We are making a loan secured by a condo. We have determined that the amount of coverage under the RCBAP is insufficient for our loan, and have requested that either the association increase their coverage or the borrower purchase a Dwelling Form Policy. The borrower's condo assn issued a letter saying the following: "As you know all the NYS lenders (Wachovia, Wells Fargo, Chase, etc) have all accepted our $10M flood insurance limits. This $10M figure was derived using a commonly accepted method of determining a flood limit known as “Probable Maximum Loss”.
Has anyone heard of this before? Am I missing something? Thanks.