Flood Q & A 7 reads: Is a lender required to perform a review of its, or of its servicer’s, existing loan portfolio for compliance with the flood insurance requirements under the Act and Regulation?
Answer: No. Apart from the requirements mandated when a loan is made, increased, extended, or renewed, a regulated lender need only review and take action on any part of its existing portfolio for safety and soundness purposes, or if it knows or has reason to know of the need for NFIP coverage. Regardless of the lack of such requirement in the Act and Regulation, however, sound risk management practices may lead a lender to conduct scheduled periodic reviews that track the need for flood insurance on a loan portfolio.
Can anyone point me to what is ment by "if it knows or has reason to know" as state above. Does this mean if for some reason a new insurable value it gotten during the life of the loan (not a MIRE event) the bank would have to start the force place process?