CHICAGO-Does the Mortgage Bankers Association of America have strength in numbers to convince the insurance industry to standardize policies on coverage and paperwork? Members of an MBA task force are not 100% sure, they indicated during this week's convention.
An MBA Commercial Real Estate/Multifamily Board of Governors task force has been at work since February has been working on model certificates of insurance, which lenders have been forced to rely on in lieu of actual policies, which often do not arrive until six months after deals close. The policies, rather than certificates, often provide a clearer picture of coverage, including the often vague acts of terrorism that have vexed lenders and borrowers since Sept. 11, 2001.
MBA members have influence over “tens of billions of dollars of insurance premiums,” says Robert Vestewig, chief operating officer of Houston-based GEMSA Loan Services, LP. “This ought to give us some market clout,” he suggests.
Not everyone is that optimistic.
“I don't see any leverage we have other than making them look bad, politically,” says James J. Stolze, assistant vice president of Omaha, NE-based Woodmen of the World Life Insurance Society.
However, all it takes is one carrier to start a wave of change, suggests Jan S. Sternin, senior vice president of Overland Park, KS-based Midland Loan Services, Inc.”All it takes is one company to adopt a standard that we can come up with,” she says, suggesting that company would be seen as the carrier of choice.
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