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Flood Determination on Lease of Airplane Hangers

I have a loan that is collateralized by the assignment of leases for airplane hangers. The hangers are not collateral for this loan, nor is any personal property. The only collateral is the assignment of leases. Am I required to get a flood determination for this loan?

Answer, David:I do not believe this is a covered loan.


Answer, Andy:I agree with David and will provide a cite because I went through this in an exam. Look to the Federal Register, Vol.62, No. 161, July 23, 1997, pg. 39525. This was for an interagency Q&A and while it discusses dwellings, I believe itis on point for the question.

8. If a borrower offers a note on a single family dwelling as collateral for a personal loan but the lender does not take a security interest in the dwelling itself, is this a ‘‘designated loan’’?
Answer: No. A designated loan is a loan secured by a building or mobile home. In this example, the lender did not take a security interest in the building, therefore, the loan is not a ‘‘designated loan.’’

First published on 3/13/06

First published on 03/13/2006

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