Home Equity Lines and Second Mortgages typically represent a significant portion of a lender’s asset base. These loans can be part of the consumer loan portfolio or part of the residential 1-4 portfolio. The risk profile of this class of loan is moderate severity with extremely low frequency. The low frequency gives the lender the option to track and force-place or apply a blanket approach to transferring the collateral risk.
Miniter Group prefers lenders to blanket this class of loans due to the low cost of blanket insurance. In most cases, the lender will pay an annual blanket insurance premium for the portfolio that is less than the cost to track the portfolio. Blanket insurance provides coverage for any uninured loan in the portfolio which eliminates the need to force place insurance.