Mortgage Impairment Insurance coverage is required for all lenders that originate or service mortgages for Fannie Mae, Freddie Mac, Ginnie Mae, or the Federal Home Loan Banks. These Government Sponsored Enterprises (GSEs) have very specific requirements for MI and Mortgage E&O coverage.
Miniter Group underwriters design compliant Mortgage Impairment policies for some of the largest lenders in the USA. Our Mortgage Impairment experts are available to provide a compliance review of your MI program.
Property Insurance – This coverage requires default by the borrower and includes a wide range of perils (ie: earthquake). A lapse in the borrower’s insurance will trigger 90 days of coverage to allow lenders to re-establish primary layer insurance. Borrower insurance and force-placed insurance are examples of primary layer insurance.
Liability Insurance – Loss exposures that are associated with servicing the mortgage. This coverage acts as E&O insurance for the loan servicing department.
GSE Compliance – A properly underwritten mortgage impairment policy will utilize the liability insurance described above to meet GSE compliance requirements in the secondary market. This coverage is loosely named mortgage holders E&O insurance.
To learn more about mortgage impairment insurance, please read "Miniter Group's Complete Guide to Mortgage Impairment Insurance"
GSE compliance requirements are complex and require expertise to navigate the gray areas associated with liability for the lender.
E&O Policy Requirements – protect both the servicer and the seller against claims of negligence for these servicing activities:
Policy Limits & Deductibles - E&O policy limits between ten and thirty million dollars are required based on aggregate coverage or on a per loan basis. Maximum deductibles from ten to fifteen percent of these limits are required based on the size of the portfolio.
We have designed customized and cost-effective mortgage impairment forms for some of the largest banks in the USA.
Learn what makes modern insurance tracking different, and how it can change loan servicing.