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A Reminder About Hazard Insurance Claims.
Mr. Reitz is the director of insurance for GMAC-RFC and is responsible for pursuing claims on damaged properties. Mr. Reitz is a member of the board of directors for the National Association of Public Insurance Adjusters as well as the president of the California Association of Public Insurance Adjusters.
Servicers of mortgage loans have many responsibilities to the mortgage holder or investor. A couple of these responsibilities, while important, may sometimes be overlooked by servicers. Those responsibilities are the ones that require them to ensure that the investor's collateral is adequately insured and that the investor's rights to collect upon the insurance policy are protected.
Servicers may not know everything they need to know to meet these responsibilities, and so they may need special training or other outside assistance in learning about these areas. This article will help provide mortgage loan servicers with some guidance in this area.
Servicer's Responsibilities to Maintain the Investor's Rights
Servicers may not realize that the mortgagee is actually a party to the contract of insurance insuring the mortgaged property. As a party, the mortgagee is required to perform specific duties under the terms of the policy. In most cases, the servicer performs those duties and meets those obligations for the mortgagee or investor. But what duties and requirements does a mortgagee have under the terms of the policy?
There is no simple answer since there are thousands of different insurance policies, and each one may have slight variations to its terms and obligations. The only way for the mortgagee to know exactly what its duties are is for it to read each individual policy. Unfortunately, it is not practical to expect that a mortgagee will have a copy of each insurance policy on file for each property in their inventory. So, what should a mortgagee or servicer do? Fortunately, many policies contain certain similar terms and requirements.
Generally, the Standard Form Homeowners Policy (known in the industry at an ISO HO 00 03 Special Form) requires the mortgagee to do the following:
- Mortgagee clause claims in the subprime fallout.
- Magazine article from: Defense Counsel Journal Gerber, Daniel W. O'Neal, Nikia A. July 1, 2008 700+ words
...is intended to protect a mortgagee from an insurer's indiscriminate avoidance...of insurance between the insurer and the mortgagee. (6) The notion that...separate contract between the insurer and the mortgagee means that the mortgagee...
- Mortgagee Protection. (Products & Services).
- Magazine article from: Risk & Insurance December 1, 2002 700+ words
Zurich North America Financial Enterprises is offering Mortgagee Protection Policy. The updated product was developed to provide...insurance mortgaged property is noncollectible, or if the insurer is insolvent; cover mortgages even if the original hazard...
- Enhanced mortgagee protection. (Coverage).(Zurich North America Financial...
- Magazine article from: Risk Management August 1, 2002 700+ words
...America Financial Enterprises, based in Baltimore. The enhanced Mortgagee Protection Policy (MPP) provides protection for an entire...collateral when primary insurance is noncollectible or if the insurer becomes insolvent. MPP offers coverage for legal liability...
- Mortgagees: New Duties And Obligations.
- News wire article from: Mondaq Business Briefing McMahon, Peter September 25, 2009 700+ words
...change in practice by mortgagees. These changes relate...and exercise of the mortgagee's power of sale. These changes relating to mortgagees will commence on a...common law concerning a mortgagee's duty when exercising...enshrined in legislation. Mortgagees should ensure they...
- Mortgagee sales hit fresh high
- Newspaper article from: Sunday Star-Times PAGE Emma August 30, 2009 700+ words
...homeowners are losing their houses as mortgagee sales hit a record high. And although...traditionally been at the front of the mortgagee sale wave, figures released exclusively...company Terralink show there were 289 mortgagee sales in June - the highest monthly total...
- Reasonable Steps? A New Statutory Obligation On Mortgagees To Identify...
- News wire article from: Mondaq Business Briefing Flannery, Angela July 2, 2009 700+ words
...with the requirements but the mortgagee had actual or constructive...same way that it applies to a mortgagee. In addition, mortgagees would also be prevented from...Assurance Fund where loss to a mortgagee arises from a failure to comply...
- Sale Of Mortgaged Land Ordered By The NSW Supreme Court On The Application Of A...
- News wire article from: Mondaq Business Briefing Khouri, Susanna May 21, 2007 700+ words
...accepted rule that mortgagees have a discretion as to when to effect a mortgagee sale. Facts: A developer...the second and third mortgagees to the sale on the...land and that on a mortgagee sale it was anticipated...the land. The second mortgagees had concerns about...
- Mortgagees Need To Beware Of Guarantors.
- News wire article from: Mondaq Business Briefing Bretherton, Andrew November 12, 2009 700+ words
...compensation from the first mortgagee and in so doing placed...the second and third mortgagees. The Facts B &...of the decision: mortgagees holding surplus funds...to the next ranking mortgagee; mortgagees need to consider widening...
Source: HighBeam Research, A Reminder About Hazard Insurance Claims.