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					Insurance

EverHome Mortgage Company
Customer Service Training

3/17/2009

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Why Insurance?

During the origination of the loan, the borrower is required to obtain hazard insurance coverage as protection to the lender in case of damages to the property.

Hazard Insurance must be purchased on escrowed and non-escrowed loans.

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Why Insurance?

If escrowed, we receive the customer’s insurance bill and pay it out of their escrow account.
The lender must monitor the account to ensure there has been no lapse in coverage.

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Insurance Types
Homeowners/Fire 351
• Covers the property against damage to the property and personal contents. Fire insurance does not included personal content.

Flood 352

• Covers damage from rising water not covered in other policies.

Earthquake 354

• Covers damage from earthquakes only

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Insurance Types

• Covers the property against damage from Windstorm winds (hurricanes). Sometimes this is 355 covered in other policies.
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Flood Insurance

Flood zones are usually areas that are: •Located near river flows •Areas where storm tides are possible •High rain fall averages that may cause flooding Flood zones are determined based on flood maps of the area. If a property is located in a mandatory flood zone, flood insurance coverage will be likely.

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Flood Insurance
Flood insurance is typically required when the property is located in a mandatory flood area. The requirement of flood insurance might be waived when improvement on the property in a mandatory flood zone are located on an elevation site. In this case, FEMA grants a Letter of Map Amendment (LOMA) and the borrower may be permitted to drop flood coverage.

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Earthquake Insurance

Currently, there is no national program covering other natural disasters such as earthquakes. Some states have taken steps to address these risks. California requires insurance companies doing business in the state, to offer earthquake coverage for an additional premium.

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High Risk

Lenders with properties located in high risk areas, need to be aware of the potential for loss and ensure that proper coverage is in place.

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Lender Placed Insurance

This provides insurance coverage from lenders if the homeowner does not have insurance.
We provide the same amount of coverage. If this is unknown we provide coverage equal to the principal balance.
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Lender Placed Insurance

Usually very expensive. Can be up to three times more than regular insurance rates.
To remove lender placed insurance, the borrower must provide sufficient evidence of coverage, which may be mailed or faxed to our Insurance Dept.

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Lender Placed Carriers

• Homeowners/Fire •Assurant Insurance •Flood •Wilshire National

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Condos

•Covered by a blanket policy, which is obtained by the customer’s homeowner association and covers the entire complex.

•Customers pay premium to the association, which is why condos are non- escrowed.
•We do not track these policies.
13

Mortgagee Clause
Must be attached to an insurance policy.

This clause names the lender as the Loss Payee and in the event of damage to the property, insurance checks will be issued jointly.
Stipulates that the lender will receive insurance proceeds sufficient to satisfy the unpaid amount of a loan in the event of loss.

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Mortgagee Clause
Will list the name of the lending company followed by the phrase, “Its successors and/or Assigns as their interest may appear”. Will list the mailing address where insurance documents should be sent. Provides for a 10 day notice in the event of cancellation of the policy.

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Mortgagee Clause

EverHome Mortgage Company Its Successors and/or Assigns Post Office Box 2139 Jacksonville, FL 32232

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Insurance Type Codes

•H=Homeowners •F= Fire •X=Flood •S=Windstorm •Q=Earthquake •V=Vacant •T=Trailer •C=Condo •M=Mobile Home
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Insurance Payment Codes

1&2 3 4&5 6 7&8

Three Year Policy paid Annually Policy paid to Agent Three Year Flood Policy Policy paid to Insurance Company Non Escrow

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Insurance Cancellation Codes
NR- Non Renewal This notice is stating that the insurance company will not be renewing the coverage. UR- Underwriting This notice is letting us know that for some reason the insurance company has decided to cancel the customer’s insurance coverage.

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Insurance Cancellation Codes
IR-Insured Request This notice is stating that the insured has requested the insurance coverage be cancelled. *?-Reason Not Specified This notice is stating that a cancellation request for insurance coverage was received but failed to identify a specific reasons. NP-Non-Payment This notice is stating that a cancellation request for insurance coverage was received for nonpayment and that we have processed a payment.

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Insurance Screens
HAZ1- provides insurance information such as policy period, policy number, name and address of insurance carrier, disbursements or refunds. HAZM-provides dates of any changes or maintenances on the system. HAZA-use this screen to view information on all hazard policies for specific loan. HAZN-notes from the Insurance Department. SER1/HHAZ-review all hazard disbursements made by EverHome Mortgage.
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Loss Draft
• If the customer experience damage to their property and the home is in need of repair, the customer should contact their insurance company to have a claim filed for damages.

•

Once the claim is processed, the insurance carrier will issue a check to the borrower in their names as well as EverHome.

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Loss Draft
• After the damage has occurred to a property, the following steps are generally taken. • Borrower files a claim with insurance agent. • Insurance company sends an adjuster to the property to inspect the damages. • The insurance company issues a loss draft (check) payable jointly to the mortgagor and lender. • Property and repairs are inspected by lender.

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Loss Draft under $10K
• The borrower must send the unendorsed check with the loan number referenced on it to: EverHome Mortgage Company PO Box 2139 Jacksonville, FL 32232

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Loss Draft under $10K
• Explain that we will endorse and return the check along with an Owner’s affidavit for them to sign within 2-4 business days. If the mortgagor would like us to overnight the check back to him, he must enclose a prepaid return envelope. The borrower must allow 7 to 10 days for mailing.
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Loss Draft over $10K
• Advise the caller to send the endorsed check with the loan number and a copy of the adjuster’s report or estimate to: EverHome Mortgage PO Box 2139 Jacksonville FL 32232

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Loss Draft over $10K
• The draws are released in one-third increments, made payable to the borrower and to the borrower’s contractor. If the borrower is not using a contractor, but sub contracting out themselves, then the draws will be issued to the borrower only. We will release one-third upfront, the second after a partial inspection (50% complete), the third after the final inspection is complete.
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•

Loss Draft over $10K

• We will release the final draw if the repairs are not 100% complete, but at least 90%, if: 1. There is a significant hold back by the insurance company or 2. The remaining repairs listed as incomplete on the inspection report are minor touch ups.

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Loss Draft over $10K

• The system will be noted when the draft is received in our office. If a note has not been logged on the system, the draft has not been received or is currently being processed. (HAZN, TSK1, PL05) • If the loan was service released and the mortgagor receives a loss draft check from their insurance company and we are still identified as the mortgagee, we will endorse the check over to the new lender and send to them for processing. We are unable to endorse the check and send back to the mortgagor.
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