Mortgage Impairment

Mortgage Impairment Insurance provides coverage for lenders. The policy has 3 main features:.

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"

A properly designed Mortgage Impairment policy can help transfer loan servicing liability and meet GSE compliance.

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:

  • Flood Determination
  • Hazard and flood insurance tracking and maintenance
  • Payment and tracking of real estate taxes
  • Mortgage insurance or loan guaranty maintenance

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.

Miniter Group’s in-house underwriters are some of the best mortgage impairment insurance underwriters in the world. 

  • Our executive underwriter has been involved in mortgage impairment underwriting for over 30 years worldwide.
  • Mortgage Impairment Policies designed with the use of over 40 custom endorsements.
  • Use of adequate insurance limits based on the makeup of your portfolio.
  • Underwriting expertise to meet the liability compliance requirements of secondary market GSE’s.

We have designed customized and cost-effective mortgage impairment forms for some of the largest banks in the USA.

You need a modern approach to insurance tracking.

Learn what makes modern insurance tracking different, and how it can change loan servicing.