During 2019 several insurance tracking vendors have canceled their relationships with numerous lenders throughout the country. Unfortunately, these vendors in many cases did not give adequate notice or time for the lenders to react and find an alternative. If you have already been forced to make a quick decision or are facing that decision, this blog post covers some options for you.
Many lenders are finding out about an increasingly popular Blanket Coverage option for lenders that eliminates your responsibility to track hazard and other forms of collateral insurance. More and more lenders are buying Blanket Coverage on as many parts of their loan portfolio as they can. That makes tracking the remaining loans in-house much easier to manage, read on to find out more about the best way to handle those remaining loans that need to be tracked.
Blanket protection is available on all loan portfolios including titled collateral (Blanket VSI), commercial real estate, home equity, and second mortgage loans, as well as traditional first mortgages (Blanket Mortgage) and commercial equipment and AG loans (Blanket Equipment). Lenders that blanket their portfolios typically only have a small percentage of their loans left to be tracked which would include a few larger real estate loans, loans with property in flood zones, and escrowed loans.
So what is the best way to handle those remaining loans? Some blanket insurance providers like Golden Eagle may also give you access to their tracking software to make tracking the remaining loans in-house much simpler. These software products will produce notification letters to your borrowers and automatically place coverage on the collateral when no proof of insurance is received. These systems are typically far better at tracking insurance than your typical loan servicing platform. Ask your vendor if they will give you access to this tracking platform for all of your loans if you want to track in-house more efficiently.
You may be interested in this article: Could Your Collateral Protection Insurance or CPI Program Bring You Legal and Compliance Troubles?
Now let’s look at some of the features our customers appreciate most about blanket protections.
- Blanket coverage eliminates renewal/cancellation insurance tracking after insurance has been verified at closing
- Eliminates the risk of false force-placement premiums on covered loans and unnecessary debits and credits
- Reduces negative borrower contacts with dual-interest coverage taking the place of force-placed notifications
- Properties are covered through the foreclosure process
- The blanket coverage option saves staff time and frees them up to focus on more important things
Read our blog post: How Lenders are more Efficient with Blanket 360 Portfolio Insurance.
If you were forced to make a quick decision on insurance tracking and moved swiftly to another outsourced tracking vendor make some time when the dust settles to see if there is another option or vendor that could be a better fit. Perhaps it’s time to take a strong look at Blanket protections which eliminate all of the headaches that are normally part of keeping track of insurance on your loan collateral.
Check out this article on The Impact of Longer-term Auto Loans on Lenders