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#585048 - 07/18/06 07:10 PM Two flood questions
Ninky Offline
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Ninky
Joined: Nov 2002
Posts: 357
1. Is it a violation if the zone on the flood insurance policy does not match the zone on the SFHDF? I know it is a customer issue since their claim may be inadequate if the premiums have been paid on a different zone. Would this trigger a CMP if there is a pattern?

2. Is a schedule of coverage on multiple buildings acceptable on a commercial loan, or does each building have to be issued a separate policy?

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Lending Compliance
#585049 - 07/18/06 07:25 PM Re: Two flood questions
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
1. I know the FDIC is monitoring zone compliance, or at least in my area they are. I can't speak with certainty but it is my opinion if you have a pattern of unreconciled zone differences it would subject you to CMPs. At a seminar I attended on the 13th the speaker made it clear that if the zone is inaccurate on the policy they will not pay a claim, however he did say that the insured had 30 days to pay the difference in premiums. So, if the zones are not legitimate at closing then you are closing the loan without adequate insurance coverage and are in violation of the Law. (Just my opinion)

2. If insuring through the NFIP each building located in a SFHA must be insured by its own NFIP policy.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#585050 - 07/18/06 08:31 PM Re: Two flood questions
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
At the Nat'l Fema seminar in June all of the regulators said they expect the zone to match absent grandfathering. It must be investigated and reconciled or you run the risk of being cited for inadequate coverage.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#585051 - 07/18/06 10:51 PM Re: Two flood questions
Ninky Offline
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Ninky
Joined: Nov 2002
Posts: 357
Exactly what is "grandfathering'?

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#585052 - 07/18/06 11:29 PM Re: Two flood questions
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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