Compliance Alliance Question of the Week

Question:
If the bank takes a property into Other Real Estate Owned, must the bank buy/ maintain flood insurance on the property?
 
Answer:
For risk management and safety and soundness purposes, a bank with other real estate owned (OREO) in flood hazard areas should purchase flood insurance policies on its OREO property. However,  it is not required to do so by regulation.
 
Other Real Estate Owned— An institution with other real estate owned (OREO) in SFHAs should, as a
prudent practice, purchase flood insurance policies on its OREO property, although it is not required to do so by the regulations.
https://www.fdic.gov/regulations/compliance/manual/5/v-6.1.pdf
​