FLOOD INSURANCE COMPREHENSIVE ANSWERS
AND QUESTIONS SET A+
✔✔When a bank transfers a loan to another servicer, what must it do and when? - ✔✔It
must notify "Administrator of FEMA" which apparently is designated as insurance
carrier. So must notify insurance carrier or new servicer, its address, and the loan and
security property. MUST DO SO within 60 days of effective date of transfer. Purpose of
this is so insurance carrier can notify servicer 45 days before cancelling/expiration of
plan.
✔✔What records must be kept for flood and how long? - ✔✔Must keep SFHDFs and
records of the receipt of notice of SFHs to borrower and SERVICER. These MUST be
kept for as long as the institution owns the loan.
✔✔What are the penalties for flood insurance violations? How long is the statute of
limitations for penalties being imposed? - ✔✔You can't impose penalties more than 4
years back from violation date. Max CMP is 2k per violation. FEMA gets penalties.
✔✔If a bank purchases a loan in a SFHA, what does the reg require it to do? -
✔✔Nothing actually. Purchasing doesn't trigger requirements. However, if table funding,
bank still must make sure requirements are followed.
✔✔What percentage of a building should be residential for it to be considered
"residential" for FI purposes? - ✔✔Basically no more than 25% can be non-residential
and 50% would apply for single-family residences.
✔✔Are hotels considered residential? Are nursing homes considered residential? -
✔✔Hotels are if there guest stay on average at least 6 months. Nursing homes are NOT
residential.
✔✔Are buildings under construction eligible for FI? - ✔✔Yes, but only if there has been
construction in the last 90 days. AND coverage would start upon construction beyond
excavation. i.e. foundation is poured or pillars erected.
AND QUESTIONS SET A+
✔✔When a bank transfers a loan to another servicer, what must it do and when? - ✔✔It
must notify "Administrator of FEMA" which apparently is designated as insurance
carrier. So must notify insurance carrier or new servicer, its address, and the loan and
security property. MUST DO SO within 60 days of effective date of transfer. Purpose of
this is so insurance carrier can notify servicer 45 days before cancelling/expiration of
plan.
✔✔What records must be kept for flood and how long? - ✔✔Must keep SFHDFs and
records of the receipt of notice of SFHs to borrower and SERVICER. These MUST be
kept for as long as the institution owns the loan.
✔✔What are the penalties for flood insurance violations? How long is the statute of
limitations for penalties being imposed? - ✔✔You can't impose penalties more than 4
years back from violation date. Max CMP is 2k per violation. FEMA gets penalties.
✔✔If a bank purchases a loan in a SFHA, what does the reg require it to do? -
✔✔Nothing actually. Purchasing doesn't trigger requirements. However, if table funding,
bank still must make sure requirements are followed.
✔✔What percentage of a building should be residential for it to be considered
"residential" for FI purposes? - ✔✔Basically no more than 25% can be non-residential
and 50% would apply for single-family residences.
✔✔Are hotels considered residential? Are nursing homes considered residential? -
✔✔Hotels are if there guest stay on average at least 6 months. Nursing homes are NOT
residential.
✔✔Are buildings under construction eligible for FI? - ✔✔Yes, but only if there has been
construction in the last 90 days. AND coverage would start upon construction beyond
excavation. i.e. foundation is poured or pillars erected.
