[Rich]

We have a customer that has requested that we force-place flood insurance on his loan. For as long as we’ve had the loan, we have done this. This time, the first notice went out 44 days prior to the expiration date of the flood insurance.

1. Does the fact that this customer requests us to force-place flood insurance matter? Do we still have to give him a 45 day notice?

2. Am I worrying over nothing because we were one day late sending out the letter? We did have some issues with flood insurance on our most recent Compliance Examination.

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[rcooper]

1. Does the fact that this customer requests us to force-place flood insurance matter? Do we still have to give him a 45 day notice?

Why does the customer want you to force-place the policy? If it is due to the paymen, have you considered escrowing for the flood insurance?
Regardless of the circumstances, if the customer has not obtained adequate flood insurance you would need to follow your force-placement procedures.

2. Am I worrying over nothing because we were one day late sending out the letter? We did have some issues with flood insurance on our most recent Compliance Examination.

Is the force-placed policy a MPPP policy? The MPPP has separate notification requirements, so your pre-expiration notice may or may not be a problem. This excerpt from the final rule highlights the difference:

Some commenters, including trade association commenters, recommended the Agencies issue guidance that would authorize a lender to follow a notification process similar to FEMA’s Mortgage Portfolio Protection Program (MPPP). The Agencies are aware of these alternative notification processes and appreciate the benefits of additional notices. The Agencies note that a regulated lending institution or its servicer, at its discretion, may send one or more additional notices prior to the expiration date as a courtesy to assist the borrower. However, in order to comply with this section, the regulated lending institution or its servicer still would be required to send the mandated 45-day notice following the lapse of the borrower’s policy.
https://www.gpo.gov/fdsys/pkg/FR-2015-07-21/pdf/2015-15956.pdf

Here’s a link to the MPPP notification requirements: https://www.fema.gov/media-library-data/1478271984247-21328c353d6c693452112933906eb219/MPPP_Guidelines_Requirements_2017FY.PDF

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