Timing flood coverage deficiency notices

Answered by:

Question:

What is an acceptable timeframe for our flood vendor to send life of loan monitoring updates for map changes? It seems our vendor sends them once a month, but they are dated throughout the past 30 days. Would it be acceptable to send notices to customers within 1 week of receipt of life of loan update?

Answer:

Your vendors are often monitoring and notifying hundreds of banks about map changes so it seems reasonable to me that they may take 30 to sometimes 60 days to notify you. This is spelled out in your contract with them. When you receive the notice; however, my opinion is that you should send the notice out as soon as you get it. Once you get the notice you now have knowledge of inadequate insurance and should notify the borrower right away. If a flood occurs while you are waiting to send the notice, I think you will have a hard time explaining “why” to a judge.
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