Lenders require borrowers to have an active HOI policy in order to close on a mortgage loan. HOI stands for Homeowner’s Insurance, also known as home insurance or property insurance. HOI is a type of insurance policy that provides financial protection to homeowners against various risks that could potentially damage their homes and their belongings within their home. This insurance coverage is vital for homeowners to help recover financially from unexpected events and accidents that may result in property damage or loss. For the lender, since they securitize the loan they offer with the home itself, they naturally want to ensure the value of the property from potential damages through homeowner’s insurance.

Below you will find more information on the specific documents and information required by lenders for standard homes. Condos require separate documentation outlined in Understanding HOI Documents for Condos. For more information on choosing an Homeowner’s Insurance policy, check out Selecting an HOI Provider.

What do we need?

There are three major items needed in order to clear lender requirements detailed below. Once your insurance agent has provided you with the declaration page of your finalized policy simply upload that document to your Closing Tracker and Morty will request the other items from the insurance company directly.

• Declaration Page or Evidence of Insurance: This is the evidence of a bound policy and includes a policy number. Lenders require that the finalized Declaration Page of your policy include:
  • The address of the property listed on your loan
  • Effective date on or before your closing date
  • Your, and/or your co-borrower’s, name(s)
  • Lender’s Loss Payee Clause, found on Selecting an HOI Provider or provided to the insurance company by us at Morty
  • Your loan number, found on your loan estimate or provided to the insurance company by us at Morty
• Invoice or Paid Receipt: Most borrowers choose to escrow their first year of homeowners insurance. The lender needs the invoice in order to pay for the policy. If a borrower chooses to pay upfront, we will need the receipt to confirm payment.
• Replacement Cost Estimate (RCE): The Replacement Cost Estimate is a tool that insurance companies use to estimate the cost to rebuild the insured building.
• Condos have separate HOI requirements.

Common issues

• Quotes Instead of Policies: In the case of most insurance agencies, you, the borrower, are required to finalize the policy. We cannot add lender or loan information to a quote and will have to ask you to go back to the insurance agent and finalize the policy.
• Delays. The two most common examples are incorrect contact information and unresponsive agents. The HOI process can be significantly delayed when we receive incorrect contact information for the HOI agent or when the agent is unresponsive. To avoid these delays, please make sure to supply us with an accurate email address and let your agent know to expect us to contact them. Please remember that the longer you wait to finalize your HOI policy and upload the correct contact information to your Closing Tracker, the higher your chance of delaying closing due to HOI.