We had an unfortunate incident occur recently. After we had already closed a mortgage loan it was noticed that the Flood Cert had the incorrect address. (It is part of the UW process to review this but unfortunately this was missed.) A new flood cert was obtained and the property came back in the flood zone. Unfortunately we closed our loan without having obtained a Flood Hazard notice and without obtaining flood insurance. I know these are both violations. Do you have any guidance on how we should handle this situation going forward? I feel like we should have the notice signed by the borrower now and require them to obtain the flood insurance coverage. Should we also provide a corrected CD and escrow notice disclosing the escrow for flood ins?

Send them the notice via certified mail along with your 45 day notice to purchase flood insurance so you do not have to worry about them returning a signed copy . You might want to include an apology letter also.

This is a post closing event that does not impact closing costs. You would need to issue a short year escrow statement revising their escrow account payment once you get a policy from them. Whether you want to force place now or after the 45 day letter expires is up to you.

This sounds like a training 'opportunity'.

You may want to make everyone aware that you have, at minimum, three flood violations with this loan: 1) incorrect flood determination; 2) notice not received and acknowledged by the borrower prior to loan origination; and 3) failure to have proper flood insurance in place prior to loan origination.

You may want to make everyone aware that you have at minimum, three flood violations with this loan - that is a pontental $6,756 CMP for this one loan.