Loan Protector’s Mortgage Impairment Insurance provides coverage for the lender’s interest in mortgaged property in the event of uninsured or underinsured damage to the property—typically, because the borrower has failed to maintain the required property insurance and name the lender as mortgagee. In addition, coverage is also provided for liability exposures of the lender that are associated with servicing the mortgage, such as liability for mishandling of escrowed insurance premiums and causing a lapse of the borrower’s coverage, failing to pay taxes on behalf of the borrower, or failing to identify mortgaged property located in a flood zone and to require the purchase of flood insurance.
Mortgage impairment insurance is written primarily for mortgage servicers but is also purchased by mortgage originators that need to comply with Federal National Mortgage Association (FNMA) or Government National Mortgage Association (GNMA) or other lender requirements. Mortgage impairment insurance is also sometimes referred to as mortgage errors and omissions (E&O) insurance or mortgage holder’s E&O insurance.
Loan Protector’s coverage also provides coverage for the lender if a borrower’s property suffers a loss that was not insured due to the borrower’s failure to maintain voluntary homeowner’s insurance. Coverage is provided even if the lender has failed to identify the exposure and force place coverage on the property.
Coverage can be customized to the lender’s specific needs via coverage endorsements to the policy. Coverage endorsements include:
- Failure to obtain or maintain required property insurance, including flood insurance
- Failure to obtain and monitor flood zone determinations
- Failure to secure FHA/VA/PMI guarantees
- Failure to obtain or maintain life or disability insurance on the borrower (mortgagor)
- Failure to pay real estate taxes or special assessments
Benefits & Considerations
- Can be integrated and combined with our apps: EasyPlace℠, EasyNOR℠, EasyData℠ & EasyTrack℠ ; and our lender-placed hazard, REO hazard & REO liability coverage for a complete risk mitigation program
- Instant binding authority up to master policy coverage limits
- Coverage provided by numerous carriers rated “A” excellent or better by A.M. Best
- Programs are fully compliant with FNMA, CFPB, NFIP and all other regulatory agencies