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SummaryExpanding on the analysis of insurance approval timelines in Part 1, Part 2 unveils the crucial role of insurance brokers. Advocate’s comprehensive analysis of review times across our 20,000+ reviews reveal striking variations in approval timelines among different broker categories. What does this mean for lenders? Identifying the insurance broker for your borrower early and seeking Advocate's (or your existing consultant's) opinion on the broker's responsiveness and professionalism are the fastest way to determine if there will be issues within insurance.Advocate’s Data-Driven InsightsDiving into Advocate’s extensive dataset, we identify substantial disparities in approval timelines among various insurance broker categories (see Methodology section). A low significance level, represented by a p-value, suggests these variances are not merely random chance, indicating the impact of broker categories on insurance compliance approval timelines.This underscores the importance of str
Hello All! I was curious to know what your thoughts are on writing a waiver for Captive Insurers/Risk Retention Groups and what you have seen with some of the agency lenders (Fannie Mae/Freddie Mac) in regards to these types of waivers. Freddie does not have anything in their guide in regards to the policy holder surplus which is usually a problem with these type of insurers, but Fannie Mae does. Any insight would be greatly appreciated! 😊
In long-standing industries and markets, crises are often cyclical, and inevitable. While the players on this stage may change, the recurring nature of challenges remains constant. The insurance sector, currently facing challenges, can derive insights from historical crises, particularly the 1980s casualty crisis and financial crisis of 2008. This article aims to draw parallels between past and present challenges, guiding lenders through the intricacies of today’s complex landscape. Today, the insurance industry is facing a potential crisis, underscored by the climate change driven natural catastrophes (NATCATs). Populous states are lacking coverage options and turning to insurers of last resort. In this tumultuous landscape, market participants, particularly lenders, stand at a crossroads, prompting a collective call to action. The 1980s Casualty Crisis: Drivers and Dilemmas In the 1980s, the insurance industry faced a significant challenge known as the casualty crisis, primarily affe
Summary This two-part analysis delves into the insurance compliance process for mortgage lenders. Part 1 explores the correlation between insurance compliance turnaround time and five determinants commonly linked to extended approval timelines. In Part 2, our focus shifts to investigating the impact of insurance brokers in shaping these timelines. Insights from Advocate’s Reviews At Advocate, our cutting-edge technology and expert insurance review team consistently outperform industry standards in expediting insurance compliance processes – a crucial step in facilitating loan closings. Despite these advancements, variations persist in compliance and resolution turnaround times across different deals. The insights presented in this analysis are derived from our insurance reviews conducted over the past 12 months. The dataset encompasses all approved loans across various loan programs and lenders. The key metric under evaluation is the turnaround time on insurance compliance, represe
None of us expected Hilary to show up as a storm, certainly not in California. Who’d have thought that California of all places would get hammered by a tropical storm so bad that a discussion would be needed on the state of property insurance going forward? In reality, however, a lot of experts in the industry have been ringing alarm bells for a good while. While it’s true that their fears didn't stem from anticipating storms to hit the state, their reasons were valid and remain so today. What are those reasons and is Storm Hilary going to make things worse? If so, then to what extent? Was there a time when Florida was in the same state? Can we learn from Florida to manage California’s impending crisis better? These questions, and many more, are merited and demand intellectual pondering followed by swift, actionable measures. Today, we will discuss what the current state of California’s insurance market is and what lies ahead. Storm Hilary is unprecedented, but destructive, nonetheles
The integration of Artificial Intelligence (AI), particularly Large Language Models (LLMs) like ChatGPT, stands as a transformative breakthrough across industries. This advancement promises efficiency, precision, and cost-effectiveness. In the insurance sector, these strides carry the potential to revolutionize crucial processes such as writing policy waivers for compliance challenges. This significance is amplified during agency reviews, where regulatory scrutiny is rigorous. Creating waivers tailored to meet the stringent requirements set forth by Fannie Mae, Freddie Mac, and HUD is imperative for ensuring compliance. AI’s ability to analyze vast amounts of data and generate precise, context-aware language makes it a valuable tool in this process. As insurance companies navigate the complexities of agency reviews, the effective use of AI in writing waivers can contribute to a streamlined and compliant insurance process. The Potential of LLMs in Insurance LLMs are powerful tools fo
As we approach 2024, the multifamily and commercial real estate (CRE) sectors find themselves at a critical juncture. These sectors, integral to the American economy, are influenced by a myriad of factors, including economic conditions, Federal Reserve policies, and evolving market dynamics. In this article, we investigate the current state and outlook of multifamily and CRE, highlighting their significant impact on lenders navigating short and medium-term expectations from the Federal Reserve. As experts on Wall Street analyze these trends, it's crucial for stakeholders in the real estate and financial sectors to stay informed and adapt to the changing landscape. Economic and Market Overview The multifamily and CRE sectors are heavily influenced by broader economic indicators. As of the midyear review of 2023, the CRE market, specifically, has been undergoing notable changes. Investment volumes in this sector are expected to decrease by 37% year-over-year in 2023, but are anticipated
As we evaluate the multifamily market's trajectory going towards the end of 2023, we face a landscape of nuanced economic signals and shifting market drivers. Despite its resilience, multifamily real estate is not immune to broader economic forces. For lenders in this space, understanding these dynamics is critical to navigating the waters ahead. Current State of the Multifamily Market The multifamily lending landscape of 2023 is marked by cautious optimism and calculated navigation through economic indicators. Fannie Mae estimates multifamily originations to be marginally higher in 2022, ranging from $460 billion, followed by a projected decrease to approximately $440 billion in 2023. This expected downturn aligns with a broader forecast of a market softening, potentially intensified by an economic recession. Freddie Mac's observations corroborate this sentiment, noting that the labor market's robust performance—averaging nearly 280,000 new jobs per month through the first half of 2
In the dynamic landscape of commercial real estate, insuring residential-type properties like multifamily housing and apartment complexes can be challenging. For property owners navigating these complexities, the California FAIR Plan stands as an essential safety net, offering insurance when traditional coverage options fall short. This insurer of last resort should not be an afterthought but a strategic priority. Let’s delve into how California FAIR Plan can protect your commercial real estate investments. Eligibility Requirements Commercial properties qualify for the California FAIR Plan when traditional insurance options are not available. Here are the key points regarding eligibility and the type of commercial properties covered under the California FAIR Plan: Eligibility Determination The FAIR Plan is considered as the insurer of last resort when a broker's diligent search in the traditional market fails, as defined by California Insurance Code section 10090 (d). High-Risk Pro
Hello! We are seeing a lot of waiver requests for borrowers that are unable to get ordinance and law coverage at all. Have you experienced this before, and what have you done and prepared to submit a waiver for this?
Does the loan collateral property address listed on the ACORD (or other insurance documentation) need to exactly match the address listed on the Appraisal, including abbreviations and punctation? For example, does “W” need to be updated to the full word “West”, does “Dr.” need to be updated to “Drive”, and do discrepancies with respect to periods (.) or commas (,) need to be resolved?
Does the Named Insured entity listed on the ACORD (or other insurance documentation) need to match the Borrower Entity listed on the loan documentation including punctation such as commas (,)?
Does language such “Terrorism is included” on the ACORD need to be updated to “Terrorism is included in General Liability and Umbrella”?
Does language such as “0 Liability deductible” on the ACORD need to be updated to “0 General Liability deductible”?
Does the AOP deductible need to be explicitly stated on the ACORD for Ordinance & Law, Coverage B&C?
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