We are in the midst of an internal deep dive audit of flood files and came across this interesting file:

A loan originated 9 years ago. The flood determination showed the subject property to be in a flood zone. Two years later, a LOMA was done (not at the request of our borrower, but some other unrelated party) which took the entire sub-division that our covered property is in, out of the flood zone. We were not notified by the borrower, nor our servicer.

We have inquired with the flood servicer and they did not know about the LOMA and they have updated their records for going forward.

The LOMA from FEMA states that FEMA only notifies the participating community and it is the community's responsibility to publish a notice informing borrowers, lenders and insurance agents. This could have happened, but this was in a west coast state and we are in the Midwest.

We did pay for Life of Loan monitoring for this loan. The servicer is not one of our standard flood vendors so there is not a written agreement that states what the servicer will do for the bank.

Question: Are Flood Servicers notified of LOMAs, or is that fine print disclosure in the FEMA documentation the actual procedure? The only notification being a Public Notice published by the participating community.

Question: What obligation does the bank have to refund five years of premiums? We feel it would be the right thing to do, but are trying to understand any regulatory obligation.

*Bump*

I can only suggest that you ask one of your contracted vendors how they handle. That would give you a good answer.

Howdy! I have lurked on this forum for a bit but I feel I can offer some value here to help shed some light on this question at least. My background is that I am a programmer and I have a flood mapping product I built. I have worked with over 12 Terabytes of FEMA data and analyzed the data structures at the most fundamental level.

The LOMA dataset which FEMA creates is actually very inconsistent. You would think that when a Subject* files for a Letter of Map Amendment which leads to the official map being amended that FEMA would precisely place the coordinates, but this is not the case.

The coordinates for LOMAs are placed using a "best effort." LOMAs can even be placed on top of each other, on the exact same geo-coordinates as a previous LOMA. Not to mention that the data is updated quite often on FEMA's end so if a provider isn't keeping their data updated, the margin for erroneous results widens.

So the problems can be two fold.

• How often does my provider update their data?
• How are they tracking LOMAs? Manually? Programmatically? A mixture of both?

I ended up creating an algorithm that takes the Subject's geo coordinates and calculates the distance to the LOMAs. The results are displayed on the map, logically grouped, clickable for detail. But I also created a handy html table with the results that the user can visually parse, to see if their Subject is close to a LOMA.

FloodHound Screenshot

I'm not sure what good this does you currently but hopefully you can file it under The More You Know(tm).

Feel free to ask me any further questions. I now know more than I ever thought I would about flood map data.

Jared

*A Subject is usually a home or property and is the primary item under observation during reporting