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We are working on a loan that will be a 2nd mortgage on a RV Park that a has a commercial building (store), and a second building that is a pavilion with storage area that are located in a flood zone. We already require flood insurance on the first mortgage, which was closed about a year ago, for both buildings and the contents of each building because we had filed a UCC. The borrower is requesting $350,000 to do improvements to the property, inside the store, and tear down the old pavilion and build another. If the 2nd mortgage is secured by the property and contents do we have to do an updated list on the contents and possibly require more flood insurance? If we do the 2nd mortgage without the contents as collateral do we have to update the contents list and not worry about increasing flood on the contents? Lastly, we are considering using a different property as collateral and not taking a 2nd on the RV Park. If we don’t take a second on the RV Park do we not have to worry about reassessing the required amount of flood insurance for the 2 buildings and their contents?
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