FLOOD INSURANCE CORRECT FINALS ANSWERS
AND QUESTIONS SET A+
✔✔It is the customer's responsibility to ensure that flood insurance remains in place for
the term of the loan, and the lender is not required to monitor this. - ✔✔F
✔✔The requirement to escrow all premiums and fees for flood insurance applies to: -
✔✔Home equity lines of credit (HELOCs)
Loans with a business, commercial, or agricultural purpose
Construction or temporary financing loans with a term of less than 12 months
***None of the above
✔✔A financial institution is allowed to rely on Letter of Map Amendments or Letter of
Map Revisions when deciding not to require flood insurance. - ✔✔T
✔✔Flood insurance is required for: - ✔✔The term of the loan
✔✔The flood insurance requirements serve to ____ consumers by alerting them if their
real estate is located in a flood-prone area and to _____ them by requiring flood
insurance to be in place before a mortgage can be obtained. - ✔✔Inform / protect
✔✔Select all that apply. Flood insurance is required when: - ✔✔--A loan renewal on a
mobile home that is affixed to a permanent foundation located in an SFHA
--A home equity loan for a storage shed installation on a concrete pad located in an
SFHA
--A mortgage on a beach house located in an SFHA
--A loan for a travel trailer without wheels secured to a permanent foundation located in
an SFHA
✔✔Requires flood insurance for loans secured by real estate in SFHAs in participating
communities - ✔✔1973 Act
✔✔Requires mandatory forced placement of flood insurance - ✔✔1994 Act
, ✔✔Makes federally-subsidized flood insurance available - ✔✔1968 Act
✔✔How is flood insurance provided for second mortgages and home equity loans? -
✔✔The existing policy must be sufficient to cover the secondary lien, with an
appropriate endorsement
✔✔Select from the list below the items that are exempt from flood insurance coverage. -
✔✔-property securing any loan with an original principal balance of $5,000 or less and a
repayment term of one year or less
--Any detached structure that is part of any residential property
--Mobile homes not affixed to a foundation
--Boathouse
✔✔The key provisions for private flood insurance include all of the following EXCEPT: -
✔✔Compliance aid for discretionary acceptance
✔✔If a financial institution is found to have a pattern or practice of violating the flood
insurance requirements, it can be assessed civil penalties of up to $_____ per violation,
not to exceed a yearly maximum amount as determined by a formula using the
Consumer Price Index. - ✔✔$2,187
✔✔Flood insurance is required for the __________of the loan on buildings or mobile
homes that meet the conditions. - ✔✔term
✔✔For the Insurance program to require placement, the community must participate in
the __________. (Hint - use the acronym) - ✔✔NFIP
✔✔The federal flood insurance rules require flood insurance coverage for any loan
secured by real estate located in an SFHA within participating communities; this
includes __________ mortgages, home equity loans, and lines of credit. - ✔✔second
✔✔Question: An institution that consistently violates these requirements is subject to
severe __________. - ✔✔fines
✔✔Select all the true statements regarding determination: - ✔✔--A financial institution
can require flood insurance even if the federal rules do not mandate it
--Your financial institution must retain a copy of the completed SFHDF for the period of
time the financial institution owns the loan
✔✔If your institution receives a Letter of Map Amendment or Letter of Map Revision
from the Flood Insurance Administration, you cannot require flood insurance on the
property. - ✔✔F
AND QUESTIONS SET A+
✔✔It is the customer's responsibility to ensure that flood insurance remains in place for
the term of the loan, and the lender is not required to monitor this. - ✔✔F
✔✔The requirement to escrow all premiums and fees for flood insurance applies to: -
✔✔Home equity lines of credit (HELOCs)
Loans with a business, commercial, or agricultural purpose
Construction or temporary financing loans with a term of less than 12 months
***None of the above
✔✔A financial institution is allowed to rely on Letter of Map Amendments or Letter of
Map Revisions when deciding not to require flood insurance. - ✔✔T
✔✔Flood insurance is required for: - ✔✔The term of the loan
✔✔The flood insurance requirements serve to ____ consumers by alerting them if their
real estate is located in a flood-prone area and to _____ them by requiring flood
insurance to be in place before a mortgage can be obtained. - ✔✔Inform / protect
✔✔Select all that apply. Flood insurance is required when: - ✔✔--A loan renewal on a
mobile home that is affixed to a permanent foundation located in an SFHA
--A home equity loan for a storage shed installation on a concrete pad located in an
SFHA
--A mortgage on a beach house located in an SFHA
--A loan for a travel trailer without wheels secured to a permanent foundation located in
an SFHA
✔✔Requires flood insurance for loans secured by real estate in SFHAs in participating
communities - ✔✔1973 Act
✔✔Requires mandatory forced placement of flood insurance - ✔✔1994 Act
, ✔✔Makes federally-subsidized flood insurance available - ✔✔1968 Act
✔✔How is flood insurance provided for second mortgages and home equity loans? -
✔✔The existing policy must be sufficient to cover the secondary lien, with an
appropriate endorsement
✔✔Select from the list below the items that are exempt from flood insurance coverage. -
✔✔-property securing any loan with an original principal balance of $5,000 or less and a
repayment term of one year or less
--Any detached structure that is part of any residential property
--Mobile homes not affixed to a foundation
--Boathouse
✔✔The key provisions for private flood insurance include all of the following EXCEPT: -
✔✔Compliance aid for discretionary acceptance
✔✔If a financial institution is found to have a pattern or practice of violating the flood
insurance requirements, it can be assessed civil penalties of up to $_____ per violation,
not to exceed a yearly maximum amount as determined by a formula using the
Consumer Price Index. - ✔✔$2,187
✔✔Flood insurance is required for the __________of the loan on buildings or mobile
homes that meet the conditions. - ✔✔term
✔✔For the Insurance program to require placement, the community must participate in
the __________. (Hint - use the acronym) - ✔✔NFIP
✔✔The federal flood insurance rules require flood insurance coverage for any loan
secured by real estate located in an SFHA within participating communities; this
includes __________ mortgages, home equity loans, and lines of credit. - ✔✔second
✔✔Question: An institution that consistently violates these requirements is subject to
severe __________. - ✔✔fines
✔✔Select all the true statements regarding determination: - ✔✔--A financial institution
can require flood insurance even if the federal rules do not mandate it
--Your financial institution must retain a copy of the completed SFHDF for the period of
time the financial institution owns the loan
✔✔If your institution receives a Letter of Map Amendment or Letter of Map Revision
from the Flood Insurance Administration, you cannot require flood insurance on the
property. - ✔✔F
