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!

I'm not sure I fully understand your question, but the flood notice is only required when you have a MIRE event.

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?

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.

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?

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.

But there's nothing to fix.



But you don't.

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

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!

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.

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.

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.

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.