Gateway Mortgage Group Correspondents – please note effective for loans closed on or after January 1, 2016, GMG will require flood insurance premiums to be escrowed, in compliance with the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters).
Escrows for flood insurance will not be required for loans secured by property that is part of a condominium, cooperative, or other project development, if the property is covered by flood insurance provided by and paid for, as a common expense, by the condominium association, cooperative, homeowners association, or other applicable group.
Correspondents should provide evidence that any flood insurance premiums associated with mortgage transactions are escrowed prior to purchase, regardless of whether any other funds associated with the loan are escrowed (i.e., taxes, homeowners insurance premiums, or any other fees or charges).
Loans with a closing date on or after January 1, 2016 where flood insurance is required and no flood escrow has been established will not be eligible for purchase.
If you have any questions regarding any information in this announcement, please feel free to contact your Regional Sales Manager.