The file is clean, the appraisal is in, and the closing slips on an insurance binder.
Hazard insurance is a small part of a loan file that stops a disproportionate number of California closings. These guides cover what the investor guides actually require, how to read an evidence of insurance the first time, and what to do when the borrower cannot get covered at all.
Four documents land in your inbox, and only one of them answers your question.
The borrower's agent sends whatever is easiest to produce. That is rarely the document your investor needs, and the difference is not cosmetic. Here is what each one is, what each one is not, and the short list you are actually working from.The cheapest mistake on the file is a block of text nobody proofread.
A wrong mortgagee clause costs no money to prevent and several days to fix. It is the paperwork error most likely to sit between a clean file and a funding. Here is what the clause is doing, which fields have to match, and where the loop actually starts.The binder says non-admitted, and your instinct is to send it back. Check these first.
Surplus lines paper turns up on California purchase files constantly now, and processors who have never seen one treat it as a defect. It usually is not. The review is the same review, plus two things that only exist on this kind of placement.Nobody will write the house, and every day of shopping costs you a day you cannot get back.
This is the failure mode that kills California purchase files, and it does not look like the others. There is no document to correct and no field to fix. What there is instead is a search problem with a deadline attached, and a sequence that determines whether it gets solved in time.Insurance is a no-tolerance charge, which is not the same as a charge that does not matter.
On a purchase, the borrower does not write a separate check for the first year. It pays through closing, in the prepaids, with a deposit into escrow behind it. Here is exactly where it sits on the disclosures, what the tolerance rules do and do not forgive, and what the cushion rule actually says.