agent or insurance company? And you absolutely double checked your determination?
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#2178429 - 05/16/18 08:57 PM Re: How much coverage? George
George Offline
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Joined: Apr 2016
Posts: 364
Yes sir! I did receive response from the agent that they are looking into it, but that's all.

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