Will you please help me on the Q&A? The new Q&A added on page 230, under Escrow 3, that “The Act and Regulation do not include an exception to the escrow requirement for force-placed insurance.” Yet the next one, Escrow 4, relates that “Until the loan experiences a triggering event, the lender is not required to escrow flood insurance premiums and fees, unless: (i) a borrower requests the escrow in connection with the requirement that the lender provide an option to escrow for outstanding loans; or (ii) the lender determines that a loan exception to the escrow requirement no longer applies.”
So as to force-placed insurance on residential property, does this mean that an escrow account need not be created for force-placed insurance when there isn’t a triggering event?
Or, does the "unless" of (ii) mean that an escrow account must created for force-placed insurance, even if there isn’t a triggering event, because the lender determines that a loan exception to the escrow requirement no longer applies?
If it’s the former, it seems we only would create an escrow after force-placed insurance is applied, but only at future triggering event occurring with the loan.

It means that there is not a specific exception for force placed insurance and that if otherwise you are required to escrow flood insurance premiums, you must escrow force placed flood insurance the same as borrower purchased flood insurance.

Thanks, Randy. But can the escrowing wait until the next triggering event, if any, "until the loan experiences a triggering event, the lender is not required to escrow flood insurance premiums and fees."? Or must the escrowing start immediately since it is force-placed insurance?

I do not mean to talk in circles, but it does depend on whether or not the force placement event is a triggering event itself. Read FORCE PLACEMENT 10.

Okay, thanks!! I appreciate your input.