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.