We have a loan that closed several years back. The property is in a flood zone however at the time of closing the community did not participate in the NFIP. Insurance was not purchased on the structure. We have a new loan in process collateralized by the same property. The new determination reflects that the community now participates. There is a small structure on the propety that the customer does not want to insure. We decided to not take the property as collateral and are going to release it on the existing loan. Are we in violation of the regulation on the existing loan because insurance was not obtained when the community began participating. How would we know when this took place?

There does not appear to have be a trigger between the original loan and now, so how would you have known?

Ok, I wasn't sure if there was a notification when this happens that we just missed. There wasn't any other trigger prior to now.

The only notification you might have received would have been some optional notification through a life of loan determination.