[Lexegay]

Our Flood Determination and Flood Notice is mailed out or hand delivered to the borrower along with the GFE and early TIL’s. Generally, we do not have the borrower sign any of the early documents. The flood notice is signed at closing. We have just had an internal audt and they say the flood notice must be signed at least 10 days prior to closing as notification the property is or is not located in a Special Flood Hazard Area.

Is our procedures sufficient being they are receiving notice at least 10 days prior to closing and giving their intent to proceed?

[jholzknecht]

You must provide a written notice a reasonable time (10 days is considered reasonable) before completion of the transaction. You must obtain a record of receipt of the notice. From your description it appears that the record of receipt indicates the notice is given at closing. You record of receipt should indicate that the borrower received the notice a reasonable period before completion of the transaction.

The early TIL and GFE do not require written acknowledgement of receipt so your procedures for those forms may be adequate. The Flood Hazard Notice is one of the few forms that require written acknowledgement.

The pertinent sections of the flood regulations are listed below.

§ 339.9 Notice of special flood hazards and availability of federal disaster relief assistance.
(a) Notice requirement. When a bank makes, increases, extends, or renews a loan secured by a building or a mobile home located or to be located in a special flood hazard area, the bank shall mail or deliver a written notice to the borrower and to the servicer in all cases whether or not flood insurance is available under the Act for the collateral securing the loan.

(c) Timing of notice. The bank shall provide the notice required by paragraph (a) of this section to the borrower within a reasonable time before the completion of the transaction, and to the servicer as promptly as practicable after the bank provides notice to the borrower and in any event no later than the time the bank provides other similar notices to the servicer concerning hazard insurance and taxes. Notice to the servicer may be made electronically or may take the form of a copy of the notice to the borrower.

(d) Record of receipt. The bank shall retain a record of the receipt of the notices by the borrower and the servicer for the period of time the bank owns the loan.

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