All in Flood

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.

Why We Need Flood Insurance

Adam Witmer
Flood

The last few weeks have felt like a tropical rainforest.  We have had more rain than I can remember having in just a few weeks time and our area is starting to see the problems with this.  For example, my father-in-law has a rental property I had to go to last week that was almost underwater.  The rain was coming down so fast that it had nowhere to go.  In fact, the furnace vents are under the floor of the house and...

Understanding the Detached Structure Flood Insurance Exemption

Adam Witmer
Flood

Flood insurance rules have been a moving target in recent years.  Flood rules as we knew them changed overnight with the Biggert Waters Flood Insurance Reform Act of 2012.  Then, the rules changed again with the Homeowners Flood Insurance Affordability Act of 2014.  Furthermore, FEMA rescinded their longstanding guidance and the regulators have been slow to implement rules for both Biggert Waters and the Affordability Act.  Under the old rules, it was a known fact that a lender had to require a separate flood insurance policy for each...

Reusing a Flood Determination

Adam Witmer
Flood

Community banks and credit unions often do everything they can to keep loan costs down for their customers.  They will waive fees, reduce rates, and even forego certain loan related activities in order to keep their customers satisfied.  One of the ways financial institutions will try to save money for their customers is to reuse a flood determination from a prior loan.  Any time a lender makes, increases, renews, or extends (MIRE) a loan secured by a structure, the lender must...