A property is located in a Moderate-to-Low Risk Zone (Zone X) according to the FIRM, but recent flooding has occurred in the area. What is the lender's flood insurance requirement?
Correct Answer
C) No flood insurance requirement under federal law
The Flood Disaster Protection Act only mandates flood insurance for properties located in Special Flood Hazard Areas (SFHAs). Properties in moderate-to-low risk zones are not subject to mandatory flood insurance requirements under federal law, regardless of recent flooding.
Why This Is the Correct Answer
The Flood Disaster Protection Act only mandates flood insurance for properties located in Special Flood Hazard Areas (SFHAs). Properties in moderate-to-low risk zones are not subject to mandatory flood insurance requirements under federal law, regardless of recent flooding.
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A borrower's homeowners insurance premium increases by $300 annually after the Closing Disclosure was issued, discovered during the final insurance verification. This change affects the monthly payment by $25. What action is required?
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Under HOEPA, a first-lien mortgage is considered a high-cost mortgage if the APR exceeds the average prime offer rate (APOR) by more than: