Escrow Insurance

Homeowner’s insurance may seem like a big mess of papers, passwords, and premiums. That is, until the unexpected happens to your home. Then your insurance becomes your best friend faster than Clark Kent changes into his Superman clothes.

Your escrow account takes the anxiety out of paying your insurance premiums. To make it even easier, we’ve put together this guide. We’ll explain the different types of insurance you may need to carry, and what to do in some common insurance-related scenarios.


GENERAL INFO & CHANGES

HOW MUCH INSURANCE DO I NEED?

The types and amounts of insurance you need to carry for your home depend on your situation. As a homeowner, you need enough insurance to cover the remaining principal on your loan. So if your unpaid principal totals $80,000, you need to carry insurance totaling at least $80,000.

(There may be exceptions to this for properties in California. Your insurance carrier can tell you more about this.)

Depending on your property’s location, you may need to carry flood insurance. Flood policies generally need to meet the lower of the following:

  • The full replacement cost of the dwelling and insurable improvements made to it, OR
  • The maximum allowed through the National Flood Insurance Program, which is $250,000.

CAN I USE ANY INSURANCE CARRIER I WANT?

There are a lot of insurance companies out there. And unfortunately, some are less reliable than others. But as a Mr. Cooper customer, you have some protections against getting stuck with a bad apple insurance company. We have a set of standards insurance companies have to meet if they’re going to insure our customers’ homes.

Please contact us if you have questions about whether your preferred insurance providers qualify.

SOMETHING’S CHANGED WITH MY POLICY. WHAT NOW?

If there are any changes to your insurance policy or carrier, please do one of the following as soon as possible:

  • Visit www.mycoverageinfo.com, enter the PIN “CTX729” and your loan number, then follow the simple instructions to upload confirmation of your changes. (Best method!)
  • Fax confirmation of your updates to 800-687-4729. Be sure to include your loan number on your fax cover sheet.

Mail confirmation of your updates to:

Nationstar Mortgage LLC
Its Successors and/or Assigns
PO Box 7729
Springfield, OH 45501

Feel free to call us at 888-480-2432 if you have any questions about communicating insurance changes. It’s important we’re kept in the loop on these so we can keep your escrow account up to date and use its funds properly on your behalf.

You can review your current insurance coverage information at the site we just mentioned: www.mycoverageinfo.com. When prompted for a PIN number, enter CTX729. Select the “Customer” tab and enter your loan number to access your information.

One more thing: The following Mortgagee Clause must appear on your required insurance policy. If it’s not there, contact your insurer and let them know.

Nationstar Mortgage LLC
Its Successors and/or Assigns
PO Box 7729
Springfield, OH 45501


TYPES & REQUIREMENTS

WHAT KIND OF INSURANCE DO I NEED?

Here are common types of homeowner’s insurance and general guidelines about who needs them. Remember, this is just an overview. That means you shouldn’t assume any of these do or don’t apply to you based on this list alone. A chat with your insurance carrier is the best way to be sure about your requirements.

FLOOD INSURANCE

Required if you live in an area having special flood hazards. This is determined based on flooding within the last 100 years.

WINDSTORM/HURRICANE INSURANCE

Required in high-risk areas like the Gulf Coast states and Hawaii.

SUBSIDENCE INSURANCE

Required for properties in areas at high risk for subsidence. Subsidence is movement of the ground surface in areas overlying underground mines.

HOMEOWNER ASSOCIATION (HOA) INSURANCE

Can be required if you live in a condo townhome. In this case, your property association manages it and includes your payments as part of your HOA dues.

CONTENTS INSURANCE

Covers the contents of your home, not the home itself. It’s not required, and we can’t include payments for it in escrow.


MORTGAGE INSURANCE

WHAT IS MORTGAGE INSURANCE?

Now we come to an insurance type that deserves its own section. It’s called Mortgage Insurance, or MI.

MI is a little complicated. Basically, it lowers a lender’s risk when making a home loan.

In most cases, if you pay at least 20% down on your home, you’re not required to carry MI. And when you are required to carry it, you may be eligible to request cancelling it when you’ve reached 20% equity in the home.

Depending on the type of loan you have, you’ll pay for mortgage insurance in different ways. It can either be private mortgage insurance (known as PMI) or FHA mortgage insurance (known as MIP).

HOW DO I REMOVE PRIVATE MORTGAGE INSURANCE (PMI)?

If you’re required to carry PMI, we’ll cancel it on your behalf on the date your loan-to-value ratio is scheduled to reach 78%.

Your loan-to-value (or LTV) ratio is the amount you’ve borrowed, divided by the appraised value of the property. So if you borrow $85,000 to buy a house appraised at $100,000, your loan-to-value ratio is 85,000/100,000… which equals 0.85, also known as 85%.

Based on the original information in your loan agreement, we’ll project the date when your LTV ratio will hit 78%. And we’ll plan to cancel your PMI on that date.

Note that this projected date for automatic cancellation is fixed and can’t be moved up. However, if you believe your loan qualifies for PMI cancellation before the projected date, you can submit a cancellation request.

You need at least 20% equity in your home to request cancellation, and some other conditions may apply. Here are the main ones:

  • Your loan must be current.
  • In the last twelve months, you can’t have been more than thirty days late on any payment.
  • In the last twenty-four months, you can’t have been more than sixty days late on any payment.
  • We may need to order a professional appraisal of your property to verify its current value. The appraisal needs to happen within ninety days of your PMI cancellation request.

To discuss your specific requirements for requesting PMI cancellation, please contact us.

You can send PMI cancellation requests to:

Mr. Cooper
Attn: Escrow Research
Lake Vista 4
800 State Highway 121 Bypass
Lewisville, TX 75067

Cancellation requests by mail must include an explicit request to cancel PMI, your loan number, the date, and the signatures of all borrowers.

HOW DO I REMOVE FHA MORTGAGE INSURANCE (MIP)?

This is a little more complicated than we can fit neatly in here, so please contact us to review your options for cancelling MIP.


PROPERTY INSURANCE CLAIMS

PROPERTY INSURANCE CLAIMS

Count yourself a lucky homeowner if the things you’re insured against never happen. But if your luck runs out and a large or small disaster strikes your home, your insurance company may issue an insurance claim check. A claim check is meant to cover various costs including repairs.

If your insurer sends the check to us, we may endorse it and send it to you. Depending on certain factors, we may instead deposit it and distribute the amount to you incrementally as repairs are completed.

If you get an insurance claim check, please call our Loss Draft Department at 866-825-9302 to learn more. You can also visit www.insuranceclaimcheck.com to get information on your situation and next steps.

You’ll also want to review our Loss Draft Claim Package. It contains information about steps you’ll take and documents you’ll need to be sure repairs are completed as quickly as possible.


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