June 17, 2011 at 2:07 pm EDT #2355AnonymousGuest
We’ve been notified by our flood company that several properties are now located in a special flood hazard area due to a map change. City officials say that the properties are NOT in a flood zone because there is a previous letter of map revision that’s not reflected on FEMA’s new maps. The city officials also say they’ve been in contact with FEMA to get this corrected. We passed the information along to our flood company, who did find a reference that the LOMR is currently under review, but the current FEMA maps must be used.
We’ve decided to go ahead and now send the 45 force place letter with the required notice to the affected customers. However, if FEMA does not make the corrections, we may end up having to force place because some of the customers have been in contact with city officials who have informed them that their property is not in a flood zone.
How will examiners view the timing issue? Maps were effective in early May. Flood company sent notification to the bank 3 weeks later, but because of researching this problem and trying to get information, the written force place letter wasn’t sent out until this week.July 19, 2011 at 4:00 am EDT #2681JGo9Participant
First off I sympathize with your situation as I’ve had to deal with a similar one before. The long and short of it is that you need to use the most recent FEMA maps. Now if you have something from FEMA that shows where the LOMA determined the building to not be in a flood zone then I that should be sufficient for you to end the conversation on the flood issue.
LOMA’s in my experience can take several months to come back with an answer. I’m thinking it took us 6 months to get ours back.
As far as notifying the customer of the requirement and force placement of the insurance; you’ve got 45 days from when you were notified about the change in the map. If you are still waiting to sort things out and/or waiting on the LOMA when 45 days past, then you’ll need to go ahead and force place the flood insurance if it’s not already in place.
If the LOMA comes back and is determined that the building is not in a flood zone then the insurance company should reimburse on the amount paid for the insurance; so the customer is not out anything in that case.
Your clock for the 45 days should start when you were notified of the change. I’m assuming you had life of loan on this loan and your service provider had a delay in notifying you. We’ve had the same thing happen to us a few times. The maps had changed, months past, and then we were notified of the changes.
I hope this helps KT and if need additional follow up, just let me know.
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