[April]

If we are writing a new loan and pull a flood determination, and the loan does not close within 30 days of pulling the flood determination, is the flood stale and we should pull another?
I am asking because we normally pull the flood after we receive the appraisal but if the property is in a flood zone the customer might decide they want to back out of the loan. If the flood had been pulled first then we would not have had the expense and time of ordering an appraisal. but we don’t want to pull the flood first if it is stale after 30 days, which is confusing to me because if you pull a LOL flood then when does that actually begin, at time of application or when the actual loan is made?

[rcooper]

I have never heard that a flood determination is stale after 30 days. Has someone told you this?

As for life of loan monitoring, it is different and separate from your initial requirement to determine if your collateral will be in a flood zone. Initially you will do the determination and then the flood monitoring company provides life of loan monitoring for your loans that you’ve done determinations on. The life of loan comes into play if there are any map changes, etc. that will change the status of a loan’s flood determination.

You may be thinking about rule that on using previous determinations. Here is what the OCC’s handbook says:

An institution may rely on a previous determination when it increases,
extends, renews, or purchases a loan. Prior determinations may not be used
when a bank makes a loan. However, subsequent transactions by the same
institution with respect to the same property, such as assumptions,
refinancings and junior lien loans, are considered renewals. A new
determination would not be required in those circumstances, assuming the
following conditions are met:
C The previous determination is not more than seven years old; and
C No new or revised flood map has been issued in the interim; and
C The determination was recorded on the SFHDF.

[April]

The Head of our Loan Processing Department said this is why we pull a flood AFTER we receive the appraisal instead of before, which I was unable to find but am fairly new to compliance so wanted to make sure I wasn’t missing something.

[Author]

Posts