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#361915 - 05/20/05 03:03 PM Flood Cert on Renewals
LoisLane Offline
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Wisteria Lane..
I seem to remember reading a post within the last week or two (but now can't find it) that the rule allowing a bank to rely upon a previous determination (if less than seven years old) wasn't applicable if the loan being renewed goes past its maturity date. Does any one remember this? Is this addressed in the guidelines?
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#361916 - 05/20/05 03:09 PM Re: Flood Cert on Renewals
Dan Persfull Offline
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Lois, I didn't search for the link but there have been several discussions on this, bottom line:


Same property + same lender = same SFHDF as long as it meets the other requirements (less than 7 years old, no map changes and on the designated form).
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#361917 - 05/20/05 04:13 PM Re: Flood Cert on Renewals
LoisLane Offline
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Wisteria Lane..
Thanks Dan, but what I'm trying to determine is whether using the same cert (same lender, same SFHDF, etc) is OK if the loan being renewed has already matured. Did I just dream that this was not allowed on an already matured loan?
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#361918 - 05/20/05 04:20 PM Re: Flood Cert on Renewals
Dan Persfull Offline
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Any loan the same lender makes on the same property is considered a subsequent transaction, therefore a previous SFHDF may be used. The only concern would be if you use a 3rd party vendor and LOL monitoring, are you still covered?

Although it would be allowed, I'm not sure if it would be a "best practice" to use a previous determination from a paid loan.
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#361919 - 05/20/05 04:22 PM Re: Flood Cert on Renewals
LoisLane Offline
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Wisteria Lane..
Thanks for the quick answers ! I appreciate your help.
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#361920 - 05/20/05 05:06 PM Re: Flood Cert on Renewals
swiggles Offline
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While we're on the subject of flood regulation and renewals.....

If a lender renews a loan secured by property in a flood zone, the lender can rely on the previous determination as discussed above. However, is it necessary to provide the notice again. The reg states that whenever a bank "MIREs" a loan secured by a property in a flood zone, the bank must notify the borrower. I am getting some flak from lenders who do not see the point in it. They claim that the borrower was notified on the prior loan and that it should not be necessary to do so again. We're relying on the previous determination, flood insurance is in place, so why notify?

Any comments?
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#361921 - 05/20/05 05:31 PM Re: Flood Cert on Renewals
Dan Persfull Offline
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I personally don't see the point in it either, but it is a requirement of the Law. You might want to read the introduction (to the left) to Jack's flood seminar.

and the failure to deliver the Notice of Special Flood Hazards.
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#361922 - 05/20/05 06:57 PM Re: Flood Cert on Renewals
swiggles Offline
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Thank you for the confirmation. I just finished conducting my own flood regulation training for all lenders here at my bank. That is where the disagreement arose. I stood my ground, but then....as ususal....began second guessing myself.

Another officer claims that he's had a couple of instances where the insurance company refuses to write the policy or even accept a premium until they have an elevation certificate in hand. Apparently, the elevation of the property is used to determine the premium to be paid. This delays the closing of the loan. Normally, we would accept a copy of the application for insurance as long as it indicates that a premium has been paid for the insurance. But in this case, the insurance company will take the application but will not accept the money. Has anyone else had this problem?
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#361923 - 05/23/05 03:53 PM Re: Flood Cert on Renewals
Sound Tactic Offline
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OK one more for you Dan. Does the customer need to sign the disclosure if flood insurance already exists on the property? i.e. we extended a loan previously and provided disclosures, are using the same collateral and the customer has adequate insurance?
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#361924 - 05/23/05 04:00 PM Re: Flood Cert on Renewals
Anonymous
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There are lots of agents out there that will insure structures w/out the elevations or the property doesn't even have to be in a flood zone. If someone wants flood insurance, they can get it. Those agents are allll about making money. So, if your applicant finds an agent that won't, they either have to wait on the elevation or find another agent. But the bank has to have an application for flood insurance AND a receipt that the premium has been paid or an actual policy.

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#361925 - 05/23/05 09:47 PM Re: Flood Cert on Renewals
Dan Persfull Offline
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Shemp, evidence of delivery is the same for the first, second, third, or tenth notice.
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#361926 - 05/24/05 02:23 PM Re: Flood Cert on Renewals
flood_guy Offline
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Quote:

Thanks Dan, but what I'm trying to determine is whether using the same cert (same lender, same SFHDF, etc) is OK if the loan being renewed has already matured. Did I just dream that this was not allowed on an already matured loan?




If a loan is paid off my company does not track it for because the "Life of the Loan" has passed.

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