Process Introduction: Loan risk reduction
We work collaboratively with Lenders, Borrowers and Brokers. Initial evaluation encompasses Lender insurance requirement consultation, customized documents, procedures and workflows.
Compliance Checklists: Loan origination
Our team secures, reviews and records Borrower’s insurance documents and compares them to Lender requirements. The result: safeguarding of insurable interests, verifying compliance and ensuring smooth transfer or documentation to servicing teams.
Compliance Checklists: Loan renewal
Borrower’s endorsement and renewal insurance documents are reviewed, recorded and compared with Lender requirements, protecting ongoing insurable interests in collateral.
Ongoing Compliance: Insurance renewal monitoring
The operating tenets of a Lender’s ongoing insurable interests are monitored consistently with this intensive process. Insurance documentation, coverage and compliance are tracked for accuracies and compliance.
Systematic Examination: CIC’s audit process
Lenders’ operating policies are surveyed to determine and evaluate efficacy and best practices.
Extensive Analysis: Portfolio review
Providing short and long-term solutions, our capabilities include in-house and subcontracted resources to integrate best practices, audits, training and education.
Case Study
A Borrower’s inadequate property and casualty insurance program exposes the Lender to undetected risks.
Challenge
A retail store owner secured a $2M operating loan from a Lender. The Owner/Borrower suffered a catastrophic fire loss and was convicted of arson. The insurer denied the claim and also denied recovery for the Lender as “Loss Payee”.
Solution
This challenge is a common and unfortunate example of where CIC could have provided exceptional value. Our team would have conducted an insurance review on the Borrower’s program, and the gap in coverage would have been identified. Lesson learned: not all endorsements for “Loss Payee” are created equally; undetected endorsements can leave a Lender empty handed.
Outcome
CIC is a partner to Lenders in protecting their financial interests. Our reviews identify and secure the proper coverage for Borrower’s insurance programs, and our involvement allows Lenders’ closing teams and credit departments to focus their efforts on closing more loans, thus increasing profits.
