The rules have been around since 1996 (and the law even longer), yet examiners continue to cite numerous violations and fines. Flood insurance is always one of the regulators’ principal areas of concern. We’ve also had changes in the rules over the years due to several statutory changes and other regulatory clarifications. Fortunately, we have detailed Interagency Questions and Answers that clarify many points regarding the changes, which is certainly welcome.
Nevertheless, there are many significant issues out there. In this day-long streaming event, we’ll concentrate on them, including determinations, disputes, mapping (including Risk Rating 2.0), monitoring, contents coverage, private policies, amount of coverage, force-placement, and escrow requirements, among many others. We’ll devote special attention to those issues that typically cause lenders problems, as well as those that are the focus of many a regulatory violation and fine.
We’ll also provide links to many helpful resources. Come prepared with your questions, as this is the time to understand all the intricacies of the rules and ensure your processes are up to date and correct.
What You’ll Learn
- What exactly do the flood insurance rules cover? “Covered loan” vs. “Designated loan”
- What is an insurable structure or an insurable mobile home?
- How do we deal with attached garages?
- Flood insurance in construction settings
- Determinations: when you must do them, reliance upon previous determinations, disputes over their results, and the role of life-of-loan coverage
- Determining flood zone status yourself
- Flood zone discrepancies – how to deal with them (hint: you don’t have to anymore)
- Risk Rating 2.0 – what is it and what does it mean?
- Participating communities – what this means and how to find out
- Insurable value – what is it and how is it calculated? Is it 100% RCV? (hint: not necessarily)
- Differences in the types of structures and impacts on coverage amounts – what about abandoned or worthless structures?
- Coverage Amounts: “Normal” situations, condo coverage (including the RCBAP), multi-structure, and construction situations
- What you have to do vs. best practices (i.e., what you can do)
- Minimum requirements, and you can always do more
- “Knowledge is King” – when you have to know
- Documentation and retention: the Standard Flood Hazard Determination
- Form, notice to customers, and proof of insurance – what you must maintain
- What do you have to monitor?
- The types of policies and their limitations, including NFIP and private policies
- Private flood policies – criteria for acceptance and best practices
- Insuring multiple structures
- Force-placing insurance – when, why, and how
- Insurance premiums and potential future Congressional action
- What to do if (when) the NFIP lapses
- Continuing regulatory expectations – a look to the future
Who Should Attend
This session will give an in-depth understanding of these rules and is imperative for anyone performing duties in real estate lending areas of the financial institution. This includes loan officers, supervisors, auditors, closing agents, compliance officers, trainers, and others working in these types of positions.