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Do We Need to Give Another Flood Notice?

Answered by: 
Dan Persfull

Question: 
We are making a new loan to pay off a home loan and add additional funds. The property is in a flood area and notice was given to the customer on the existing loan. Since we are able to verify that the customer has been notified of the flood status prior to the existing loan, what are the requirements for reasonable notice?
Answer: 

Reasonable notice is not "defined," although 10 days' notice is referred to as generally being reasonable. In a refinance situation, we re-give the notice immediately once we discover from the file the property was in SFHA. As long as the notice is given before the closing date, unless you can close the loan in one day, I think you would be OK.

First published on BankersOnline.com 4/4/05

First published on 04/04/2005

Filed under: 
Lending
Filed under lending as: 
Flood

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