[PAULM]

Good Afternoon Mr. Jack,
This is Paul Melancon and I attend the annual LBA seminars you host in Baton Rouge. I hope you are dealing well with all of these obstacles the universe has been throwing our way.
I have a question about force placing flood coverage on a loan with two structures (both in flood zone A) on the same parcel of land…

The two building in question are both rental homes and one has a NFIP flood policy for $30,000 of coverage (we’ll call it Building A) and the other has no flood coverage in place (Building B). The loan balance is $29,630 so the one flood policy covers the loan amount, but I am aware EACH structure must have some coverage in order to be compliant to the regs. The bank is aware that building B is in poor condition and is currently unoccupied. I did verify with our force-place provider that the force-place flood deductible is $1,000. I’m trying to force-place as little flood coverage as possible, while being compliant. I’m thinking we can force-place building B for $2,000 (the deductible amount plus $1,000). Do you think this is acceptable or do you have any suggestions on how you’d proceed?

***Also, I know flood exemption rules (item C) allows exemption on any structure that is a part of any residential property but is detached from the primary residential structure of such property and does not serve as a residence. Does this exemption apply when the main structure is a rent houses or homes that are not a borrower’s primary residence? ***

Many thanks for your time and consideration and have a great weekend.

[Author]

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