A question we received from a member:
I am currently working on flood review and have found a few loans that have a detached structure but we don’t have a separate policy for these structures. As a bank we are taking advantage of the new detached structure rule and not requiring insurance on detached structures. Do you think we should send the detached structure notice to our existing customers as we discover they have detached structures with no separate insurance coverage since we aren’t requiring the coverage?
Although this specific scenario isn’t mentioned in the statute or the proposed regulation, I believe it would be prudent to send the borrowers the notice if the detached structure exemption will be utilized. Here’s a link to an article Jack posted on detached structures: https://www.jackscomplianceresource.com/affordability-act-controversy-on-detached-structures/. We hope to have more clarification when the agencies’ finalize their amendments to the flood regulations.