06/17/2013
We have an Ag Loan that has five parcels secured by one loan. When running the flood determination, it shows that two of the parcels are in a SFHA. Out of the five, the two that are in the SFHA have structures on them, a mobile home (permanent foundation) a dwelling, and two equipment/storage sheds. We have flood insurance on the mobile home and the dwelling. My question is are we suppose to have a separate policy for each and every structure on the parcel or can we go by the FDICs special situation clause where it states for multiple structures that secure a loan FEMA does permit borrowers to insure nonresidential buildings using one policy with a schedule separately listing each building or do we have to have a policy for each storage building?
06/17/2013
Question on Flood Insurance Requirement for a Condo with over 25% commercial space and under FNMA 1028 PERS approval:If a Condo project has over 25% commercial space, the condo will be consider as a Commercial Condo or Non-residential Condo, as per FEMA, and the said Condo is no longer qualified under the basic RCBAP coverage which I understand.Here is a condo in NYC and Lender stated the Flood Insurance is not sufficient and borrower must obtain their own Flood Coverage via NFIP.The condo has:<ol><li>Standard NFIP $500,000.00 Max Commercial Policy with $5,000.00 deductible;<li>Excess Flood Policy $160,000,000.00;<li>The Project has 453 Units and $250,000.00 min Flood Policy needed which is min Flood Requirement of $113,250,000.00;<li>Since Standard NFIP Max Coverage is $500,000.00 for Commercial or Non-Residential Condo, the Condo purchased additional $160,000,000.00 under Excess Flood Policy.</ol>Is the Flood Insurance of $500K with NFIP w/ $5k deductible + Excess Policy of $160 million enough and sufficient to fulfill the FEMA and FNMA Requirement or does the individual have to obtain their own flood via NFIP of max $250K?
06/10/2013
Does a bank have the right to require an elevation certificate for flood purposes from the consumer?
05/27/2013
We have run a flood search for a property through our vendor, which resulted in the property being found in a flood zone (specifically A4). The Borrower went to place insurance when his insurance company ran a search which came back that the property was NOT in a flood zone (specifically flood zone B). I was looking for some advice on how to proceed and how to determine who is correct?
05/13/2013
FEMA's forced-placement requirements states that the lender shall purchase the insurance on the behalf of the borrower but does that mean to include that the borrower is to be a named insured on a forced-placed policy? Many independently purchased insurance coverages are provided for the banks interest only.
03/12/2012
In cases where flood insurance coverage is mandatory, must a lender accept a private flood insurance policy that meets the six requirements set forth in the FEMA Guidelines? Or may a lender require their borrower to purchase an NFIP policy?
11/01/2010
My colleague and I have perused the NFIP, QandAs, and are still being questioned by the insurance company. Is it okay for a general commercial property insurance policy to include flood insurance?
02/15/2010
We have an unusual scenario regarding flood insurance and I have not been able to find a straight answer in the FEMA guide or from our vendor or by calling FEMA directly. We are adding real estate property as collateral to an "existing loan" - no new funds are being disbursed. The new real estate collateral is located in a flood zone. The borrower is not providing proper flood insurance. Can we force place on the "new added property to an existing loan" at the inception of adding the collateral? The FEMA guide states: "The force placement of coverage is designed for use at any time during the term of a loan in uninsured and underinsured situations; it is not intended for use at loan origination. If a borrower refuses to obtain flood insurance coverage as a condition of obtaining a loan, the loan is deficient and is not to be made". The RM's argument is that this is not a new loan - just adding collateral to an existing loan. Is the act of adding new collateral considered origination? Can we force place on adding new collateral to an existing loan?
01/25/2010
We have loans in the Special Flood Hazard Area that were made prior to our becoming a participating county. Now that we do participate, do we need to require flood insurance or may we wait until one of the triggering events, i.e. renewal, extension, etc?
12/07/2009
There was a question: <a href="http://www.bankersonline.com/lending/guru2009/gurus_ldng090709d.html">Timeframe to Provide Flood Insurance</a>, regarding a loan that fell into a flood zone as a result of a mapping change. The guru responded, "You need to send the borrower the Notice of Special Flood Hazard..." I could not find where this was a requirement in FEMA, any ideas? It does not fall under the Make, Renew, Extend or Increase criteria for a flood notice.
