Flood Insurance – Lender Placed

Arcana will provide the monitoring and placement of flood coverage, but will not be the underwriter. The Flood Insurance Act of 1994 states" a loan cannot be made on a property or a mobile home located in a Special flood Hazard Area (SFHA) unless it is covered for the term of the loan by flood insurance and insurance coverage must be at least equal to the outstanding principal balance or the maximum limit of the National Flood Insurance Program (NFIP) policies, whichever is less."

Arcana's servicing system interfaces with various flood zone determination companies, along with the Lender's loan servicing platform to identify new and updated flood insurance exposures. When determined that a loan in a SFHA does not have flood insurance or is inadequate, Arcana will notify the borrower through the NFIP defined requirements. If the borrower fails to purchase flood insurance within 45 days from the first notification, the Lender is required to purchase flood insurance on behalf of the borrower.

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