New Rules On Flood Insurance by David Sands, Partner Troop Mesinger Steuber & Pasich, LLP After much anticipation, the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Company (FDIC), Office of Thrift Supervision (OTS) and National Credit Union Administration (NCUA) finally issued their proposed regulations on flood insurance. These proposed regulations are important to lenders, servicers and borrowers -- not only will these regulations change the way lenders and servicers do business, they will also impact the cost of loan closings and loan transfers. While these regulations may change before they are finalized, credit card offer credit card offer it is not expected that the changes will be substantial. The following is a short summary of some of the more significant provisions of the proposed regulations. I. BACKGROUND Since 1968, the federal government, through the National Flood Insurance Program (referred to in this article as the "NFIP"), has made subsidized flood insurance available to homeowners having properties located in special flood hazard areas. However, participation in the NFIP has not been mandatory and, as a result, many flood disasters (particularly those that affected the midwest in the last few years) have been uninsured or underinsured and many homeowners in these afflicted great mortgage rates credit card offer areas were forced to seek federal loan assistance, federal aid or simply declare bankruptcy. This situation was viewed to be particularly unfortunate given the existence of the NFIP which, if available, could have alleviated or eliminated much of the costs of the recent floods. In late 1994, Congress decided to rectify the situation by passing federal legislation that would require homeowners to procure flood insurance if they obtained a loan on a home located in a special flood hazard area. While some of the law took effect in late 1994, the bulk of the law was to take effect when regulations auto loan calculator credit card offer were issued implementing the law. II. DESCRIPTION OF THE PROPOSED REGULATIONS In general, the proposed regulations would accomplish a number of things including: (1) requiring loan servicers and others to comply with the regulations at any time a loan is "made, increased, extended or renewed"; (2) clarifying how a "table funding" arrangement should be treated for compliance purposes; (3) establishing escrow requirements for flood insurance premiums; (4) requiring lenders and servicers to reevaluate existing loans and authorizing lenders and servicers to "force-place" flood insurance under certain circumstances; (5) authorizing lenders to charge fees for determining if a property is located in a us department of education loans credit card offer special flood