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?
Correct Answer
C) 45 days from loan origination
Under the Flood Disaster Protection Act, if a lender discovers that a loan secured by property in an SFHA lacks required flood insurance, force-placed coverage must be obtained within 45 days of the loan origination, regardless of when the deficiency is discovered.
Why This Is the Correct Answer
Under the Flood Disaster Protection Act, if a lender discovers that a loan secured by property in an SFHA lacks required flood insurance, force-placed coverage must be obtained within 45 days of the loan origination, regardless of when the deficiency is discovered.
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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?
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