Is a lending institution required to use a third-party provider, such as First American Flood Data Services, for its flood zone determinations?
Lending institutions may make their own flood zone determinations; however, most choose to use a third-party provider because of the resources and expertise required to make the determinations and the guarantees provided by these companies. For a lender to use a flood zone determination made by a third-party provider, the determination must be guaranteed according to the regulations. Lenders should ensure that the company is following FEMA guidelines with respect to its flood zone determinations.
Related Questions
- Is a lending institution required to use a third-party provider, such as First American Flood Data Services, for its flood zone determinations?
- Can a lending institution use a flood zone determination that was completed for a previous transaction?
- When is a lending institution required to make or obtain a flood zone determination?
