Flood on a Mobile Home w/Deck

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Question:

We have a bank client who made a loan to a customer with property as collateral that is located in a flood zone. The property has a mobile home on it, but the bank only took the land as collateral. The mobile home is able to be moved from the property, but there is a deck around it that is attached to the property. Would this loan be required to have flood insurance even though the mobile home is not part of the collateral?

Answer:

Since there is a deck around the MH you have to determine if the MH is now considered part of the real property. If it is your mortgage will automatically give you a security interest in it making the loan a designated loan.

Your taxing authority should be able to tell you if it is being taxed as real property or personal property.

First published on BankersOnline.com 2/7/11