12. What if the borrower or other party disagrees with the results of a flood zone determination?
It is not uncommon for other parties, such as borrowers, surveyors, community officials, realtors, insurance agents, builders, or appraisers to have differing opinions about a property's flood zone designation. This can occur for a variety of reasons: (1) Reliance on information other than the Flood Insurance Rate Map, (2) Historical information that differs from the flood map, (3) Updated information not reflected on the flood map, (4) Different interpretations of the flood map, or (5) A resistance to paying for the required flood insurance.

When a dispute over a flood zone determination occurs, a discussion of the methodology used and a review of the flood map can often resolve the situation. A CoreLogic representative can assist with this review, and in most situations, is able to resolve the dispute. If, after the review, the borrower still believes that the flood map has not been interpreted correctly, then the borrower, jointly with the lender, can request a Letter of Determination Review through FEMA.

13. What is the Letter of Determination Review process and what is required of the lender and borrower?
The Letter of Determination Review is a process through which FEMA will determine if the Standard Flood Hazard Determination Form (SFHDF) that includes the flood zone determination used by the lender is accurate. For example, if a lender is requiring flood insurance based upon a flood zone determination that states that the subject property is in the Special Flood Hazard Area (SFHA,) then FEMA will confirm whether or not the property is indeed in the SFHA based upon the Flood Insurance Rate Map (FIRM.)

FEMA requires the following items for this process: (1) A letter signed by both the borrower and lender requesting the review, (2) A copy of the lender's SFHDF, (3) A copy of the dated Notice to Borrower document, (4) A copy of the applicable FIRM, (5) All documents used by the lender to complete the flood zone determination, and (6) A check or money order in the amount of $80.00 made payable to the NFIP. This request must be submitted within 45 days of the Notice to Borrower document.

14. How could another flood zone determination company, using the same flood map, reach a different conclusion about the flood zone?
Differing interpretations of the flood map may occur from time-to-time, especially in areas where the flood map does not include details or for properties near the edge of the Special Flood Hazard Area. The specific location of the building is fundamental to the flood zone determination; thus, a few feet difference in a building's location can result in a different conclusion on the Standard Flood Hazard Determination Form.

When a discrepancy in flood zone determinations occurs between flood determination providers, the lending institution can request that the companies review their work, which hopefully leads to a consensus. In some cases, the vendors may be able to provide a flood map exhibit showing how they reached their conclusion. If the matter cannot be resolved, then the borrower and lender may elect to pursue a Letter of Determination Review, if appropriate.

15. If a portion of the land is in the Special Flood Hazard Area, but the building itself is not, what will the flood zone determination state and is flood insurance required?
The Standard Flood Hazard Determination Form asks the following question: "Is the Building/Mobile Home in Special Flood Hazard Area (Zones containing the letters ‘A' or ‘V')? " Thus, the mandatory purchase of flood insurance requirement is tied to the location of the improvements (building/mobile home) on the property and not the land itself. If no portion of the building itself (including decks and screened porches) is located within the Special Flood Hazard Area on the flood map, then the federal flood insurance requirement does not apply.

16. What is the Notice of Special Flood Hazards and Availability of Federal Disaster Relief Assistance form (or Borrower Notification Letter) and when is it to be used? Is a Lending Institution required to use the sample form of this Notice found in the regulations?
When a lending institution makes, increases, renews, or extends a loan, and it is determined that the building securing the loan is located or to be located in the Special Flood Hazard Area (SFHA), then within a reasonable period of time before the loan closing, the lender is to provide a written notice to the borrower informing him or her of the special flood hazards. The written notice must contain the following: (1) A warning that the building is within an SFHA, (2) A description of the mandatory purchase of flood insurance requirements, (3) A statement as to whether flood insurance may be purchased through the NFIP or through a private insurer, and (4) A statement as to whether federal disaster relief is available in the community, as well as other relevant flood insurance information.

The regulations require that lenders be able to retrieve documentation evidencing the borrower's receipt of the Notice. Lenders may use the sample form of the Notice and are considered to be in compliance if they do; however, although the regulations do not require the use of the sample form, lenders must ensure that the version they use contains the fourfold regulatory requirement listed above.


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