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Mortgage Impairment
Errors & Omissions Insurance
The Mortgage Impairment program provides a safety net for unknown or unexpected losses, which includes protection from errors and omissions that can occur in the day-to-day origination and servicing of loans. Coverage includes physical damage, as well as errors and omissions. Bundle Mortgage Impairment errors and omissions with Mortgage Guard® for a complete risk management insurance solution.
Overview
- Provides compliance required by guarantee organizations including Fannie Mae, Freddie Mac, and Ginnie Mae organizations
- Protects Lender Interest in Property
- Offers the broadest coverages available in the market
Physical Damage
- Insures the lender if property suffers a loss from perils that are required of the borrower, including flood insurance
- Insures the lender if property suffers a loss from perils not required of the borrower
- Broader coverage is available and includes: all risk, earthquake, and perils not required of the borrower
- Optional endorsements can be added including:
• Equity Endorsement to remove the tracking requirement on seconds and equity loans
• Extended coverage for loss of a property due to tax sale
Streamline Administration and Cost Effective Solutions
Errors and Omissions
- Liability in handling borrower’s insurance.
- Real estate tax liability.
- Processing of life and disability coverage.
- Failure to determine property is located in a flood zone.
- Loss of secondary market guarantees.
- Title errors and omissions.
- Loss of VA, FHA, SBA, PMI coverage.
Streamline Administration
- Borrower’s insurance is verified initially and annually thereafter.
- Borrower’s hazard insurance is verified at closing only with follow-up on non-renewals and cancellations.
- Blanket Coverage: Borrower’s insurance is verified at loan closing, with no required follow-up.
Cost Effective Solutions
- Policy term: 1 or 3 years – Significant discounts for 3-year policies.
- Premium based on portfolio when policy is bound – does not increase during the policy term, even if the portfolio grows.
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