Blanket Insurance – Blanket Hazard and Lenders’ Single Interest

Blanket Insurance is available for real estate (hazard insurance) and movable (collateral protection) portfolios, and protects the lender’s interest in the event a loss occurs and the borrower’s coverage was not in force. Instead of tracking the insurance and corresponding with borrowers regarding their insurance, the lender can purchase coverage on its entire portfolio. This coverage can reduce the cost and potential errors involved in insurance tracking, letter sending and coverage placement.

Coverage is available for residential and commercial real properties as well as movables such as cars, trucks and boats. Auto portfolios can also be covered for confiscation, conversion, skips and losses due to unintentional non-filing of instruments.

Mortgage Impairment

Every mortgage lender should have a Mortgage Impairment (MI) policy to provide coverage against errors and omissions made while servicing mortgage loans, resulting in financial loss to the lender. Common examples of errors include failing to place hazard or flood insurance, failing to pay real estate taxes on behalf of a borrower, failure to determine if a property is in a flood zone, or failure to meet your GSE’s requirements. Coverage can also be provided for perils not required to be covered by the borrower.

Lenders can tailor MI to elect whether or not to track property insurance on its mortgages. If the lender does not track coverage, the MI has some of the features of a single-interest blanket hazard policy.

Mortgage Impairment is a complicated product. Contact us today and one of our team members can walk you through a simplified explanation.