We have a loan that is in serious default and is less than 30 days from Deed in Lieu. The property is in a flood zone and the flood insurance will lapse next week. The loan has an escrow account, but it’s negative. We want to handle this situation properly and have researched 1024.17(k)(5), which only seems to apply to hazard insurance and also have read through FDIC Flood Insurance Compliance Manual. Do we need to pay the insurance policy out of the escrow account or is it ok for us to go ahead and force place flood insurance?