Flood Insurance on RE w/Bank Loss-Payee

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Question:

We have a situation involving flood insurance and are unable to come to a consensus. We have an RE loan for $85,000 on a property located in a flood zone. The flood insurance coverage on this property is $65,000. We have the Dad's property as collateral, also in a flood zone. Dad has $25,000 coverage on his property. We have 1st mortgages on both properties. We are named loss-payee on both policies. Is this okay?

Answer:

You have a loan for $85,000 secured by two properties in a SFHA. You have a total of $90,000 in flood insurance and both buildings are insured. Sounds like you are perfectly fine to me.

First published on BankersOnline.com 5/20/13