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.