Notice of Special Flood Hazards

§ 760.10

12 CFR Ch. VII (1–1–13 Edition)

providing written notice to the borrower containing the language presented in the appendix to this part
within a reasonable time before the
completion of the transaction. The notice presented in the appendix to this
part satisfies the borrower notice requirements of the Act.
§ 760.10 Notice of servicer’s identity.
(a) Notice requirement. When a credit
union makes, increases, extends, renews, sells, or transfers a loan secured
by a building or mobile home located
or to be located in a special flood hazard area, the credit union shall notify
the Director of FEMA (or the Director’s designee) in writing of the identity of the servicer of the loan. The Director of FEMA has designated the insurance provider to receive the credit
union’s notice of the servicer’s identity. This notice may be provided electronically if electronic transmission is
satisfactory to the Director of FEMA’s
designee.
(b) Transfer of servicing rights. The
credit union shall notify the Director
of FEMA (or the Director’s designee) of
any change in the servicer of a loan described in paragraph (a) of this section
within 60 days after the effective date
of the change. This notice may be provided electronically if electronic transmission is satisfactory to the Director
of FEMA’s designee. Upon any change
in the servicing of a loan described in
paragraph (a) of this section, the duty
to provide notice under this paragraph
(b) shall transfer to the transferee
servicer.
APPENDIX TO PART 760—SAMPLE FORM
OF NOTICE OF SPECIAL FLOOD HAZARDS AND AVAILABILITY OF FEDERAL
DISASTER RELIEF ASSISTANCE
We are giving you this notice to inform
you that:
The building or mobile home securing the
loan for which you have applied is or will be
located in an area with special flood hazards.
The area has been identified by the Director of the Federal Emergency Management
Agency (FEMA) as a special flood hazard
area using FEMA’s Flood Insurance Rate Map
or the Flood Hazard Boundary Map for the
following community: lllllll. This
area has at least a one percent (1%) chance
of a flood equal to or exceeding the base
flood elevation (a 100-year flood) in any

given year. During the life of a 30-year mortgage loan, the risk of a 100-year flood in a
special flood hazard area is 26 percent (26%).
Federal law allows a lender and borrower
jointly to request the Director of FEMA to
review the determination of whether the
property securing the loan is located in a
special flood hazard area. If you would like
to make such a request, please contact us for
further information.
lll The community in which the property securing the loan is located participates
in the National Flood Insurance Program
(NFIP). Federal law will not allow us to
make you the loan that you have applied for
if you do not purchase flood insurance. The
flood insurance must be maintained for the
life of the loan. If you fail to purchase or
renew flood insurance on the property, Federal law authorizes and requires us to purchase the flood insurance for you at your expense.
• Flood insurance coverage under the NFIP
may be purchased through an insurance
agent who will obtain the policy either directly through the NFIP or through an insurance company that participates in the
NFIP. Flood insurance also may be available
from private insurers that do not participate
in the NFIP.
• At a minimum, flood insurance purchased must cover the lesser of:
(1) the outstanding principal balance of the
loan; or
(2) the maximum amount of coverage allowed for the type of property under the
NFIP.
Flood insurance coverage under the NFIP
is limited to the overall value of the property securing the loan minus the value of the
land on which the property is located.
• Federal disaster relief assistance (usually in the form of a low-interest loan) may
be available for damages incurred in excess
of your flood insurance if your community’s
participation in the NFIP is in accordance
with NFIP requirements.
lll Flood insurance coverage under the
NFIP is not available for the property securing the loan because the community in
which the property is located does not participate in the NFIP. In addition, if the nonparticipating community has been identified
for at least one year as containing a special
flood hazard area, properties located in the
community will not be eligible for Federal
disaster relief assistance in the event of a
Federally-declared flood disaster.

PART 761—REGISTRATION OF RESIDENTIAL
MORTGAGE
LOAN
ORIGINATORS
Sec.
761.101
761.102

Authority, purpose, and scope.
Definitions.

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