You are right that this is in the Guidelines, but it doesn't match up with the Act or the FFIEC's FAQ from 1997.

I encourage you (and everyone) to read the article I wrote called "Relying on a Previous SFHDF" where I point out what the Act says as well as the FFIEC FAQ (your regulator's stance, yet FEMA doesn't say the same thing. You can read the article here:
http://www.bankerscompliance.com/compliance-resources/free-downloads.htm

I spoke with Lena Thompson and Toola Young on 9/18/07 concerning how this is not consistent with the regulators comments (refinance does not require new SFHDF). Lena has read my article and had indicated to me earlier this year, the Guidelines would line up with the law and FFIEC. When we spoke, they indicated they were not ignoring this and were aware of the inconsistency. They stated the FEMA legal staff did not feel comfortable with the terminology "refinance" since it wasn't defined in the 1994 Act.

Lena emphasized "this is our guidance. Check with your regulatory agency."

Since the 1997 FFIEC Q&A's clearly state a refinance (same lender, same property) does not require a new SFHDF (assuming the 3 conditions are met), banks should not be cited for this. The FEMA Guidelines do not override the regulatory guidelines.

Your regulators (including the FDIC KC Region) should be using their own guidance (the 1997 FFIEC FAQ), not the FEMA Guidelines. I encourage anyone that calls the FDIC to email them my article and ask them how the FFIEC and law can say the same thing, but the examiners seem to be following the FEMA (inconsistent) guidance.

Has anyone else contacted the KC Regional Office?

I have tried to contact our FDIC office in St. Louis which is the office for Mr. Acord is at. The phone goes directly to voice mail, which is unusual they are usually very prompt and helpful. I have also tried three individual examiners extensions which also go directly to voice mail. I assume they are very busy answering calls due to the teleconference. I have left a message with our FDIC contact to call me I’ll let you know her response if nothing is confirmed prior.

I just spoke with Mr. Acord in relation to the SHFDF for refinancing. He stated he was referring to the New 2007 FEMA book on page 24, “Therefore, refinancing an existing loan is to be considered as the making of a new loan” and page 37 “on the most recent version of the SFHDF” With that being said I ask about the guidance from the regulators and he said that didn’t change, so you should still follow the guidance and basically nothing has changed “you may treat a refinance with the same lender as a renewal”. So Dave you are right there is still an inconsistency, but at least it is the same one. Also you do not have to force place before the 45th day. He is happy everyone was paying attention!

which new FEMA book are we talking about?

The September 2007 addition of the Mandatory Purchase of Flood Insurance Guidelines.

http://www.fema.gov/library/file?type=pu...50-000bdba87d5b

OK. Newbie Poster here. We run all of our flood certs with Life of Loan Coverage. Does this "alleged" change in length of validity of the certificate negate our life of loan coverage? What's the point of that service (and fee) if it's not going to provide the coverage promised?

Isn't this home equity or second mortgage considered a "new" loan and therefore requires a new determination?

You are awesome.
I love BOL.

I had no idea that there was a new book.

Neither did I!

Did anyone get an answer to the original issue that was raised in this post?

No. Refer to my previous posts in this thread and the cites quoted in them.


Same Property + Same Lender = Same SFHDF as long as the determination is less than 7 years old, there have been no map changes and the determination was initially done on the SFHDF.

Dan, I agree with you, but Skidoo was quoting that it could not be used. So when Skidoo then followed with the second mortgage not needing a new determination, I was confused.

Now, what complicates this for us is that we have our flood vendor track life of loan. So, we need to have them provide us with a "related loan" determination for each loan for tracking purposes. Its a money maker for them.

The issue with your vendor is a contract issue. Because of the LOL tracking they may require a new, or re-certified, determination each time a loan is renewed/refinanced. Also you need to find out if they notify you if there has been a map change/update, or if they only notify you if the map update causes a change in the property's status of being in or out of a SFHA.

The cite from the Federal Register I gave earlier, and BTW I got that from David a couple of years ago, clearly states that all transactions related to the same property and the same lender will be considered subsequent transactions and do not require a new determination, as long as the 3 factors are met.

KC FDIC has responded:
They say to clear up this situation look at page 37 of the yellow book and list the 3 requirements to reuse a determination
- ok, fine.... but then they add a final paragraph that states FEMA on their website has said determinations after 7/01/06 must be completed on the new form.
The say zip about reusing a pre-2006 determination. I am more confused now than ever.

No one field examiner is wanting to make a commitment and then have their commitment over turned by DC. That's why we can't get a consensus opinion.

