I am looking at a purchase mortgage loan in a flood zone that closed in December 2020. . All I have is a copy of an invoice with the premium amount for the insurance quote. We used this figure to establish the annual flood insurance amount for escrow. I do not have a dec page or a copy of the flood application or a copy of a receipt that says the customer paid for it before closing. I cited 12 CFR 22.3 a as violation. The flood insurance premium was collected at closing and sent on to the insurance company after the title company sent us the check. The customer did not pay for the insurance prior to closing. The loan officer is stating that I am wrong. A new buyer can not purchase flood coverage on a home that he does not own. Is this acceptable. Was I wrong in stating that this is a violation. I honestly do not know what to say to this officer. Any feedback will be appreciated, as I am at my wits end.

You are not wrong and if the policy was not purchased prior to closing, the policy has a 30 day wait period for the effective date. The regulators finally put this issue to bed in the proposed new flood FAQs.

Missing pages? Looks like someone is sloppily trying to cover up their mistake.

How do you explain to an officer that the borrower must purchase a flood policy prior to closing on a property that they will own/transfer on the date of closing.

That he won't be a loan officer anymore if he can't understand it? That's where i'd start (if i was management).

Does your loan officer let home loans close without hazard insurance, using the same argument?

They inform the borrower that the borrower needs to 1) get with their insurance agent and buy a policy on the property with an effective date as of the date of closing, or 2) if the seller's have a policy, get a copy of the endorsement of that policy from the seller to the buyer with an effective date of closing.

Not really sure how much more explaining there needs to be. It happens thousands of times a day across the USA. Tell them an insurance agent does not tell them how to make a loan, they should not be trying to determine when an insurance agent can write an insurance policy.