From loan origination to loan closing, there are dozens of tasks involved with a mortgage transaction that require meticulous attention to detail. Due to the nature of the beast, it is not unusual for mistakes ,real or perceived ,to prompt a disgruntled borrower to bring legal action against all parties involved in the process.
It is for this reason that errors and omissions (E & O) insurance is considered an essential layer of protection for all parties involved in a loan closing. Still, not all E & O policies are created equally. Make certain your liability insurance for mortgage brokers protects against the following claims:
- Wrongful business practice
- Error resulting in financial loss for borrower and/or prospective home buyer
- Neglect of service or duty
- Insufficient communication or improper documentation
What Does an E & O Policy Do?
The insurance company defends all claims against the mortgage broker. In the event of a decision against the lender, the insurer pays the judgment or settlement up to the terms of liability agreed upon in the policy. Coverage typically does not include any claim resulting from an unlawful or dishonest act committed by the broker.
Don’t risk the financial health of your company. Make certain your insurance for mortgage brokers is up to the task in the event of an adversarial claim.