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#2193566 - 09/24/18 05:27 PM New Determination Needed?
George Offline
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Joined: Apr 2016
Posts: 364
Have a loan where the customer is assuming another loan from their parents (i.e. the original loan is being transferred). The original flood determination is less than 7 years old, but we are technically making a new loan to a different customer. A new determination should have been ordered, correct?

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Flood Compliance
#2193578 - 09/24/18 06:24 PM Re: New Determination Needed? George
Nicole A Offline
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Joined: Feb 2016
Posts: 41
From the 2011 Interagency Q&A:

68. May a lender rely on a previous determination for a refinancing or assumption of a loan or multiple loans to the same borrower secured by the same property?

Answer: It depends. Section 528 of the Act, 42 U.S.C. 4104b(e), permits a lender to rely on a previous flood determination using the SFHDF when it is increasing, extending, renewing, or purchasing a loan secured by a building or a mobile home. Under the Act, the “making” of a loan is not listed as a permissible event that permits a lender to rely on a previous determination. When the loan involves a refinancing or assumption by the same lender who obtained the original flood determination on the same property, the lender may rely on the previous determination only if the original determination was made not more than seven years before the date of the transaction, the basis for the determination was set forth on the SFHDF, and there were no map revisions or updates affecting the security property since the original determination was made. A loan refinancing or assumption made by a lender different from the one who obtained the original determination constitutes a new loan, thereby requiring a new determination. Further, if the same lender makes multiple loans to the same borrower secured by the same improved real estate, the lender may rely on its previous determination if the original determination was made not more than seven years before the date of the transaction, the basis for the determination was set forth on the SFHDF, and there were no map revisions or updates affecting the security property since the original determination was made.

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#2193584 - 09/24/18 06:49 PM Re: New Determination Needed? George
Adam Witmer Offline
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Joined: Sep 2010
Posts: 2,643
You will want to check with your determination vendor to see if your contract permits reuse of the determination.

Also, from the FDIC Exam Manual:
[i]"Reliance on prior determination. An institution may rely on a prior flood determination, whether or not the security property is located in an SFHA, and it is exempt from liability for errors in the previous determination if:
• The previous determination is not more than seven years old, and
• The basis for the previous determination was recorded on the SFHDF.

There are, however some circumstances in which an institution may not rely on a previous determination, such as:
• If FEMA’s map revisions or updates show that the security property has been remapped into an SFHA, or
• If the lender contacts FEMA and discovers that map revisions or updates affecting the security property have been made after the date of the previous determination.

An institution may also rely on a previous determination, which is not more than seven years old and is set forth on an SFHDF, when it increases, extends, renews, or purchases a loan. The making of a loan is not listed as a permissible event that permits an institution to rely on a previous determination. However, when the loan involves a refinancing or assumption by the same lender who obtained the original flood determination on the same property, the institution may rely on the previous determination, but only if the original determination was made not more than seven years before the date of the transaction, the basis for the determination was set forth on the SFHDF, and there were no map revisions affecting the property since the original determination was made. The same is true for multiple loans made by the same lender to the same borrower secured by the same property. A new determination is required when a loan refinancing or assumption is made by a lender different from the one who obtained the original determination because this constitutes a new loan.
_________________________
Adam Witmer, CRCM

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

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#2193597 - 09/24/18 08:12 PM Re: New Determination Needed? George
George Offline
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Joined: Apr 2016
Posts: 364
However, when the loan involves a refinancing or assumption by the same lender who obtained the original flood determination on the same property, the institution may rely on the previous determination...

So is this telling me I'm OK to not have to obtain a new determination?

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#2193626 - 09/25/18 01:29 AM Re: New Determination Needed? George
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
You are OK to NOT obtaining a new determination.

