A borrower's property is located in a Special Flood Hazard Area (SFHA) with an existing flood insurance policy that expires 15 days after the scheduled loan closing. What action must the lender take?
Correct Answer
B) Require evidence that the policy will be renewed before closing
Under the Flood Disaster Protection Act, lenders must ensure continuous flood insurance coverage throughout the life of the loan. The lender must require evidence that the existing policy will be renewed or replaced before it expires to maintain uninterrupted coverage.
Why This Is the Correct Answer
Under the Flood Disaster Protection Act, lenders must ensure continuous flood insurance coverage throughout the life of the loan. The lender must require evidence that the existing policy will be renewed or replaced before it expires to maintain uninterrupted coverage.
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A lender quotes an APR of 4.25% on a mortgage loan, but the actual APR calculation results in 4.28%. Under TILA's APR accuracy tolerance, is this disclosure compliant?
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A lender discovers 45 days after closing that a loan in an SFHA was funded without required flood insurance. What is the maximum time frame the lender has to obtain force-placed coverage?