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This 1968 federal law created the National Flood Insurance Program.
What is the National Flood Insurance Act of 1968?
FEMA-designated areas subject to a 1% annual chance of flooding (the “100-year floodplain”), which trigger the mandatory purchase requirement.
What is a Special Flood Hazard Area (SFHA)?
The form lenders use to document their determination of whether a building securing a loan is located in an SFHA.
What is the Standard Flood Hazard Determination Form (SFHDF)?
The federal agency that administers the NFIP and publishes Flood Insurance Rate Maps
What is the Federal Emergency Management Agency (FEMA)?
The general rule requiring a lender to ensure flood insurance is in place before making, increasing, extending, or renewing a loan secured by a building in an SFHA located in a participating community.
What is the mandatory purchase (mandatory flood insurance) requirement?
Required flood insurance coverage must equal the lesser of the outstanding principal balance of the loan, the maximum coverage available under the NFIP for the property type, or this third benchmark.
What is the insurable value of the property?
The disclosure a lender must provide to the borrower (and, for servicing purposes, to the servicer) within a reasonable time before loan closing, informing them the property is in an SFHA and that flood insurance is required.
What is the Notice of Special Flood Hazards?
This 2012 statute began phasing out certain NFIP premium subsidies and first required lenders to accept qualifying private flood insurance.
What is the Biggert-Waters Flood Insurance Reform Act of 2012?
This four letter acronym stands for the life of loan events that trigger a lender's duty to reassess flood insurance requirements.
What is a MIRE event?
Supplemental NFIP coverage that reimburses a portion of costs incurred to comply with state or local floodplain management ordinances after a flood-damaged structure is declared substantially damaged.
What is Increased Cost of Compliance (ICC) coverage?
If a lender determines flood coverage is insufficient or has lapsed, it must notify the borrower that the lender will force-place coverage if the borrower does not obtain adequate insurance within this number of days.
What is 45 days?
Categories of detached structures on residential property that are exempt from the mandatory purchase requirement, provided they do not also serve as a residence.
What is the detached structure exemption?
Name the general category of loans exempt from the escrow requirement for regulated lending institutions with total assets under $1 billion that meet the statutory conditions
What is the small lender exception (small servicer/small institution exemption)?
Under the private flood insurance rule, the category of non-NFIP policies a lender MUST accept if the policy satisfies the regulatory definition and compliance-aid criteria (e.g., issued by a licensed/eligible insurer, containing specified provisions comparable to NFIP protections).
What is (mandatory-acceptance) private flood insurance?
The general term for a lender’s obligation to monitor a property’s flood zone status and insurance coverage for as long as the loan remains outstanding, whether through in house processes or a third-party vendor.
What is life-of-loan flood determination monitoring?
This 2014 statute reversed some Biggert-Waters subsidy phase-outs, restored certain grandfathering protections, and reinstated the mandatory escrow requirement for flood insurance premiums.
What is the Homeowner Flood Insurance Affordability Act (HFIAA) of 2014?
The number of days a lender or servicer must provide notice to a borrower before force-placing flood insurance when coverage is inadequate or lacking.
What is 45 days?
The type of coverage arrangement offered by certain faith-based or community organizations that may satisfy the mandatory purchase requirement if it meets criteria published by FEMA and applicable state regulation.
What is a mutual aid society plan?
This MIRE event, distinct from originating a brand new loan, occurs when a borrower and lender modify terms such as extending the maturity date or increasing the principal balance.
What is increasing or extending a loan?
Name the enforcement mechanism available to the federal banking agencies when a lender or servicer engages in a pattern or practice of flood insurance violations, assessed on a per-violation basis and set by statute at an inflation-adjusted amount.
What is a civil money penalty (CMP) under 42 U.S.C. § 4012a(f)?
Cite the specific interagency codification of the flood insurance rule applicable to state member banks under Regulation H, including the CFR part and subpart.
What is 12 CFR Part 208, Subpart H (specifically § 208.25)?
When a lender force places flood insurance, coverage may be backdated to this point in time to cover any lapses in the borrower's required coverage.
What is the date the borrower's coverage lapsed?
Distinguish “force-placement” from the borrower notice requirement: identify what a lender must do with force-placed premiums/fees once it determines the borrower has obtained (or the lender has confirmed) adequate coverage that was in place during the force-placement period.
What is refunding the force-placed premium and any related fees for any period of overlapping coverage, within a specified number of days of that determination?
If a borrower provides proof of their own adequate flood insurance within 30 days after a lender force-places insurance, the lender must take this action regarding the force-placed premium.
What is refund the force-placed premium (and terminate the force-placed policy)?