Insurance Requirements Form | Silver Hill Funding

Insurance Requirements

Insurance Requirments

Current Insurance Agent Information (Please Complete) along with current policy

Insurance Process Form

Insurance Requirements

  • Building Coverage: Equal to the lesser of the following – 100% of the insurable value of the improvements, or the unpaid principal balance of the mortgage on an agreed value basis.
  • Wind/Named storm and Hail (required for properties located in the following states AL, FL, GA, LA, MS, NC, SC & TX)
  • General Liability:
    • Commercial: $1MM Per Occurrence and $2MM Aggregate per location
    • 1-4 Unit Investment: $500,000 Per Occurrence and $500,000 Aggregate per location
  •  Flood: Required if property is located in an area designated as a “special flood hazard area”. Flood Required:
  • Loss Payee/ Mortgagee/Additional Insured Clause: Lender must be shown as Mortgagee, Lenders loss payee on the Property Coverage, and named as an additional insured in connection with all Liability lines of coverage. The certificate holder section must show Silver Hill Finding, LLC as outlined below:

Silver Hill Funding, LLC
I.S.A.O.A., A.T.I.M.A.
C/O Bayview Loan Servicing, LLC
4425 Ponce De Leon Blvd
Coral Gables, FL 33146
Loan No: XXXXXXXX

Insurance Certificate must include:
Policy Form/Certificate Requirement: ACORD 28 for property policy and ACORD 25 for all liability lines of coverage

  • Named Insured: Borrower Name Listed Above
  • Policy Term: 12 month Term per property location.
  • No Blanket Policies Allowed.
  • Policy Number:
  • Special Form or All Risk Coverage
  • Replacement Cost or Agreed Value Endorsement
  • Coinsurance – A Coinsurance Clause in the policy is allowed at 80% for RCV policies. In cases where co-insurance is allowed, the amount of the coverage must be determined using 100% of the insurable value and cannot be the Unpaid Principal Balance (UPB) if the UPB is below the Insurable Value.
  • Deductible: amount must be specified and cannot exceed 10% of the insured value of the building for all perils
  • Law and Ordinance: On all Commercial Properties – Coverage A, B and C required.
  • Cancellation Clause: Evidence from Policy or Endorsement (30 days for notice of cancellation and 10 days for non-payment)
  • Insurance Ratings: “B+“ or better according to A.M. Best property and casualty ratings. Lloyd’s of London policies are acceptable.
  • Annual Premium and Balance Due: Must provide invoice showing premium paid in full. All Balances must be paid prior to or at closing.
  • Insurance will be impounded and will require all premium and/or balance due to be paid at closing. No financing or installments allowed.

Lender Title Requirements

A title commitment (aka a preliminary title report) is the commitment to issue a title policy upon closing. The title commitment generally will disclose (and give you copies of) recorded title matters, claims or encumbrances which are found by the title company.

The title commitment has one main purpose: to commit the title insurance company to issue a title insurance policy at closing based on the exclusions, exceptions and requirements stated in the title commitment. We are committing to issue a title policy based on our underwriters decision that everything is satisfied with the title and it can be transferred as “marketable title.”

Download the title requirements form

Frequently Asked Questions

What types of policies are there?

There are two types of policies, owner’s policies and loan policies.

Owner’s Policy

The owner’s policy protects you against losses from ownership problems that arose before you bought the property, but that were not known at the time you bought the property. For example, you could lose title to your property due to fraud, errors or omissions in previous deeds, or forgery of a previous deed. The owner’s policy protects the buyer from the covered risks listed in the policy.

There are separate types of policies for commercial and residential property.

Loan Policy

The loan policy is issued to the mortgage lender. It protects the lender’s interest in the property until the borrower pays off the mortgage.

Why do I need a loan policy?

Most lenders will require a loan policy as a condition of the mortgage. The policy will repay the balance of your mortgage if a claim against your property voids your title. A loan policy covers up to the amount of the principal on your loan.

What’s the difference between a title commitment and a title policy?

The title commitment comes before closing; the title policy is issued after closing. The commitment says that a title company is willing to issue title insurance under certain conditions and if the seller fixes certain problems. The policy provides coverage for the property.

What does the title commitment do?

The title commitment lists any potential issues, exclusions, or exceptions. It alerts us of issues that exist and could cause problems in the future. It does not guarantee that there are no current issues or that none will arise in the future. SHF will work with the title company and discuss how to clear potential issues with the title agent. Exceptions and exclusions are items not covered by the policy.

Title Defects

A title defect is anything that can cause a title to be considered invalid or defective in some way. Title defects can delay the closing of your loans, since it may require the Lender and the Agent to do additional research to resolve title defects.

Some examples are:

  • Invalid documents due to forgery, fraud, undue influence, duress, incompetency, incapacity, or impersonation.
  • Failure of any person or entity to have authorized a transfer or conveyance.
  • A document affecting title that is not properly executed, signed, witnessed, notarized, or delivered.
  • Undisclosed or unrecorded easements not otherwise apparent on your land.
  • No right of access to and from the land.
  • A document executed under a falsified, expired, or otherwise invalid power of attorney.
  • A document not properly filed, recorded, or indexed in the public records.
  • Ownership claims by undisclosed or missing heirs.
  • Defect arising from an improper prior foreclosure.
  • Undisclosed restrictive covenants affecting your property.

Lien issues can also cause title defects. Some examples of lien issues are:

  • Any statutory or constitutional contractor’s, mechanic’s, or materialman’s lien for labor or materials that began on or before the policy date. Talk to an attorney about your rights.
  • Lien for labor or materials furnished by a contractor without your consent.
  • A previous owner failed to pay
    • a mortgage or deed of trust
    • a judgment, tax, or special assessment
    • a charge by a homeowners or condominium association
  • Other liens or claims that may exist against your title that are not listed in the policy.

Title Commitment

A title commitment (aka a preliminary title report) is the commitment to issue a title policy upon closing. The title commitment generally will disclose (and give you copies of) recorded title matters, claims or encumbrances which are found by the title company. The title commitment has one main purpose: to commit the title insurance company to issue a title insurance policy at closing based on the exclusions, exceptions and requirements stated in the title commitment. We are committing to issue a title policy based on our underwriters decision that everything is satisfied with the title and it can be transferred as “marketable title.”

 

There are 4 main sections of the title commitment…Schedules A, B, C, D.

Schedule“ A” 

Covers basic information about the transaction such as the effective date; policy coverage amount; the legal name of the current record title owner and a legal description of the property. Problems will arise if this information is incorrect.

Schedule“B ”

Contains a pre-printed list of standard exceptions that the title policy will not cover. Most importantly it will also list matters specific to the transaction that could impact the usefulness of the property, such as restrictive covenants, easements, etc.

Schedule C 

This is considered the heart of the title commitment as it lists the requirements that must be satisfied for the issuance of the title policy. This is information about marital status, updated surveys, liens, judgments, lawsuits etc. In most cases seller is responsible for resolving issues identified in Schedule C.

Schedule D

This schedule is primarily for disclosure purposes. This schedule outlines the parties who have a share in any part of the title premiums, including underwriters and title agents.

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