On March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law. As a result, the July 6, 2014 deadline for mandatory escrow of flood insurance payments required by the Biggert-Waters Flood Insurance Reform Act of 2012 was delayed until January 1, 2016, as set forth in 42 USC 4033 § 25(b)(1)(A):
“42 USC 4033. SEC. 25. (b) APPLICABILITY.—(1) IN GENERAL.—
(A) REQUIRED APPLICATION.—The amendments to section 102(d)(1) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(d)(1)) made by section 100209(a) of the Biggert-Waters Flood Insurance Reform Act of 2012 (Public Law 112–141; 126 Stat. 920) and by subsection (a) of this section shall apply to any loan that is originated, refinanced, increased, extended, or renewed on or after January 1, 2016.”
The new January 1, 2016 deadline also supersedes the text of Proposed Rule 78 FR 65107 from October 2013. The Proposed Rule was submitted by the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), Farm Credit Administration (FCA), and National Credit Union Administration (NCUA) to clarify flood insurance agency regulations in relation to Biggert-Waters. A Final Rule has not been issued as of yet.
Once a Final Rule has been issued and becomes effective, DocuTech will add a warning to ConformX to alert users when a loan is submitted that does not meet the mandatory flood insurance escrow requirement.
Copies of referenced documents can be found by clicking on the links below:
Homeowner Flood Insurance Affordability Act of 2014
78 FR 65107 – Loans in Areas Having Special Flood Hazards
Biggert-Waters Flood Insurance Reform Act of 2012
July 16, 2014