We have an applicant who wants to do a 2nd lien for debt consolidation. Their dwelling is located in a SFHA and coverage is in place however the 1st lien holder is not escrowing for flood insurance. If we do the subordinate financing (closed end), we would have to establish an escrow account, correct? I see the subordinate financing exemption but I'm wondering if that's assuming the 1st lienholder is already escrowing for flood??