Let's say a borrower is underinsured for flood insurance so the bank has begun the 45 day force placed letter cycle. If on day 32, the bank receives notification that the flood policy has cancelled, do we start the force placed cycle over from day one, or can we continue with the 45 day cycle and force place on day 45?

Thank you

I would think you would not want to start over. If you did, that would mean the bank would be under-protected or unprotected for 87 days.

Anyone else?

I agree. In either case borrower is not adequately insured, so why start over. It is both ethical and legal to cover the bank by continuing with the current force-placement. If the letters sent to borrower contain the total amount required, then that should be sufficient to put them on notice that they need to get that amount of coverage, even if letters are stating the insurance is inadequate instead of cancelled.