Int Q&A – Servicing 5 – If the loan and its servicing rights are sold by the lender, is the lender required to provide notice to the Administrator or the Administrator’s designee (i.e., the insurance provider)?

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Q:  Servicing 5 – If the loan and its servicing rights are sold by the lender, is the lender required to provide notice to the Administrator or the Administrator’s designee (i.e., the insurance provider)?
 
A:   Yes, in the case of an NFIP policy. Failure to provide such notice would defeat the purpose of the notice requirement because FEMA would have no record of the identity of either the owner or servicer of the loan.
 
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.
 
 
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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