I know this may seem like a silly question in light of all the other stuff we are dealing with on loans, but. my loan operations manager has some loan officers questioning the fact that we require a new Agreement to Provide Insurance on renewed loans. Does anyone know if this is indeed required, recommended, or just an extra piece of paper?
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I don't think it's a requirement, but it's definitely best practice! Our doc prep software automatically produces one for every loan. I can't quite figure out why loan officers try to reduce documents to be signed (to please the customer) while introducing the bank to added risk. It's just one piece of paper, one signature. puhleez. Some years back, officers here were throwing the same hissy fit over the number of documents their customers were being required to sign and asking if all the documents were necessary. Give me a break.
Anyway, sorry I don't have a "real" answer to your question. maybe someone else does. But the fact that our doc prep software produces the form automatically communicates to me that the document should be signed.
_________________________Addendum. also, having one signed for every loan regardless or whether or not it's a renewal or refi, cuts down on loan closers failing to have one signed because the practice is not a habit. Any time employees have to determine a need for a document on a note by note basis, there is going to be an automatic margin for error.
_________________________OK - I'm going to play devil's advocate. If your note and/or security agreement/mortgage already details the insurance requirements why require an additional document? I can see requiring the ATPI if you wanted to add specifics that your other docs don't include (like maximum deductibles, specific insurance amounts, etc.) or if your VSI provider requires it or state law requires it. But requiring it without having a solid business reason doesn't really make sense.
As for the doc system automatically providing it, chances are its providing it because the bank made the decision to use it. I know that Laser Pro allows you to choose when to include it in the product and when to exclude it - the decision is made by the bank because it's not a regulatory issue. I think it's really important to understand why your system is automatically producing this document rather than just assuming it's needed because it appears when you hit print.