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#2247220 - 01/05/21 07:49 PM Notice to Borrower - Flood Zone D
BankerProbs Offline
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Joined: Nov 2012
Posts: 9
What is the requirement for signatures/acknowledgement on Notice to Borrower (NTB) for Flood Zone D? Does anyone treat Flood Zone D differently? Currently, we require the NTB be signed at least 10 days prior to closing for properties located in SFHA and treat flood zone D like any other non-SFHA property. While NFIP is available for zone D properties, it is not federally required. Should the lender require flood insurance on a zone D property, should the notice to borrower be signed/dated (a) always, (b) never, or (c) only when lender requires flood insurance for a zone D property? But since flood zone D is an unknown risk, wondering how others treat flood zone D.

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Flood Compliance
#2247226 - 01/05/21 08:09 PM Re: Notice to Borrower - Flood Zone D BankerProbs
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,229
Galveston, TX
I can't answer your last question, but the rest of them are business decisions as there are no regulatory requirements for a property in Zone D.
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#2247243 - 01/05/21 10:43 PM Re: Notice to Borrower - Flood Zone D BankerProbs
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I'm not aware of any banks that require a Notice for Zone D. We have a few clients that provide a notice in all cases - A, V, B, C, D, X but the only time it is required is when the property is located in a SFHA (Zone A or V).

My personal opinion: Don't they sign enough stuff already? Why give them more. Plus, what if you tell them they are NOT in a SFHA and they are? That would already be bad, but now you put it in writing too.
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#2247248 - 01/06/21 12:09 AM Re: Notice to Borrower - Flood Zone D BankerProbs
crcmnot Offline
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Joined: Sep 2016
Posts: 351
If we have a property that comes back in Flood Zone D, our credit administrator initials the zone box on the determination and we move on. They are assuming the risk that the r/e is in an 'unknown' zone and have acknowledged it; we don't have the borrower sign anything.

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