Flood FAQs #41 – Does the Regulation apply where the lender takes a security interest in a building or mobile home located in an SFHA only as an ‘‘abundance of caution’’?

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Q:  Does the Regulation apply where the lender takes a security interest in a building or mobile home located in an SFHA only as an ‘‘abundance of caution’’?
 
A:   Yes. The Act and Regulation look to the collateral securing the loan. If the lender takes a security interest in improved real estate located in an SFHA, then flood insurance is required.
 
 
 
ADDITIONAL INFORMATION – This Q&A was included in the “Interagency Questions and Answers Regarding Flood Insurance.”   For ease of collection, this has been obtained from the FDIC’s Compliance Examination Manual – April 2016, which may be found here:  https://fdic.gov/regulations/compliance/manual/5/V-6.1.pdf
 

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