All participants in the housing industry are grappling with the effects of COVID-19, from borrowers to originators to servicers. The emergency has influenced all facets of the mortgage origination and servicing business, prompting additional restrictions in some instances while triggering flexibilities and relaxed requirements in others. Flood insurance requirements, which are usually strict and inflexible, have not been immune.
On March 28, 2020, the Assistant Administrator for the Federal Insurance and Mitigation Administration of the Federal Emergency Management Agency (“FEMA”) released a memorandum notifying National Flood Insurance Program (“NFIP”) insurers of an extension of the NFIP premium payment grace period. Under normal circumstances, an insurer must receive the payment to renew an NFIP policy within 30 days of expiration. However, recognizing the difficulties experienced by many policyholders (including loss of income and potential disruptions in employment), the administrator has extended the 30-day grace period to 120 days for all policies with expiration dates between February 13, 2020 and June 15, 2020.
Continue Reading Flood Insurance Policy Renewal Grace Period Extended by FEMA, and One Regulator Applies this Grace Period to Force Placement Notices