New Loan Hazard Insurance Sufficiency Process and Reporting

Cenlar has recently enhanced our process for reviewing the sufficiency of hazard and flood insurance coverage on your mortgage loan portfolio. Beginning this month, we will conduct a review as part of new loan boarding and portfolio transfer processes and provide ongoing reporting.

Importantly, the review will include a report of our findings to help provide visibility into hazard and flood coverages for the mortgage balance of each loan in your portfolio. We encourage you to use this information to help assess the quality of the data or hazard documents that your customers are obtaining at closing and, in turn, are providing to Cenlar. The inaugural report will be available on Tuesday, January 14th. You may find the report – labeled Date__Client Sufficency Report_Client Name – on standard reporting channels. Future reports will be available by the 10th of every month.

When all data points are available, loans will be coded as “sufficient” or “insufficient” through the calculation and noted as such on the report. A loan may be reported as “insufficient” if the replacement cost flag or replacement cost value is blank and the coverage amount is not sufficient on its own to support the decision. The “unable to determine” status will be reported when a coverage amount is either missing or incomplete.  

Additionally, when the flood coverage is considered insufficient, Cenlar will notify the borrower that a coverage gap exists. If the insurance is not increased accordingly, Cenlar will obtain force placed gap coverage on behalf of the borrower.