Q: Servicing 2 – When a lender makes a designated loan and will be servicing that loan, what are the requirements for notifying the Administrator of FEMA or the Administrator’s designee, i.e. the insurance provider?
A: Under the Regulation, the Administrator’s designee is the insurance company issuing the flood insurance policy. The borrower’s purchase of an NFIP policy (or the lender’s force placement of an NFIP policy) will constitute notice to the Administrator of FEMA when the lender is servicing that loan.
In the event the servicing is subsequently transferred to a new servicer, the 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.
In the case of a flood insurance policy issued by a private insurer, the lender should provide notice to the flood insurance provider. If the lender does not provide this notice to the flood insurance provider, the provider will be unable to properly administer the policy, such as by providing notice to the servicer about the expiration of the flood insurance policy.