SUMMARY OF THE FLOOD REFORM ACT- PART 2




		SUMMARY OF THE FLOOD REFORM ACT- PART 2 Fees for Determining Applicability of Flood Insurance Purchase Requirements - "...any person who makes a loan secured by improved real estate or a mobile home or any servicer for such a loan may charge a reasonable fee for the costs of determining whether the building or mobile home securing the loan is located in an area having special flood hazards, but only in accordance with the following requirements: (1) Borrower Fee - The borrower under such a loan may be charged the fee, but only if the determination -- (A) is made pursuant to the making, increasing, extending, or renewing of the loan that is initiated by the borrower; (B) is made pursuant to a revision or updating...of the flood plain areas and flood-risk zones...; or (C) results in the purchase of flood insurance coverage... (2) Purchaser or Transferee Fee - The purchaser or transferee of such a loan may be charged the fee in the case of sale or transfer of the loan." Notice Requirements - Prior to making a loan on a property in a SFHA, lenders are required "to notify the purchaser or lessee (or obtain satisfactory assurances that the seller or lessor has notified the purchaser or lessee) and the servicer of the loan of such special flood hazards, in writing, a reasonable period in advance of the signing of the purchase agreement, lease, or other documents involved in the transaction. The regulations shall also require that the regulated lending institution retain a record of the receipt of the notices by the purchaser or lessee and the servicer." Contents of the Notice - "Written notification required...shall include - (A) a warning, in a form to be established by the Director, stating that the building on the improved real estate securing the loan is located, or the mobile home securing the loan is or is to be located, in an area having special flood hazards; (B) a description of the flood insurance purchase requirements under section 102(b) of the Flood Disaster Protection Act of 1973; (C) a statement that flood insurance coverage may be purchased under the national flood insurance program and is also available from private insurers; and (D) any other information that the Director considers necessary to carry out the purposes of the national flood insurance program." Notification To Director of Change of Servicer - Regulated lending institutions are required "to notify the Director (or the designee of the Director) in writing during the term of the loan of their servicer of the loan. Such institutions shall also notify the Director (or such designee) of any change in the servicer for the loan, not later than 60 days after the effective date of such change. Upon "any change in the servicing of a loan, the duty to provide notification under this subsection shall transfer to the transferee servicer of the loan." Notification of Expiration of Insurance - "The Director (or the designee of the Director) shall, not less than 45 days before the expiration of any contract for flood insurance under this title, issue notice of such expiration by first class mail to the owner of the property covered by the contract, the servicer of any loan secured by the property covered by the contract, and (if known to the Director) the owner of the loan." We hope you found this short summary helpful. If you would like more information, or a free copy of the most recent FEMA Publication, "Manadatory Purchase of Flood Insurance Guidelines", please call 1-800-933-5663 ext. 100 and ask for Steve Straub. Receive A Detailed Information Package

Flood Zone Determinations \| Flood Insurance \| Portfolio Compliance Flood Insurance Tracking \| Company Information \| Customer Service Order A Determination Now \| Request A Flood Quote Now \| Set Up An Account E-mail: customerservice@americasflood.com © 2000 America's Flood Services, Inc. 800-933-5663 ext. 100