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If possible, I’d like to verify my understanding of flood regulations on a couple of items. Could anyone offer some thoughts on the following?
1) A commercial loan is made. The building is in a SFHA, but only the contents in the building are taken for collateral, not the building itself. Under Flood regulations, flood insurance is not required on the contents, but could be required by the Bank at our discretion.
2) 2 commercial loans are made simultaneously to the same borrower. Loan #1 is secured by two buildings – both of which are in a SFHA. Loan #2 is secured by the contents of the two buildings held as collateral for loan #1. It is my understanding that under flood regulations, flood insurance would be required for both the buildings and contents of the buildings, since the buildings are held as collateral on a loan.
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