We have an interim construction loan that the real estate is in flood zone AE. Our Deed of Trust lists the real estate and the construction materials
including drapes. All of the construction materials listed are covered under the buildings flood insurance, however the drapes are not. The plans
and specs for the construction does not list drapes. Do we have to require contents coverage just to cover the drapes since it is listed in the Deed of
Our secondary mortgage department underwrote a loan for a property and ordered a flood determination/SFHD on the property from our vendor. The
SFHD issued noted that the property was located in flood zone X. Based on this, the loan closed without flood coverage in place.
Subsequent to closing it was determined that the loan would need to be retained in-house. The bank's credit department ordered another SFHD from a
different vendor. This SFHD came back noting that the property was located in zone AE, requiring flood insurance coverage. When contacted the first
vendor they reissued a SFHD and updated the flood zone to AE.
Obviously, the property must now be insured and any recourse against the first vendor would depend on the terms of the contract with the vendor. The
question from management is whether the bank can (with proper notice) now require the borrower to obtain flood insurance or will the bank have the
responsibility to provide coverage?
I believe that the responsibility lies with the borrower - it would be no different in the particular set of circumstances than if there was a map
change placing the property in zone AE where it was previously in zone X. Whether management elects to provide none, all or part of the cost is a
business decision. I would agree that the Bank (or original vendor) should pay for the insurance (force place) for the gap period.
I have a loan on a condo unit which had hurricane damage. Because of the damage, all of the units have been demolished and it is in the process of being rebuilt on stilts. The property is in the Florida Keys and is in flood zone AE. Normally I would require proof of flood insurance once the slab has been poured, but all of the units are being rebuilt on stilts. No slabs will be poured, instead concrete pillars will be going in the ground. At what point do I need to ensure that there is flood insurance and that I have sufficient coverage? I assume if the condo does not purchase coverage I will have to force place?
We have a loan with two properties. One is a flood zone and one not in. The value of the property in a flood zone is $50,000. Can we require flood
insurance only on the amount of the property that is in the flood zone or do we have to get flood insurance to cover the entire $250,000.00 loan balance?
Is flood insurance compliance complicated?
What has been the most recent change to flood insurance compliance?
Can a lender purposely not get one of the six TRID items to avoid getting an application in order to delay the loan estimate delivery date?
What is a private flood insurance policy?
Pertaining to the acceptance of private flood policies, my question is in reference to the statement found in the OCC Federal Register (vol. 84 no. 34 pg. 4955). “Specifically, the proposed rule … to mean an insurance policy that: (1) is issued by an insurance company that is licensed, admitted, or otherwise approved to engage in the business of insurance in the State or jurisdiction in which the property to be insured is located, by the insurance regulator of that State or jurisdiction or, in the case of a policy of difference in conditions, multiple peril, all risk, or other blanket coverage insuring nonresidential commercial property, is recognized, or not disapproved, as a surplus lines insurer by the State insurance regulator of the State or jurisdiction where the property to be insured is located.”
Please confirm which state the licensure would be verified in. Is it in the state the real property is located in, the state in which the agent is, or the state in which the insurance company is located? For example: assume our real property is in Louisiana, the agent is in Texas and insurance company is in Massachusetts. My interpretation of this statement is we would verify licensure in the state of Louisiana, but it's confusing.
How can the “compliance aid” provision be used?