One of the problems you run into when doing a mortgage, hard money loan on property is that you need to have insurance to protect the lender.

Problem you run into is that most clients insurance companies don't have a clue on how to do this. And the documents go back and forth as they don't understand how to separate the lender from the servicer. After two recent very difficult experiences dealing with the insurance neophytes, I finally collared an insurance agency who gets it to me within an hour or two (even weekends) and it's all done correctly. And believe it or not, they BEAT the clients insurance company rate by at least 20% or more.

Here's an example on what needs to be on a lender's insurance declaration page.

Insurance - MORTGAGEE: Lender. SERVICER: ITS SUCCESSORS AND/OR ASSIGNS


Replacement Cost or Loan Amount, Special Form, Broad Form, or DP3 – all perils, Co-insurance is not permitted, Deductible Amount – not to exceed the lesser of $10,000 or 5% of dwelling coverage, Loss of rents (12 months), Wind/hail coverage if required for the State the property is in, Term – 1 year, 438 BFU or Cancellation Clause (Mortgagee Endorsement – notification of cancellation or non-renewal), Annual Premium AND Balance Due (indicate if paid in full).

You need two documents to go to title/escrow for the HUD - the insurance declaration page and the bill for the coverage.