8/29/2007 - Examiners Focusing on Flood Zone Match Requirements

Flood Zone & Insurance Policy Conflict
Answer by Dan Persfull, BOL Guru

Question: Is it a violation if your flood hazard determination reflects one flood zone, but the insurance policy reflects a different zone? Do the examiners focus on the zones or mainly sufficient coverage/timing?

Answer: This has been a very hot topic in the public forum and a search on flood zone mismatches will produce several discussions. An improper zone rating will jeopardize your coverage and if done intentionally by the agent strictly to save the client money it could also be considered insurance fraud. The regulators, the FDIC anyway, looks at the zone matches as well as the coverage and timing requirements. Unless the property qualifies for the grandfathering exemptions we require the zones to match.

First published on BankersOnline.com 7/23/07
Original Article Located at http://www.bankersonline.com/lending/guru2007/gurus_ldng072307e.html.

5/11/2006 - Changes to SFHD Form

The standard Flood Hazard Determination form has been changed. The new expiration date on the SFHD form is now 10/31/2008. The new header on the form reads "Department of Homeland Security." The new form is required to be compliant with the National Flood Insurance Program.

11/30/2004 - Office of Thrift Supervision Introduces the New EXAMINATION HANDBOOK Update

The OTS has issued its new Examination Handbook effective November 30, 2004 that combines safety and soundness and compliance guidelines. This new handbook will eventually replace the Thrift Activities (TAH) and Compliance Activities Handbook (CAH). For the complete story please visit the OTS’s website at www.ots.treas.gov.

8/5/2004 - Uniform Residential Mortgage Satisfaction Act Completed by Uniform Law Commissioners

A new law addressing the problems that frequently arises in the process of paying off a mortgage loan was approved by the National Conference of Commissioners on Uniform State Laws (NCCUSL) at its 113th Annual Meeting in Portland, Oregon. The Uniform Residential Mortgage Satisfaction Act provides rules and procedures for the clearance of fully paid real estate liens from the real property records in every state.

Currently, all states have laws in place that require a mortgagee to promptly provide title-clearing documentation; however, these laws vary widely in both notice requirements and enforcement provisions. The Uniform Residential Mortgage Satisfaction Act establishes time periods for recording satisfactions, and penalties when not achieved. Penalties start with actual damages sustained by the mortgagor if a lien is not released within 30 days, to civil fines/damages if a lien is not released within 60 days. The law attempts to provide adequate incentive for loan servicing agents to act quickly in performing this fiduciary duty.

For more information about this Act, and how UPF’s Intellicon Reconveyance Service can virtually eliminate all of the risk and liability associated with the lien release process, please contact Randy Absalonson at 1-888-873-5663 or randy@upfinc.com.

6/30/2004 - Flood Insurance Bill is Passed

The Flood Insurance Reform Act of 2004 (S. 2238) has been approved by the U.S. Senate Banking, Housing and Urban Affairs Committee, the U.S. House of Representatives, and was signed by President George Bush on June 30, 2004.

This bill provides for:

Reauthorization of the National Flood Insurance Program (NFIP) through September 2008;
Increase in premiums and compliance reforms for policyholders with repetitive flood losses;
NFIP changes that would provide more detailed policy information to policyholders.