All in Flood

What to do if the NFIP Expires?

Adam Witmer
Flood, Regulatory Update

Every couple of years, the National Flood Insurance Program (NFIP) gets set to expire.  This is a result of the way Congress funds the program as the typically only renew the program for a few years at a time.  That is, if they renew the program on time.

Often times, the program is operating at a loss and Congress has a difficult time passing a long-term approval of the program.  When this happens, the program is typically reapproved on a short-term basis, but there are cases where the program expires.

Flood Insurance for a Building with No Value

Flood Insurance for a Building with No Value

Adam Witmer
Flood

Is flood insurance required for an old dilapidated building that has no value to either the owner or lender? Adam uses this Compliance Clip (video) to answer this question and provide the regulatory guidance used to support his answer. As flood insurance penalties are easily assessed for even just a few violations, financial institutions need to ensure they don't get washed out with rogue lenders not following the rules. Oh yeah, there might even be a flood pun or two in this video.

Adding Force Place Flood Insurance Premium to Loan Amount

Adam Witmer
Flood

When a customer doesn’t pay their flood insurance premiums and allows their flood insurance to lapse, financial institutions are required to force-place flood insurance for an appropriate amount.  While customers who allow their flood insurance coverage to lapse often do so because they can’t or don’t want to pay for such coverage, it can be difficult for financial institutions to collect for the premiums (or cost) of the force-placed flood insurance.

Closing a Loan with Force Placed Flood Insurance

Closing a Loan with Force Placed Flood Insurance

Adam Witmer
Flood

Adam uses this Compliance Clip (video) to answer the question: Can you close a loan with force placed flood insurance? This question often comes up when an applicant has an existing loan with force placed flood insurance coverage and wants to refinance. Adam explains the conservative approach that will ensure compliance with flood insurance rules.

Congress Extends National Flood Insurance Program

Adam Witmer
Regulatory Update, Flood

On Tuesday, July 31, President Trump signed a four-month extension of the National Flood Insurance Program (NFIP) into law. As has been the case several times this year, the NFIP was set to expire on 7/31/2018 if congress did not step up and renew the program.  Though the House of Representatives had passed the renewal a while back, the Senate did not extend the program until the last minute before the program was set to expire - at midnight on 7/31/18. This short term, temporary extension is the…

Closing a Loan with Force Placed Flood Insurance

Adam Witmer
Flood

Flood insurance is a challenge for both consumers as well as financial institutions.  The rules are complex, cumbersome, and flood insurance can be extremely expensive - so expensive, in fact, that some consumers have found it more affordable to pay for forced placed flood insurance than to get a separate flood insurance policy.  While this this current trend can help to save the customer some money in the short run, it could cause some compliance challenges down the road.

Flood Insurance For Structures With No Appraised Value

Adam Witmer
Flood

We all know that the flood insurance rules apply when a loan is secured by a primary residence or a warehouse in which a business operates.  These situations are very straightforward and would seem logical to be subject to flood insurance rules. The challenge with flood insurance, however, relates to less common situations that wouldn’t seem logical for the rules to apply.  For example, many commercial lenders don’t think that flood insurance rules should apply when a structure is not given any value on an appraisal, even though it is technically part of the loan collateral.

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