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#25975 - 07/30/02 08:16 PM Flood Notice
DawgFan Offline
Diamond Poster
Joined: Jul 2002
Posts: 1,678
United States
If anyone is interested in sharing, I'd like to know what your respective policies are for providing notice "within a reasonable time" when a home is in a flood zone. I have heard that the "reasonable time" is considered to be ten days by many regulators. Any advice?
Opinions expressed are solely my own.

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Lending Compliance
#25976 - 07/30/02 08:21 PM Re: Flood Notice
D2Xs Offline
Power Poster
Joined: Jan 2002
Posts: 2,706
We will give notice ASAP. But will allow at least 10 day for the customer to obtain flood insurance.
Beauty is only skin deep...but ugly goes all the way to the bone!

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#25977 - 07/30/02 08:32 PM Re: Flood Notice
E.E.G.B Offline
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Joined: Jul 2002
Posts: 6,726
the sandy shore
If you have the FDIC Rules & Regs, it's in the Appendix (p 2265) as "...notices must be either mailed or delivered as soon as feasible but not less than 10 days in advance of the closing of the transaction." FEMA's "Mandatory Purchase of Flood Insurance Guidelines" also states (p 29) that "the regulations do not establish a fixed time period in which the lender must provide the notice....The agencies consider the giving of the notice 10 days prior to completion of the transaction as a reasonable time interval." I think what you have heard is a slight distortion of the regulations.
I disbelieved what he was saying so hard, I probably created an alternate universe where it wasn't true.

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#25978 - 07/31/02 12:04 PM Re: Flood Notice
RVFlyboy Offline
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Joined: Oct 2000
Posts: 5,992
Soaring over Georgia
Bottom line, if they have flood insurance at closing, how can anyone argue that notice of flood insurance requirement was not reasonable?
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions

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#25979 - 07/31/02 12:48 PM Re: Flood Notice
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
The 10 days was also in the original preamble to the last revision, when forced placement became mandatory....yes, I do remember back that far.
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy

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#25980 - 07/31/02 02:26 PM Re: Flood Notice
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,765
Central City, NE
12 CFR ยง339.9 Notice of special flood hazards and availability of Federal disaster relief assistance.
(c) Timing of notice. The bank shall provide the notice required by paragraph (a) of this section to the borrower within a reasonable time before the completion of the transaction, and to the servicer as promptly as practicable after the bank provides notice to the borrower and in any event no later than the time the bank provides other similar notices to the servicer concerning hazard insurance and taxes.

The 1996 amendments removed the "10 day prior" wording and replaced it with "within a reasonable time before the completion of the transaction." Many banks are cited for giving the notice AT closing (which is not before completion of the transaction). What
ExFovtBabe cited (page 2265 of the FDIC Rules and Regs) is not the law, but rather a guideline. This area was not changed when the 1996 rules were made.

I am with Jim on this. The reg does not say 10 days anymore. As long as insurance is in place at closing, I must have given the borrowers a reasonable period of time to purchase the insurance. The change was made for a reason. Don't hang on to old rules.
David Dickinson

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