And the book is correct...all determinations performed on or after 7/01/06 must be on the new form. It does not state that a previous determination is voided simply because it's not on the new form.

We have a Federal Register opinion supporting the position of using a previous determination, and until there is an official release by the FDIC disputing that opinion I will continue to use it as my guideline for using previous determinations.

For what it's worth, I have re-emailed the FDIC-Chicago for a determination on whether we should follow the FFIEC Guidance (as David suggested) or the FEMA Guideline for Mandatory Purchases. I also asked if there will be a SCANS issued directing EVERYONE on how to handle this going forward. I haven't heard back yet, but I imagine it will take a bit to get everyone at the FDIC that needs to answer a question like this together. I will keep you posted.

As for my previous response, that was word-for-word from the FEMA booklet from the examiner to me. So it appears they are following FEMA not their own guidance.

I just finished annual flood training with the lenders and am going to feel like an idiot when I have to say "Remember that previous determination stuff I told you about? Just forget all of that! The rules have changed - out of the blue!

It just seems bizarre, since all the flood determination forms have a built in expiration date of approximately 2-3 years, requiring new forms to be issued at that time. The "less than 7 years" wording in the regulation should have been removed if we are not allowed to use the old forms.

I ran this by one of my lenders and she is none too happy, but I did tell her not to do anything until I had clarification. Then I would issue new procedures to the entire lending staff.

Let's ask a question. What, exactly, changed on the form? Is it just a new OMB expiration date? If so, then I have no intention of changing procedures...someone, somewhere is misinterpreting something. Based on Dan's cut and paste with emphasis added...I'd say this is where the misinterpretation took place..someone overlooked the word "performed".

No one has mentioned it, but I am assuming you all received the follow-up email from the KC FDIC Office? The same folks that sent the email introducing the conference call?

I didn't get a follow up email. Can you tell me what it said?

Here it is:

Following the conference call held by the FDIC on September 27, 2007, on the topics of Flood Insurance requirements and Unfair and Deceptive Acts or Practices, several bankers have raised questions regarding the requirement for a new flood determination. We wanted to provide the following Flood Determine Process Clarification regarding when a previous determination can be used verses when a new determination is needed.

Page 37 of the September 2007 National Flood Insurance Program MANDATORY PURCHASE OF FLOOD INSURANCE GUIDELINES states:

A previous determination may not be reused when making a new loan. If the loan is not new, i.e., if the transaction pertains to increasing, extending, renewing, or purchasing an existing loan, the determination can be reused if:

It is less than 7 years; and
No new or revised FIRM or FHBM has been issued in the interim; and
It was initially recorded on the SFHDF.

The FEMA website (www.fema.gov) indicates that Standard Flood Hazard Determinations completed on or after July 1, 2006, must be completed using the new Form for compliance purposes.

You're exactly right. That's why Mr. Acord's statement is not logical. The Act and the FFIEC FAQ all say it is OK to use a previous SFHDF if the 3 conditions are met. It doesn't matter what form (year updated) I'm looking at.

Just because one examiner makes a comment (which we believe is incorrect) doesn't mean anyone should ever change a procedure. I encourage you NOT to discuss this with your lenders until you hear "official" guidance (as in a FDIC FIL).

Since they quoted the following from the guidelines:

A previous determination may not be reused when making a new loan. If the loan is not new, i.e., if the transaction pertains to increasing, extending, renewing, or purchasing an existing loan, the determination can be reused if:


Then I would opine you are safe to rely on the following quote from the Federal Register:

Two commenters pointed out that pursuant to section 1365 of the 1968 Act, a lender cannot rely on a previous determination set forth on a SFHD form when it makes a loan, only when it increases, extends, renews or purchases a loan. The agencies agree with this interpretation of section 1365 of the 1968 Act but note that subsequent transactions by the same lender with respect to the same property will be treated as renewals and will require no new determination. The agencies adopt this provision as proposed.


Thanks for posting the f/u email.

Thanks Bullseye. Dan already addressed how this (the FDIC email) is incorrect in his post (2 ago):


If anyone hasn't read the article I wrote called "Relying on a Previous SFHDF", I encourage you to do so. FEMA representatives and dozens of examiners (that I know of) have read this and given me feedback that it is correct. You can find the article here:
http://www.bankerscompliance.com/compliance-resources/free-downloads.htm

So how is the FDIC proposing to handle renewals. Are they saying that renewals can't use a determination pre 2006? or are they saying we can't do a new loan pre 2006?