Impairment Layer
This is the layer of insurance that responds if the lender is financially impaired.
By definition, lender impairment can only be calculated after property is foreclosed and sold,
or when legal liability is proven against the lender. Mortage impairment policies are designed to
protect the lender from physical damage losses as well as losses due to errors & omissions in
servicing a mortgage.
The following is a list of Error & Omission coverages
90 Day Direct Physical Loss Coverage
Direct Physical Loss or Damage from ‘Required Perils’
Liability of Assured in Procuring or Maintaining Borrowers Insurance Policies
Liability of Assured in Handling of Mortgagors Real Estate Taxes.
Liability of Assured in Determining if a Property is in a Flood Zone.
Direct Physical Loss or Damage from Balance of Perils
Direct Physical Loss or Damage to Assured’s Buildings and Contents Excluding Fire, Extended Coverage and Perils as Provided Under Other Physical Damage Policies
Extra Expense – Following Direct Physical Damage to or Destruction of Assured’s Buildings or Contents
Loss of Veterans Administration, Federal Housing Administration, Fannie Mae, Freddie Mac, Ginnie Mae, Small Business Administration and Private Mortgage Guarantee Coverage
Scope of Coverage Applying to Mortgage Servicing Agreements
