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#2193726 - 09/25/18 02:39 PM 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker Offline
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Registered: 03/27/13
Posts: 211
Loc: Northern IL
Is it true that once you pull a SFHDF for a loan and you're flood-positive, any new form you pull because the 7-year timer expires also has to be signed? Someone is trying to justify the fact it's not a MIRE event when a SFHDF simply expires that they don't need the new form signed, and the original covers you. In a 30-year mortgage, you might have multiple SFHDFs, I can't imagine it's OK for all but the oldest one to have a corresponding signed Notice.

I couldn't find this question answered specifically when I searched the history. Thanks!
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Flood Compliance
#2193731 - 09/25/18 02:51 PM Re: 7 Years are Up: New SFHDF, & Signature on Notice? [Re: CountryBanker]
Adam Witmer Online
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Registered: 09/21/10
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I'm not sure I fully understand your question, but the flood notice is only required when you have a MIRE event.
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#2193733 - 09/25/18 02:52 PM Re: 7 Years are Up: New SFHDF, & Signature on Notice? [Re: CountryBanker]
rlcarey Online
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A FHD never expires unless there is a MIRE event. Why would you be pulling additional FHDs on a 30 year loan when no MIRE event occurs?
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#2193739 - 09/25/18 03:01 PM Re: 7 Years are Up: New SFHDF, & Signature on Notice? [Re: CountryBanker]
CountryBanker Offline
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Registered: 03/27/13
Posts: 211
Loc: Northern IL
Found during internal audit, not my creation, but mine to fix. Their justification is "we have to pull a new one if the old one expires, even if to verify NOTHING CHANGED. So why not put the new one in the file?" Not trusting the vendor's LoL coverage either, I guess.
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#2193743 - 09/25/18 03:07 PM Re: 7 Years are Up: New SFHDF, & Signature on Notice? [Re: CountryBanker]
Adam Witmer Online
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Registered: 09/21/10
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Originally Posted By CountryBanker
Their justification is "we have to pull a new one if the old one expires, even if to verify NOTHING CHANGED.

This is what LoL coverage is for - and LoL coverage isn't even a Reg requirement. Technically, they are permitted to pull a new SFHDF as a matter of risk, but it seems pointless if you have LoL coverage. I would ask who's policy this is and attempt to change it. If they don't trust the flood vendor, why not get a new one?
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Adam Witmer, CRCM

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#2193744 - 09/25/18 03:07 PM Re: 7 Years are Up: New SFHDF, & Signature on Notice? [Re: CountryBanker]
rlcarey Online
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Registered: 07/16/01
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The fix is to stop the practice of pulling new FHDs. Unless there is a MIRE event as Adam said, you have no requirement to get a new Notice to Borrower signed regardless of what you do. If that is what they are saying, have them give you the citation.
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#2193745 - 09/25/18 03:07 PM Re: 7 Years are Up: New SFHDF, & Signature on Notice? [Re: CountryBanker]
burke116 Offline
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Registered: 06/23/14
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Loc: RVA
Quote:
not my creation, but mine to fix


But there's nothing to fix.

Quote:
Their justification is "we have to pull a new one if the old one expires, even if to verify NOTHING CHANGED. So why not put the new one in the file?"


But you don't.

I would be pushing back hard on this. Banks have enough processes without adding pointless ones.

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#2193754 - 09/25/18 03:30 PM Re: 7 Years are Up: New SFHDF, & Signature on Notice? [Re: CountryBanker]
CountryBanker Offline
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Registered: 03/27/13
Posts: 211
Loc: Northern IL
That's my role, the new 'pusher'
They might get it if they see IRE as the only trigger to pull a new flood cert.

"How old can a SFHDF be?"
Old. Unless your vendor notifies you of a change (in-to-out, out-to-in) OR there's an IRE event, let the original form & signed Notice stand.

And I think the vendor supplies a new SFHDF when a map or zone change occurs, saving the trouble of pulling another one.

Thanks again, all!
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#2193765 - 09/25/18 04:18 PM Re: 7 Years are Up: New SFHDF, & Signature on Notice? [Re: CountryBanker]
David Dickinson Offline
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The comments above are correct. Allow me to clarify: A SFHDF never expires for the loan it was created to verify. The 7 year rule is for subsequent loans. IF you make, increase, renew, extend a subsequent extension of credit, you can look to the "old" SFHDF and possibly still use it. If it's more than 7 years old, you can't.

If you made me a 30 year loan in 1997 and completed a SFHDF at that time, it is good for the entire term of that loan (30 years). You never have to renew the original SFHDF for that loan - as long as you don't increase, renew or extend that loan.
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#2193809 - 09/26/18 09:28 AM Re: 7 Years are Up: New SFHDF, & Signature on Notice? [Re: CountryBanker]
CountryBanker Offline
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Registered: 03/27/13
Posts: 211
Loc: Northern IL
And just to be certain, as I've found in another thread in this forum, the only event that would also trigger a new Notice to be delivered would be a Map Change. The 'out-now-in' change certainly needs a new Notice.

But would it be correct to also say that if the before & after Map Change still leaves the collateral in Zone AE, that's not a reason for a new Notice? I see a few of these in the sample, for 30-yr mortgages closed prior to a 2010 Map revision. Loan Ops has taken the vendor's "Hey, Map Change!" notification to mean get a new Notice signed.
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#2193819 - 09/26/18 10:22 AM Re: 7 Years are Up: New SFHDF, & Signature on Notice? [Re: CountryBanker]
rlcarey Online
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Registered: 07/16/01
Posts: 67875
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If you have notice that they moved into a SFHA - then the notice is required along with the request for the proper insurance. A new notice is also required on any IRE regardless of a change in flood zone status if they are in a SFHA. Those are the only time a new notice needs to be provided.
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#2193822 - 09/26/18 10:43 AM Re: 7 Years are Up: New SFHDF, & Signature on Notice? [Re: CountryBanker]
Adam Witmer Online
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Registered: 09/21/10
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Originally Posted By CountryBanker
And just to be certain, as I've found in another thread in this forum, the only event that would also trigger a new Notice to be delivered would be a Map Change.

There has also been debate (and promised upcoming guidance) on whether adding a force-placed premium to the loan balance is a MIRE event, triggering a new notice. A joint letter to the ABA in May of 2017 explains that if a premium is added to a loan balance and the contract between the parties (i.e. promissory note) does not specifically allow for this, it would be a MIRE event.
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Adam Witmer, CRCM

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