CAS Mortgage Insurance Primer Presentation
How MI Works: Considerations for Disaster Events
Even if property damage was not the primary cause of the loan default, the MI claim
amount can still be reduced because of unrepaired physical damage to the property.
If the mortgage insurance company settles the claim by Conveyance or Property Sale
option, then it can reduce the benefit by the estimated property repair cost if:
1.
As of the claim submission date, the property has not been restored to its
condition that existed on the commitment date, reasonable wear and tear
excepted.
2. The mortgage insurance company reasonably determines that the estimated
cost to restore the property to its condition on the commitment date exceeds
$5000.
If the MI company reasonably determines that no claim would be payable if
repairs were made (i.e., if there were no loss), the mortgage insurance company
can deny the claim in full regardless of the settlement option selected.
CAS Mortgage Insurance Primer Presentation
10/18/2017
© 2017 Fannie Mae. Trademarks of Fannie Mae.
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