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#468968 - 12/12/05 03:22 PM Flood Determinations
poppy Offline
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Joined: Nov 2005
Posts: 224
We have a number of borrowers who are in the rental property business, and have a significant number of residential properties (some with more than 100 properties)securing all of their loans with us (i.e., every new loan to purchase or renovate includes all the prior collateral). These loans refinance on a fairly regular basis and not all at the same time. For instance, we may refinance several loans secured by 100 properties one month, and the next month do several more secured by the same properties.

We currently print another copy of the original SFHA at refinance on each property securing the loan and obtain and pay for another form from the flood company indicating the address of each property and whether there have been any changes to the original SFHA as of the date of refinancing. All of our loans have life of loan coverage.

As you can see our current procedure really bogs us down and our image system down. If we have life of loan and are notified by the flood insurance company if there are any changes to the original determinations, shouldn't that be enough?

I would appreciate any of your thoughts on this.

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Lending Compliance
#468969 - 12/12/05 03:27 PM Re: Flood Determinations
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,769
Bloomington, IN
If the current SFHDF is less than 7 years old, on the designated SFHDF and there have been no map changes it may be reused without a new determination. The LOL should cover the map changes, however keep in mind the bank is responsible should the flood vendor fail to provide you with an update. It is a risk base decision on your part whether you rely on the existing determination or if you continue to update them.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#468970 - 12/12/05 04:55 PM Re: Flood Determinations
upstateNY Offline
Platinum Poster
Joined: Apr 2003
Posts: 933
New York State
Quote:

If the current SFHDF is less than 7 years old, on the designated SFHDF and there have been no map changes it may be reused without a new determination. The LOL should cover the map changes, however keep in mind the bank is responsible should the flood vendor fail to provide you with an update. It is a risk base decision on your part whether you rely on the existing determination or if you continue to update them.



Dan,while I completely agree with the accuracy of everything you have stated, the flood vendors have us by the you know what. Life of loan coverage is tracked by our vendor according to the loan number. When we re-write a loan and replace it with a new loan number, the LOL tracking for the old loan ceases. Therefore, in order to obtain LOL coverage for the new loan, we must pay for a new determination, linking it to the new loan number. (This is without regards to the age of the original determination.) Not a popular scenario at this bank.

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#468971 - 12/12/05 06:00 PM Re: Flood Determinations
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,769
Bloomington, IN
If your vendor tracks by loan number then you may have to get new determinations per the contract. Our's tracks by property address, not the loan number.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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