Obligation to verify 1st lien holder is escrowing

Are we required to verify that the 1st lien holder on a 1st lien originated after 1/1/16 is escrowing for flood insurance? Or is the mere fact that we are in a subordinate lien position exempt us from the escrow requirement?

If you have a subordinate lien, you do not have a requirement to escrow - even if the 1st lien holder fails to do so.

Excellent. Thank you for the confirmation!!!!

I want to tag on to this thread with a similar question.

Lets say the loan secured by the 1st lien is with our bank and was done back in 2014. We have sent the option to escrow letter to the customer and they choose not to escrow.

Then we make a loan secured by a subordinate lien and know that there is no escrow for flood.

Would we be required to escrow for flood in this instance?

No. The loan you recently made is a subordinate lien. That loan is exempt from the escrow requirement.