We have written a position paper entitled "FLOOD: Relying On A Previous SFHDF Article" on this poorly written part of the regulation. You can find it in our Free Lending Tools at our website:
https://store.bankerscompliance.com/#/product/7beb48b7-6e90-43a5-acf0-5d4304c5335b?keyword=
_________________________
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http://www.bankerscompliance.com

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#2204174 - 01/28/19 08:02 PM Re: New Determination Needed? George
CRL Offline
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CRL
Joined: Sep 2003
Posts: 576
Our bank policy allows relying on previous SFHDF when increasing, extending or renewing existing loans in conformance with the requirements of Section 528 of the Act. However, I have now questioned how we are ensuring that "there were no map revisions or updates affecting the security property since the original determination was made." We have relied on our life of loan service to notify us of changes, but now understand we are only notified if the subject property changes in or out of a flood zone, not notified of every map revision.

Is this a problem? If yes, can I ask how others verify if there has or hasn't been a map revision? And if there has been a revision, but it doesn't effect our property, then is it ok to rely on the previous SFHDF?

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#2204177 - 01/28/19 08:18 PM Re: New Determination Needed? George
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,962
Bloomington, IN
We verify the current map using the following link.

https://www.fema.gov/national-flood-insurance-program-community-status-book


If there has been a map revision then you must obtain a new determination.
Last edited by Dan Persfull; 01/28/19 08:19 PM.
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#2204179 - 01/28/19 08:25 PM Re: New Determination Needed? George
Dan Persfull Offline
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Dan Persfull
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Posts: 46,962
Bloomington, IN
If there has been a map revision then you must get a new determination regardless if the change affected the property securing the loan.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2204187 - 01/28/19 08:34 PM Re: New Determination Needed? George
CRL Offline
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CRL
Joined: Sep 2003
Posts: 576
Thanks Dan! So just to be clear, on the website you referenced, if the "Effective Current Map Date" is AFTER the date of my previous SFHDF, then I need a new determination?

While researching I found this website, which is property specific: https://msc.fema.gov/portal/home. It reports revision and amendment dates that appear to be more recent that what is reported for the City on the link you provided? Forgive me for showing my ignorance on these details... appreciate any feedback!

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#2204190 - 01/28/19 08:56 PM Re: New Determination Needed? George
Skittles Offline
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Skittles
Joined: Sep 2002
Posts: 13,963
TN
Not Dan, but yes - if the date of the current map is after your flood determination then a new SFHDF is required.
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#2204316 - 01/29/19 07:28 PM Re: New Determination Needed? George
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,962
Bloomington, IN
CRL, the link you provided is specific to a property address that you can print a map for if you do your own determinations or to check to see if an LOMA/R has been issued for the property.

The link I provided lists the current map information for the cites and counties listed. The listings are updated daily and it is a quicker to reference by the city and county then it is to do so by the specific property.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2219285 - 08/07/19 08:27 PM Re: New Determination Needed? George
Sieglet Offline
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Joined: Feb 2015
Posts: 13
This thread falls in line with a review I am currently working on. I have seen the link that Dan posted and I use that to see if a community is in or out of the program. However I use the link that CRL shows to test our flood map and panel number against what our provider gave us. I am finding quite a few discrepancies between FEMA's link and our provider. The map and panel numbers vary, although most of the time the date of the map is the same. Has anyone else found this to be the case?

David - from your newsletter :
In conclusion, can a financial institution rely on a previous Standard Flood Hazard Determination
Form? Yes, provided the previous determination was:
• Completed by the same financial institution;
• Is less than seven years old;
• The map information is still accurate (no map revision); and,
• It was completed on a Standard Flood Hazard Determination Form.
In other words, if you already have a Standard Flood Hazard Determination Form and it’s still accurate
and it’s less than seven years old, you don’t need to prepare another one.

If the map and panel number are the same however the map has been updated and has a new effective date, would the date change alone constitute a new flood determination? I couldn't find anything that specific in the regulation.

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#2219297 - 08/07/19 10:15 PM Re: New Determination Needed? George
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,935
Galveston, TX
The panel number would not be the same. When a map is updated, the panel's suffix goes from A to B to C to, etc.
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