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64 If the devil is truly in the details, one of those details for mortgage servicers is managing the mortgagee-filed hazard-insurance claims process. e "Mortgagee Clause" in hazard insurance policies, in effect, creates a separate legal agreement between a borrower's insurer and their mortgagee. When an insured property becomes vacant, the mortgagee has the right to file damage claims when the property suffers a loss. Whether the proceeds are used to repair properties or to reduce the mortgage obligation, maximizing claim recoveries is part of a servicer's fiscal responsibility and program to mitigate loss. GETTING THE CLAIM RECOVERY THAT IS DESERVED Claims filed by servicers or their vendors on vacant, delinquent, or foreclosed properties yield more than $1 billion in recoveries each year. e challenge for any servicer is creating a hazard- claims program with achievable performance measures to manage the casualty loss risk. In doing so, servicers must avoid comparing apples to oranges and avoid the lemons that result in unintended and undesirable outcomes. Insurance carrier relationships are a key component of a timely and successful hazard- claims process. Whether retail or lender-placed, maintaining a professional exchange with carriers, understanding policy requirements, and operating within the carrier's management structure helps to avoid confusion and results in faster and more favorable outcomes. Unlike most borrower-filed claims, a claim transaction with an insurance carrier is part of a recurring relationship for mortgage servicers. e credibility of a claim submission is based on thorough documentation and a clear connection between the damage that has occurred and the policy coverage. Bolstering this, however, is the knowledge and understanding of insurance requirements demonstrated by the individual filing and negotiating the claim settlement. Just as with servicing, insurance standards and procedures set by each state are continuously changing. Carriers respond best to counterparts who are filing claims when those individuals have and maintain both up-to-date credentials and detailed knowledge of each claim on which they are negotiating a settlement. In setting specific performance expectations and requirements, it is again important to compare apples to apples. Claims processes require both operational excellence and compliant approaches. Hazard-claims processes are regulated based on laws in 49 states, and require the use of either state-licensed attorneys or state-licensed Public Adjusters. In 12 states there are explicit prohibitions on claims filed D A T A & R E S E A R C H / B E R N I E D I M O N T APPLES, ORANGES, AND LEMONS: EFFECTIVELY MEASURING HAZARD- CLAIMS MANAGEMENT P

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