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#32863 - 09/16/02 02:18 PM Flood Insurance & escrow
ahou Offline
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ahou
Joined: Aug 2002
Posts: 3,094
If a lender has loan programs categorized as Home Equity Lines, Consumer loans and Mortgage loans and escrows for the Mortgage and Consumer loan programs - if it chooses not to escrow for anything on HE Lines (including Flood), is that OK?
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Lending Compliance
#32864 - 09/16/02 02:27 PM Re: Flood Insurance & escrow
Anonymous
Unregistered

Yes, you are only required to escrow for flood insurance if you are escrowing for any other item, 12 CFR 339.5.

If a lender requirees an escrow for taxes insurance premiums, fees or other charges, then it must also escrwo for required flood insurance permiums.

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#32865 - 09/16/02 02:27 PM Re: Flood Insurance & escrow
Andy_Z Offline
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Andy_Z
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I have always understood that if flood insurance is required and you escrow for anything else, you must escrow for flood. I thought this was applied on a loan by loan basis, not that this standard was applied against a protfolio or product.
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#32866 - 09/16/02 02:34 PM Re: Flood Insurance & escrow
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
Andy is correct, as usual. You do not have to escrow based on a portfolio classification, only on a loan by loan basis.

If your bank policy requires you to escrow for those loans, then you would have to escrow for flood insurance if necessary.

Bottom line, if you escrow for a specific RE loan then you must escrow for flood insurance if it is required.
Last edited by dpersfull; 09/16/02 06:00 PM.
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#32867 - 09/16/02 02:49 PM Re: Flood Insurance & escrow
ahou Offline
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ahou
Joined: Aug 2002
Posts: 3,094
Thanks everyone. It was my gut feeling, but as always - just trying to make sure! My motto "Comply or Die" almost kills me from time to time.
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