A property is newly mapped into the flood area and now requires flood insurance. The bank then sends the borrower the 45-day letter stating they must obtain flood insurance within 45 days. The bank usually force places flood insurance from the day the letter is sent to the borrower.

Can the bank charge the borrower for the flood insurance for days 1-45 that is force-placed? I am told the bank can, but I don't think it is right to do this on newly mapped properties.

See FAQ FORCE PLACEMENT 16:

https://www.fdic.gov/sites/default/files/2024-03/fil22020a.pdf

I have read through the Q&A and I am still not clear on this. We received a notice of map change on 9/3/24 from a vendor with effective map dates of 7/31/24. We notified the borrower on 09/10/24 and started the 45 day letter cycle on that date. The question is, once that 45 days is up if they do not have insurance do we:
A) backdate the coverage to 7/31/24
B) backdate coverage to the day we notified the borrower
C) make the coverage effective the date the 45 day notice expires (So in this particular case, first notice on 9/10/24, 45 days later is 10/24/24)

No matter how many times I read through this I still can't understand. Am I missing something, or is this really unclear?

Well, to be fair to the customer I would be force placing at the expiration of the 45-day period, which you would be allowed to do.

As far as backdating a policy back to 7/31/24, if there was flood damage to the property between that date and the date you force placed the policy, good luck in getting the insurance company to actually honor the policy. Not sure how you can insure the property for damage that happened before the purchase of the policy.

Appreciate your response, and I would agree with you on both points.

Our vendor seems to be pushing back on this, and I struggle to find supporting evidence on my end given the way the regulation and Q&A are written. Any suggestions on how I can better please my case?

Also- do other lenders have issues with getting the map updates 30+ days after a remap?

Since there are no requirements for the lender to monitor for map changes, any issues with prompt notification are more of a contractual issue that you would have with your vendor that is providing your life of loan coverage.

I am unclear as to how a "vendor" pushes back on what the bank wants to do? Are they not a vendor and you are the client?

Have a similar issue. Map changed 09-26-2024 and the 45 day letter was mailed on 9-26-2024. The customer obtained flood insurance with effective date 10-24-2024. Our flood monitoring company wants to force placed from 9-26-2024 to 10-24-2024. Is that right?

Our flood monitoring company wants to force placed from 9-26-2024 to 10-24-2024.

Why? Because they get a cut of the commission? How do you insure a property for a period of time that has already passed? If that is possible, I am going to cancel all of my homeowner's insurances and just sign back up and have them backdated when there is a disaster.

We very seldom have a force placement issue but when we do, we force place the day we send the notice.