Int Q&A – Fees 1 – When can lenders or servicers charge the borrower a fee for making a determination?

Compliance > Lending > Flood > FAQs
Q:  Fees 1 – When can lenders or servicers charge the borrower a fee for making a determination?
 
A:   There are four instances under the Act and Regulation when the borrower can be charged a fee for a flood determination:

• When the determination is made in connection with the making, increasing, extending, or renewing of a loan that is initiated by the borrower;

• When the determination reflects a revision or updating by FEMA of floodplain areas or flood-risk zones;

• When the determination reflects FEMA’s publication of a notice or compendium that affects the area in which the security property is located, or FEMA requires a determination as to whether the building securing the loan is located in an SFHA; or

• When the determination results in force placement of insurance.

Loan or other contractual documents between the parties may also permit the imposition of fees.
 
 
ADDITIONAL INFORMATION:
This Q&A was included in the Interagency Questions and Answers Regarding Flood Insurance, which were issued on 05/11/2022.  They were published in the Federal Register on 05/31/2022 and may be found here:  https://www.federalregister.gov/documents/2022/05/31/2022-10414/loans-in-areas-having-special-flood-hazards-interagency-questions-and-answers-regarding-flood
 

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