September 17th, 2022
When it comes to risk managing real estate portfolios, there are many insurance programs available to lenders with a broad spectrum of coverage, limits, and cost.
Understanding that every institution is different, we consult and customize coverage for our clients based on their portfolio composition, lending goals, and appetite for risk.
The below schematic and narrative outlines the 3-level approach we take to building the most comprehensive collateral protection model available to lenders.
Both the Home Equity, Second Mortgages and Non-Real Estate C & I loans (Optional) are covered by a blanket hazard. This eliminates the nuisance of tracking the C & I portfolio and minimizes the cost of protecting the equity portfolio. For significant condo portfolios, blanket coverage is also available. Loans above the blanket limit will be tracked. Hazard, Liability, and Flood Coverage for REO exposure is available through our proprietary website, mortgagehazard.com. This is a simple and effective way to protect high risk and REO loans.
All Residential, Commercial, and related Commercial Contents will be actively tracked for coverage. This includes loans listed above that are in excess of the blanket limits. All loans are covered by an Automatic Coverage Endorsement that provides coverage for all loans in portfolio that are being tracked. Policies and procedures are developed that ensure regulatory compliance. Collateral risk is fully addressed as well as procedural and compliance.
A wrap-around Mortgage Impairment Policy issued on a checking basis with enhanced limits for Coverage C (Balance of Perils) will provide the final level of coverage. This policy provides flood coverage for properties NOT in a flood zone as well as other coverages not contained in a typical hazard. In addition, third party liability and secondary market exposures are included.
If you are interested in learning more about our collateral protection approach to real estate, please contact one of our sales professionals in your location: Contact us!