B&C Servicers Learning to Manage Mortgage Insurance Coverage.

As mortgage insurance coverage expands in the subprime sector, the

servicers managing these loans find they have to learn to handle claims and processing for covered loans.

Murrayhill, a company that provides mortgage risk credit management services for issuers and dealers in the mortgage-backed securities sector, is helping the industry meet this challenge.

Sometimes, issuers will place lender-paid mortgage insurance on loans in a transaction and then select a servicer that may be unaware of the coverage or unfamiliar with it, especially in the subprime sector, where MI coverage was rare until recent years.

Murrayhill's proprietary risk-filtering technology helps it track MI policies on behalf of investors, so that when a loan goes bad they can make sure that a claim is filed and then monitor payment of the claim.

Murrayhill started monitoring its first subprime deal with mortgage insurance in March of 2000 and now has been monitoring quite a few subprime and prime transactions with mortgage insurance coverage.

While initially most subprime servicers were not up to speed on managing mortgage insurance claims, most big servicers now have MI departments in place, according to Murrayhill. But there are still some servicers that haven't had much exposure to mortgage insurance. "In that case, we are there to kind of help guide that servicer through developing that process," said David McDonnell, director of consulting at Murrayhill.