I'm sure this has been addressed in numerous posts, but instead of looking through all the pages, I'm hoping someone can give me a clear answer to my question. If I understand right LOL means, if our vendor contract has LOL coverage. That means the vendor will do re-certifcaitons during the life of the loan. We can rely on the flood form as long as the date is less than 7 yrs. old? I've heard some people think it means we never have for order a flood dtermination as long as we have the loan on the books. Need some clarity.

It would be best to clarify this with your flood vendor. Typically, LofL means as long as that same loan is on your books, the flood vendor agrees to notify you if there are any map changes affecting the property securing the loan.

Using that SFHDF for subsequent loans is not what LofL means. The 7 year rule is one of 3 factors determining if you can use a previous SFHDF for subsequent loans. Ask your vendor about using a previous SFHDF for subsequent loans. Some charge a small fee.

This is a key element. One of the 3 factors David mentions is if there have been no map changes. It is possible that a map may change but not "affect the property". Our vendor only notifies us if the map change causes the property to go into a SFHA or to come out of a SFHA. If it (the map change) does not change the property status then the vendor does not notify us.

Thanks guys for your help!

I saw the title and thought laugh out loud flood certifications. Hah, I need more coffee.

As a best practice, most banks pull a new flood determination any time there is a new note on the property.

Maybe at your bank, but I disagree that "MOST" banks pull a new certificate. This is not what the Act or your regulators require (see the old and new FAQ's). This is what the FEMA Guidelines suggest, but they are not requirements.

David,

However, most banks probably should. It is just a much cleaner process and doesn't then cause the bank to violate their contract with the flood determination vendor. Life of "loan" means just that in the contract. Once you have a new loan - that life time coverage of the determination is suppose to cease because the contracts call for the banks to notify the vendor within XXX time of pay-off of the specific loan for which the FHD was pulled. The LOL coverage is not based on the property which would allow the bank to make subsequent loans on the same LOL determination. Banks need to read their contracts because almost everyone I have visited are in breach of contract with their vendors as they are not notifying them of pay-off. So, that means that the vendor may be continuing to provide coverage on 100s or 1,000s of FHD that are suppose to be dead. Can't wait for one of these vendor to get into trouble then start suing the banks for all the unnecessary time and effect they are expending.

Me too!!

To follow up on what Mr. Carey has said ...

At a prior bank, some lenders were using the same SFHDF for multiple loans, but the loan ops clerk was cancelling life of loan coverage when any of the loans paid off. We found after a customer volunteered that his property had shifted into a flood zone during a map revision by FEMA. We had not gotten a notice because the coverage was cancelled.

Our policy changed the next day.

Randy: I don't disagree with your contractual issues. I also recommend banks contact their vendors and discuss this issue. Some don't care, some charge $1 - $5 for subsequent loans.

My point is that I have over 500 clients. "Most" is not accurate of our clients and I didn't want msboo to think this was the a regulatory requirement.