A loan with a small balance is being charged off due to delinquency. The collateral property is in SFHA and the bank has force-placed the insurance previously. The balance is so small ($2,300) that the bank will not foreclose on the real property but is leaving the lien on file.
Is the bank required to maintain the force-placed flood insurance policy as long as the lien is in place?
Is there anywhere that discusses this in any handbooks? In the OCC Comptroller's Handbook, there is no reference to this scenario - OREO properties and active loans are discussed.
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