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#2193726 - 09/25/18 06:39 PM
7 Years are Up: New SFHDF, & Signature on Notice?
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Gold Star
Joined: Mar 2013
Posts: 266
Northern IL
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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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#2193731 - 09/25/18 06:51 PM
Re: 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker
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Power Poster
Joined: Sep 2010
Posts: 2,658
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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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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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#2193733 - 09/25/18 06:52 PM
Re: 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker
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10K Club
Joined: Jul 2001
Posts: 83,368
Galveston, TX
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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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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2193739 - 09/25/18 07:01 PM
Re: 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker
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Gold Star
Joined: Mar 2013
Posts: 266
Northern IL
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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 07:07 PM
Re: 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker
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Power Poster
Joined: Sep 2010
Posts: 2,658
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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 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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#2193744 - 09/25/18 07:07 PM
Re: 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker
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10K Club
Joined: Jul 2001
Posts: 83,368
Galveston, TX
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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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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2193745 - 09/25/18 07:07 PM
Re: 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker
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Platinum Poster
Joined: Jun 2014
Posts: 566
Petersburg, VA
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not my creation, but mine to fix But there's nothing 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?" 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 07:30 PM
Re: 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker
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Gold Star
Joined: Mar 2013
Posts: 266
Northern IL
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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 08:18 PM
Re: 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker
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10K Club
Joined: Nov 2000
Posts: 18,762
Central City, NE
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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 01:28 PM
Re: 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker
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Gold Star
Joined: Mar 2013
Posts: 266
Northern IL
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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 02:22 PM
Re: 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker
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10K Club
Joined: Jul 2001
Posts: 83,368
Galveston, TX
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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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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2193822 - 09/26/18 02:43 PM
Re: 7 Years are Up: New SFHDF, & Signature on Notice?
CountryBanker
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Power Poster
Joined: Sep 2010
Posts: 2,658
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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. www.compliancecohort.com
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