Skip to content
BOL Conferences
Thread Options
#2181978 - 06/15/18 06:29 PM Forced Placed and Imminent Payoff
Antilles Offline
100 Club
Antilles
Joined: Jan 2007
Posts: 227
Southern US
I believe I know the answer but a second opinion is always good.
A customer received a 45 day notice because of a map change We have not received an insurance policy because he communicated with the lender that the loan will be paid within the next week as he has sold the property. The 45 day time limit is up on Friday. Should we still force place the flood insurance on Friday if he has not paid it off by then? Even if his closing is set for the Monday afterwards.
_________________________
"Success is going from failure to failure without a loss of enthusiasm." - Sir Winston Churchill

Return to Top
Flood Compliance
#2181982 - 06/15/18 06:35 PM Re: Forced Placed and Imminent Payoff Antilles
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,364
Galveston, TX
Yes
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2181988 - 06/15/18 07:08 PM Re: Forced Placed and Imminent Payoff Antilles
Antilles Offline
100 Club
Antilles
Joined: Jan 2007
Posts: 227
Southern US
That was what I was thinking. Thank you for the confirmation.
_________________________
"Success is going from failure to failure without a loss of enthusiasm." - Sir Winston Churchill

Return to Top
#2182061 - 06/18/18 02:47 PM Re: Forced Placed and Imminent Payoff Antilles
RVFlyboy Offline
Power Poster
RVFlyboy
Joined: Oct 2000
Posts: 5,991
Soaring over Georgia
Well, it depends on what your real question is. If your question is "Will I have a flood violation if I don't force coverage by Friday, even if the sale is scheduled to close on the following Monday?", then I agree with Randy's "Yes". But if your question is "Can we live with the risk of non-placement on Friday with a sale scheduled to close on the following Monday, my question to question in response would be, "What's your risk tolerance?" Are you taking a risk in not forcing the coverage? Yes, absolutely. You have both a risk of a flood event that would damage the property without adequate coverage and you have the risk of a regulatory violation that could include civil money penalties. If management is comfortable with accepting those risks in order to not place the coverage, then it's certainly within their ability to do that.
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions

Return to Top
#2182074 - 06/18/18 03:26 PM Re: Forced Placed and Imminent Payoff Antilles
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
Jim makes a good point, though I thought I would point out that I have seen instances where this backfires. For example, I ran across a file several years back where management had waived flood coverage as a loan was to be paid off within a few weeks. I was reviewing the loan a few years after the memo in file and the loan still wasn't paid off... and flood coverage was still waived.

It does come down to your risk tolerance and management is free to make any decision they are comfortable with - they just aren't free to avoid consequences that may result from that decision.
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top