Flood Disaster Protection Act Flood Insurance and the NFIP
The National Flood Insurance Act of 1968 made federally subsidized flood insurance available for improved real estate located in a Special Flood Hazard (SFHA) area. The Flood Disaster Protection Act of 1973 requires that institutions require flood insurance on loans secured by improved real estate located in an SFHA. From the NFIA and the FDPA, the National Flood Insurance Program (NFIP) came into existence. The NFIP determines flood zones and flood maps, so that each property, throughout the United States, can be determined to be in, or not in, a flood zone.
Flood Disaster Protection Act Flood Compliance
For both residential and commercial loan applications, institutions are required to determine if real estate collateral is in a flood zone, and to timely notify the borrower of the results. For collateral in a flood zone, a borrower must obtain flood insurance prior to loan closing; alternatively, the lender must "force place" such flood insurance. There are also detailed regulatory requirements as to the amount of flood insurance required for the property and for contents, renewal of coverage, notifications to borrowers, and monitoring for any flood zone map changes.
Why Use Us for Flood Compliance
Flood regulatory requirements are some of the least understand and poorly navigated regulatory areas, resulting in a significant number of Civil Money Penalties (CMPs) levied against institutions for repeated and systemic Flood regulatory violations. We have engaged in flood violation remediation and have developed processes to correct Flood violations and establish Flood regulatory compliance processes going forward.
Reach Out to Us Today
Let us help you remediate Flood errors and establish a compliant Flood regulatory program. Reach out today for a free consultation !