Hello,

For our construction-permanent loans in flood hazard areas, our mortgage lending department will obtain flood insurance upon the slap and/or elevation certificate completion, which follows guidance from the flood Q&As #22. The construction phase is for 1 year and the escrow account will be established after closing, once the flood policy is obtained. How are other Banks disclosing escrow information on CDs?

Specifically,
1. On page 1 of the CD, how do you disclose the Estimated Escrow in the Projected Payments table?
2. How do you disclose the Escrow Account table on page 4 of the CD? Do you select "For now, your account will have an escrow account" and include the amount under "Escrowed Property Cost over Year 1" even though the account is not being established at closing?

I realize that we have to include an estimated amount under Estimated Taxes, Insurance & Assessments.

Thanks for any feedback!

our mortgage lending department will obtain flood insurance upon the slap and/or elevation certificate completion

Before addressing your TRID questions, you are aware that the NFIP changed their waiting periods on flood insurance and if the loan is not covered on the date of closing, then there is going to be a 30 day mandatory wait before the policy will be effective. That means that if you wait until the slab or elevation certificate is completed to get the coverage, then there cannot be any more construction disbursements made for 30 days?

Randy, the insurance agent is requesting an elevation certificate. I'm not sure if the agent is underwriting through the NFIP or not. Assuming it is an NFIP policy and not private, does the NFIP require an elevation certificate? It looks like they do based on the flood manual.

Well, I am assuming that it would be a NFIP policy because most private insurers could care less about an elevation certificate. They use a totally different rating process from the NFIP. The agent can issue a policy that is provisionally rated and then follow with the elevation certificate and photos later and the premium will be adjusted later. If the agent says that they cannot do that - then they need Flood Insurance training.

If they disagree - tell them to refer to Section 3 - VI. Provisional Rating in the Flood Insurance Manual.

Very helpful information Randy, thanks!