Mortgage Impairment Insurance protects a lender’s interest in property by offering broad coverage for unknown or unexpected losses occurring from the day-to-day origination and servicing of mortgage loans – including physical damage and errors and omissions.
How Mortgage Impairment Insurance benefits a financial institution:
|§ Insures the lender if property suffers a loss due to physical damage – when the borrower failed to maintain insurance for required perils (i.e. fire, flood…).
§ Endorsements are available to create “All Risk” physical damage protection including perils for which the borrower is not required to insure.
§ Errors and Omissions coverage:
a. Liability in handling borrower’s insurance.
b. Real Estate Tax Liability
c. Processing mortgage life and disability insurance
d. Failure to determine property is located in a flood zone
e. Title Errors & Omissions
f. Loss of secondary market guarantees (FNMA, GNMA…)
g. Loss of VA, FHA, SBA, PMI coverage
Mortgage Impairment can be bundled with lender-placed hazard and flood insurance to create a comprehensive mortgage protection program.