I think that Randy has answered this already, but I have another example to cite to obtain clarification.
A loan with a current balance of $115,000 is currently secured by 3 residential properties, all of which are in a special flood hazard area. These 3 properties appraised for $50,000 each. Flood insurance is in place for these properties.
The lender wants to modify the loan to advance $100,000 to be used for the purchase of another residence which is not in a special flood hazard area.
As long as the current flood insurance policy provides coverage for the $115,000 current loan balance, is any additional flood insurance required?
The lender has been told that the flood insurance coverage must be at least the amount of the loan, as to be modified to $215,000.
Thank you for your assistance. Is there a specific "chapter and verse" so to speak that addresses this type of situation?
"When you believe He's all you need,that will be your defining moment." [from "Defining Moment" Newsong, Sheltering Tree CD]