Is participant required to get a flood certificate

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Question:

If we purchase a participation in a loan that is secured by improved real estate or a mobile home, are we required to obtain a Standard Flood Hazard Determination?

Answer:

No. The burden of flood determination is on the person making, increasing, extending or renewing a loan. You are doing none of those. However, your due diligence process for purchasing the participation should include a determination that the originator met their flood determination and insurance requirements. This could include having them provide you with a copy of their determination form.

First published on BankersOnline.com 08/18/03