First Title Introduces Protection Against Home Loan Risk for Lenders
23 June 2011
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First Title Insurance plc (First Title) has notched up another ground-breaking risk-mitigation innovation. The new insurance policy, known as the Home Loan Protection Policy (HLPPTM), has been designed specifically to help lenders further reduce risk on their loans to homebuyers.
This initiative comes in the light of increasingly constrained lending, where increased levels of risk are a significant factor in reducing credit supply. The HLPP protects lenders against specific known and unknown risks associated with the conveyancing process, the most serious and financially devastating being mortgage fraud.
Fraud in general costs the UK an estimated £1.4 billion per annum and is on the rise, according to KPMG's most recent Fraud Barometer published earlier this year. The KPMG report says that the number of reported cases of fraud rose 16% in 2010. A number of recent high-profile mortgage fraud cases have highlighted the financial impact of mortgage fraud on lenders and home owners alike.
"Against this backdrop, it's hardly surprising that lenders are employing a variety of tactics to reduce systemic risk in their mortgage-lending activities. Policies such as the HLPP should provide them with added confidence, reduce losses and ultimately lead to more lending, which would clearly have positive knock-on benefits at a crucial time for the wider economy," said Phillip Oldcorn, Director of First Title.
The HLPP echoes First Title's highly successful Home Owners' Protection Policy (HOPP®), which was introduced last autumn to protect home owners from conveyancing risks. Like the HOPP, the HLPP provides comprehensive cover for a wide range of risks. In addition to mortgage fraud, it protects the enforceability and priority order of a lender's mortgage, as well as insuring many defects to title. The 'no fault' nature of the policy means that claims can be made without the need to prove fault or negligence.
First Title has already received positive reaction to the new policy from a number of major UK lending institutions.
Notes to editors
First Title
First Title Insurance plc is an FSA regulated insurer which commands strong financial security ratings from the insurance industry's leading rating agencies and is authorised and regulated to issue policies in England & Wales, Scotland, Northern Ireland, the Republic of Ireland, and many other European countries.
First Title Insurance plc is a wholly owned subsidiary of the First American Financial Corporation. This includes the First Title group of companies which provides a range of insurance, processing, conveyancing and property services and is committed to streamlining and protecting property and mortgage transactions.
First Title policy advisory note
This material is intended to provide general information only. For specific coverage and exclusions, refer to the relevant policy wording.