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Fee for Force-Placed Flood Coverage

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Question: 
Are banks allowed to charge a fee (say $25) for doing force-placed flood insurance? The regulation reads "The bank may charge the borrower for the cost of premiums and fees incurred in purchasing the insurance." Does this mean only direct fees? Also, can this fee be recurring, say monthly or quarterly?
Answer: 

I do not interpret that section to allow the bank to "up-charge" for the premium. I have always taken that to mean any premiums, fees (such as processing fees by the insurance company), FZD re-certification fees etc. However, to repeat, this is my interpretation.

First published on BankersOnline.com 11/15/04

First published on 11/15/2004

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