Collateral Assignment Coordination & Existing-Policy Review

For a plain-English explanation of what a collateral assignment is and why it delays closings, read how collateral assignment works. This page covers the coordination service and the existing-policy review.

Collateral assignment is not the same as naming a beneficiary

A beneficiary designation directs policy proceeds. A collateral assignment is a separate arrangement that may give a lender specified rights in proceeds to secure a debt. The exact effect depends on the applicable policy, lender documents and assignment form.

What lenders may need

Each lender has its own process. The lending team may provide the required assignee name, form, coverage amount, proof-of-policy requirements and instructions for recording the assignment with the carrier. These details should be followed exactly.

Coordinating the documentation

• Confirm the lender’s assignment instructions before the policy is issued where possible.
• Provide the carrier-approved assignment form and any requested evidence of coverage.
• Allow time for carrier acknowledgement and lender review.
• Keep copies of final documentation for the closing file.

After the loan is satisfied

After a secured obligation is paid, the lender’s assignment may generally be released through the applicable lender and carrier procedures. Ask the lender and carrier what documents are needed at that time.

Already have a policy? Request an existing-policy review

You may not need a new policy. Before relying on existing coverage, the lender usually needs to confirm the face amount, remaining term, ownership, any prior assignments and that the carrier will acknowledge a collateral assignment. We check those points with you and the carrier, then hand the lender what it needs.

Have handy: your lender's written requirement, the target closing date and the policy's declarations page. Do not cancel or replace existing coverage until the lender has confirmed what it will accept.

Prefer to talk? Call 925.852.8261 or email Beau.