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Job Loss Protection is a
program designed for lenders, protects lenders and their borrowers
against exposures caused by a borrower’s involuntary unemployment.
Designed
to relieve borrower anxiety when making a large purchase such as
a home or automobile.
Pays
the monthly installment payment during the period of unemployment.
Can
be sold on mortgages, home equity loans, and auto loans or leases.
May
be sold on a blanket basis, in which the policy insures all loans
originated by a lender, or may be sold to individual borrowers on
a voluntary basis at loan origination.
Benefits
to the lender:
- Increased
loan or lease volume due to greater customer confidence
- Enhances
credit quality of the portfolio and improves portfolio performance
via reduced delinquencies and defaults
- Covers
escrowed property tax and insurance premiums which maintains the
lender’s security interest on their mortgage portfolio
- The
credit enhancement provided by Job Loss Protection coverage may
allow lenders to decrease interest rates which will increase volume
- Source
of fee income
Benefits
to customers:
- Relieves
customer hesitancy about large purchases
- Financial
assistance during personal economic hardship
- Simple
claims procedures based on eligibility for state unemployment
benefits
- Preserves
customer’s credit rating
- May
reduce monthly payment in certain scenarios
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