Flood FAQs #45 – When a regulated lender makes a designated loan and will be servicing that loan, what are the requirements for notifying the Director of FEMA or the Director’s designee?

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Q:  When a regulated lender makes a designated loan and will be servicing that loan, what are the requirements for notifying the Director of FEMA or the Director’s designee?
 
A:   FEMA stated in a June 4, 1996, letter that the Director’s designee is the insurance company issuing the flood insurance policy. The borrower’s purchase of a policy (or the regulated lender’s force placement of a policy) will constitute notice to FEMA when the regulated lender is servicing that loan.
 
In the event the servicing is subsequently transferred to a new servicer, the regulated lender must provide notice to the insurance company of the identity of the new servicer no later than 60 days after the effective date of such a change.
 
 
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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