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#2248648 - 02/03/21 08:08 PM ACV equals $0
Dodge Offline
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Joined: Mar 2010
Posts: 237
Refinancing a loan that secured by a dwelling in the flood zone. All the value is given to the land. The appraiser did include the cost approach of the dwelling. He gave the replacement cost of $96,800 and the depreciation $96,800, so the ACV is $0.

The previous bank had a force placed policy for $20,000 in coverage. Any recommendation on how to proceed on calculating coverage amount? The loan amount is $300,000

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Flood Compliance
#2248650 - 02/03/21 08:13 PM Re: ACV equals $0 Dodge
Cowboys Fan Offline
Power Poster
Joined: Dec 2002
Posts: 4,597
SC
If you don't already have it, ask for a copy of the hazard policy on the structure.
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#2248660 - 02/03/21 10:08 PM Re: ACV equals $0 Dodge
Dodge Offline
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Joined: Mar 2010
Posts: 237
No hazard policy since the land value alone fully covers the loan. Could I go by the $20,000 since that is what the previous bank did for the force placed policy, and its above the ACV? Confused by this one.

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#2248663 - 02/03/21 10:41 PM Re: ACV equals $0 Dodge
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 78,948
Galveston, TX
And that appraisal passed your appraisal review process? Somebody was asleep at the wheel. How can you depreciate a structure down to $0. There has to be at least some salvage value.
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