A standard mortgage clause was created almost one hundred years ago to address the needs of lenders. Many properties were being purchased with mortgages, and lenders wanted to ensure they would be compensated for losses under the borrowers' property policies even if the borrowers violated policy conditions. Lenders helped draft wording that could be attached to borrowers' policies.
Sample Mortgage Contingency Clause: The following is an example of a mortgage contingency clause that you may find in a purchase contract. The exact terms of the contract will differ as they must be agreed upon by both buyer and seller.
Here is an example of a mortgagee clause: BAC Home Loans Servicing, LP ISAOA/ATIMA PO BOX 12345 Dallas, TX 75087 Loan Number: 1234567890. How It Works. It is important because it stipulates who has legal right to financial reimbursement in the event the property in question is devalued by a loss.
For example, if the mortgage holder accidentally sets fire to the house and burns it down, a mortgage clause would insurance that the mortgage lender would be reimbursed for this loss, in addition to the mortgage holder. Without this clause in many property insurance policies, mortgage lenders would be vulnerable to many major losses.
STANDARD MORTGAGE CLAUSE IT IS HEREBY PROVIDED AND AGREED THAT: 1. Breach of Conditions by Mortgagor, Owner or Occupant: This insurance and every documented renewal thereof - AS TO THE INTEREST OF THE MORTGAGEE ONLY THEREIN - is and shall be in force notwithstanding any act, neglect, omission or misrepresentation attributable
Mortgagee Clause Definition A property insurance provision granting special protection for the interest of a mortgagee (e.g., financial institution that has an interest in the property) named in the policy, in effect setting up a separate contract between the insurer and the mortgagee.
shall include a standard mortgage clause in favor of and in form acceptable to Lender. Lender shall have the right to hold the policies and renewals thereof, and Borrower shall promptly furnish to Lender all renewal notices and all receipts of paid premiums. In the event of loss, Borrower shall give prompt notice to the insurance carrier and ...
Standard mortgage clause is a clause in an insurance policy that protects the interest of the lender to recover the proceeds even if the borrower is at fault. This type of clauses is mainly included in fire and casualty insurance. The incorporation of this clause in an insurance policy leads to the creation of a separate contract between the ...
A standard mortgage clause (also called a union mortgage clause) is an insurance provision that covers the mortgage lender but not the borrower for a loss involving the mortgaged property. This clause protects the lender in the event that the borrower intentionally damages the property.
Mortgagee Clause. A mortgagee clause is a provision that establishes a kind of protection for the mortgagee. The mortgagee clause promises that the mortgagee will be provided with advance written notice in the event the homeowner’s insurance policy on the property is going to be canceled for some reason.