A lender discovers that flood insurance is required for a property after the Closing Disclosure was issued, adding $1,200 annually to the borrower's costs. The borrower objects to the additional cost. What is the lender's obligation?
Correct Answer
C) Provide corrected Closing Disclosure reflecting the flood insurance requirement
Discovery of required flood insurance constitutes a changed circumstance beyond the lender's control. The lender must provide a corrected Closing Disclosure showing the additional insurance requirement and associated costs, regardless of borrower objection.
Why This Is the Correct Answer
Discovery of required flood insurance constitutes a changed circumstance beyond the lender's control. The lender must provide a corrected Closing Disclosure showing the additional insurance requirement and associated costs, regardless of borrower objection.
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