PBIS Insures Fraud Risk.(PBIS Insurance Services signs deal with GreenPoint Mortgage Funding )

Water, wind and fire are not the only hazards a lender needs to worry about these days. Now, fraud has been added to the perils that some lenders are insuring against.

PBIS Insurance Services, an affiliate of the Prieston Group, has entered into an agreement with GreenPoint Mortgage Funding to cover Alt-A credit quality loans purchased through GreenPoint's correspondent lending channel against breaches of representations and warranties related to fraud.

GreenPoint, the 15th largest residential mortgage lender in the country, is providing the PointGuard service at no cost to its correspondents.

With this automatic coverage in place, GreenPoint's correspondents will benefit from a significantly reduced risk of loan repurchases. GreenPoint also benefits by providing a unique benefit to its correspondents, as well as through enhanced risk management.

"PBIS Insurance created this unique insurance product for correspondent lenders," said Arthur Prieston, president of the firm. "As one of the more innovative and forward- looking companies in the mortgage business, GreenPoint is the first investor to understand the potential of this type of universal protection for its correspondents and to proactively offer it on a widespread basis."

Insuring against fraud minimizes the changes that a lender will be forced to repurchase loans under recourse arrangements.

PBIS Insurance is the exclusive managing agent for the repurchase insurance, which is underwritten by SAFECO, an A- plus rated insurer with assets of over $30 billion. To date, more than $200 billion of loans have been insured through the lender's ...