Payment Insurance Available for Mortgages
By Brad Finkelstein
NEW YORK - With the growth in the unemployment statistics, some auto companies have created programs that will allow borrowers who lose their jobs to get a break from making their loan payments.
Such products have now filtered into the mortgage and home equity lending businesses as well.
For example Securian Financial, St. Paul, Minn., has a package of insurance programs lenders can offer their clientele who face involuntary unemployment.
According to a spokeswoman for Securian, "The involuntary unemployment programs do apply to home equity lending. And they apply to first mortgages as long as the lender doesn't sell the loan and keeps the servicing in-house."
The company said these "market-differentiating products" are designed for lenders to build borrower loyalty during tough times.
Securian's offerings include WorkSafe Debt Protection, a turnkey, borrower-pay involuntary unemployment program, which can be offered to complement other loan protection products.
Securian Payment Assurance, a non-contributory involuntary unemployment protection is offered at no cost to borrowers. This program can help
It is willing to work with lenders to develop similar coverages within broader, customized debt protection programs.
Meanwhile, Kirkland, Wash.-based Cobalt Mortgage has partnered with the Rainy Day Foundation to provide mortgage protection for up to six months.
The program is known as the Cobalt Mortgage Payment Assurance Plan. The mortgage company and the foundation will make mortgage payments up to $1,800 per month at no fee or cost to the homebuyer.
Besides mortgage protection, the plan offers education and financial counseling to participants. It is available in Washington, Oregon and
Cobalt Mortgage anticipates providing assistance to more than 75 homebuyers in the first month of the program.
The Rainy Day Foundation is a 501(c)(3) nonprofit organization headquartered in the
According to its website, "The Rainy Day Foundation's mission is to 'Protect Homeowners from the Unexpected'. The foundation is not an insurance company and does not sell job loss insurance or insurance of any kind."
These products hitting the market is all very interesting. We've had our Borrowers Protection Plan and Line Protection Plan programs since 2001, offering provisions not just for unemployment but also hospitalization, disability, and loss of life for eligible transactions. A great product to protect the customer and the loan! -tt
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