FEMA’s Top 10 Things a Lender Should Know about the NFIP
Posted by Jennifer Nausin on Wed, Oct 07, 2009 @ 04:02 PM
In The Top 10 Things Every Lender Should Know about the NFIP FEMA addresses a lender's "must-know" items about the National Flood Insurance Program and Regulatory Compliance
The short list can be seen below and a detailed list can be found on FEMA's website
1. Flood insurance is mandatory for buildings in FEMA-identified high-risk flood areas, which are called Special Flood Hazard Areas (SFHAs).
2. Ensure that flood insurance coverage is maintained for the term of the loan.
3. Flood zone determinations are required to establish whether a building is located in a SFHA.
4. Know the amount of flood insurance coverage to require.
5. Notify borrowers in writing of the requirement to buy flood insurance for new and existing loans.
6. Escrow flood insurance premiums.
7. There is no waiting period for flood insurance to go into effect when it is purchased in connection with the making, increasing, renewing, or extending a loan.
8. Notify the insurance company or agent when the lender or servicer of a loan changes.
9. For more information about the mandatory purchase of flood insurance requirements, and other related topics, read The Mandatory Purchase of Flood Insurance Guidelines.
10. Flood insurance and the mandatory purchase laws help protect your investments as well as your borrowers' against uninsured flood losses.