Proof of Insurance Fee

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Question:

We are having trouble receiving proof of insurance on condos. Many insurance companies are stating that we must use EOI Direct to get an Accord form showing the insurance is current. The cost is $15 to $25. Can this fee be paid from the mortgagor's escrow account, or can the fee be assessed as another charge, like an NSF fee is assessed to the loan?

Answer:

This is a contractual issue. Have you contracted for the fee? Are you going to contract for it in the future? If so, it would be a fee similar to a Life of Loan monitoring fee for flood insurance or an inspection fee and would, in my opinion, be a PPFC.

First published on BankersOnline.com 8/17/09