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Lending institutions providing consumer loans (mortgage loans, auto loans, etc.) and commercial real estate loans in specialized markets or asset classes (like habitational and senior living) often serve riskier borrowers or property types that are ineligible for traditional loans. Lenders therefore need comprehensive coverage to protect them from financial losses, mistakes in their lending activities and industry-specific events that can affect their operations. We offer insurance solutions for the following lenders and servicers:

• Residential Mortgage Servicers
• Commercial Mortgage Servicers
• Mortgage Originators
• Auto Lenders
• Banks
• Non-Banking Financial Institutions
• Asset Managers
• Whole Loan Investors

We provide insurance expertise and solutions for lending and loan portfolio exposures, including but not limited to:

• Fidelity Bond: Ensures protection from losses resulting from fraudulent employee behaviors like theft.
• Mortgage Bankers Bond: Covers a wide range of risks for mortgage bankers, brokers and lenders beyond employee dishonesty, such as fraudulent mortgage activity.
• Mortgagee E&O: Protects mortgage lenders, servicers and bankers from losses due to oversights or negligence in servicing loans.
• Lender’s Liability: Safeguards lending institutions from claims or lawsuits stemming from their lending activities, such as misstatements or neglect.
• Lender-Placed Insurance: At the direction of the lender/servicer, this ensures the asset has insurance to protect the loan balance when a borrower fails to maintain insurance on collateral, such as a home or commercial real estate asset.
• Real-Estate Owned Insurance: Protects the lender against risks associated with owning property, like vandalism.
• Mortgage Impairment: Mitigates the lender’s financial loss when uninsured or underinsured damage occurs to property.

Counterparties, such as government-sponsored enterprises (GSEs), warehouse lenders and investors, have varying degrees of insurance requirements. Our specialty lending team understands the countless intricacies and provides insurance recommendations to ensure your firm is compliant with all counterparties. To the extent where applicable, our team can negotiate waivers on onerous lender insurance requirements. This can result in reduced costs and more favorable terms and structures that better align with the client’s needs. Through leveraging our extensive relationships with insurers and industry knowledge, we advocate for lenders’ best interests so they can meet their goals and maintain financial stability.

Lender-placed insurance, also known as force-placed insurance, is a type of specialty lending insurance solution designed to protect the lender when the borrower’s existing insurance policy lapses or is deemed insufficient by the bank or mortgage servicer. This means that an asset, such as a house or vehicle, will continue to have coverage even if the borrower doesn’t maintain proper insurance. If damage or loss occurs, there will be no interruption in protection and the lender will be shielded from financial exposure, ensuring their best interests are safeguarded.

Lender-placed insurance is heavily regulated by federal and state laws to protect consumers, which lenders need to adhere to in order to avoid penalties or lawsuits. For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 was created to safeguard homeowners from abusive lending practices, ensuring they are notified at least 45 days prior to a lender-placed insurance placement, and if there is no response, a second notice is sent.

At Alliant Specialty Lending, we are well-versed in the regulations surrounding lender-placed insurance and provide cost-effective, customized insurance policies that are complicit while meeting the specific needs of a given lender’s portfolio. Since regulatory bodies require commercially reasonable programs for residential lenders, it is critical that lenders work with an insurance brokerage firm that understands how to navigate these requirements. Alliant will continuously monitor both residential and commercial insurance placements to provide you with the most cost-efficient and compliant coverage.

Our team has robust experience in negotiating manuscript coverages and building tailored insurance program structures that address risk and cost concerns from the loan-level to the enterprise level. With the Specialty Lending team’s breadth of capabilities, Alliant is your single-point-of-contact for all insurance needs, including but not limited to:

• Cyber Insurance / Network Security / Data Breach
• Fidelity Bond / Mortgage Bankers Bond • Professional Liability (Broad E&O Coverage)
• Mortgagee E&O / Loan Servicing E&O
• Mortgage Impairment (Physical damage coverage for loan portfolio assets)
• Directors & Officers Liability (D&O)
• Employment Practices Liability (EPL)
• Fiduciary Liability
• Lender-Placed Insurance (LPI)
• Real Estate Owned (REO) Insurance
• Corporate Casualty (General Liability, Auto, Workers Compensation and Umbrella/Excess Liability)
• Corporate Property Insurance
• Auto Lenders: Collateral Protection Insurance (CPI) and Vendor Single Interest (VSI)
• Auto Lenders: Lender-Sponsored Master Floor Plan Insurance Program