Thread Starter: Anonymous
Title: Re: Notice of Special Flood Hazard - Timing
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Reviewing loan file as part of internal flood audit. Property is in a flood zone, we know this as we have had prior loans on the property. Borrower requests for new loan secured in part by this property located in a flood zone, the required Notice of Special Flood Hazards is given to the borrower and signed/obtained for loan file, and then several months later the loan closes. I'm not sure of the specifics, as to why this transaction took so long to close (I will inquire with the LO/staff about that issue), but I'm questioning from a compliance standpoint, if this would be considered giving the required flood notice "timely"? I believe the requirement says the notice "must be given within a reasonable time before completion of the transaction." Notice was given before completion of the transaction, but I'm doubting this would be considered reasonable in the eyes of an examiner, and I've never seen this in any of our loan files prior. Should a violation be cited? Thoughts?
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