Recent news and reports continue to emphasize the significant increase in foreclosure filings and repossessed properties. According to a recent article from ATTOM in 2023, over 350,000 foreclosure filings were started, and lenders repossessed over 42,000 properties. Additionally, office vacancy rates continue to rise, now at a 35 year high of 19.6%, per CNN Business. This also impacts businesses dependent on office workers, such as surrounding restaurants, retailers, and small businesses. Many of your mortgage lenders are likely seeing an increase in delinquencies and foreclosures after years of little to no activity. With these recent increases, it’s a good time to remind lenders of the importance of reporting properties immediately, even if they’re just starting the foreclosure process, in case the property has some underwriting challenges. Underwriters review each property as it’s submitted, and if your property requires additional information or isn’t acceptable, you’ll want to have time to explore alternative markets for these more challenging risks.
Some examples that present underwriting concerns include:
- Operating commercial entities
- Properties under construction, especially before being fully enclosed
- Farm buildings such as barns, silos, sheds, or structures not fully enclosed
- Properties in poor or deteriorated condition
- Properties with attractive nuisances, such as swimming pools, playgrounds, etc.
At Intact, we do our best to accommodate our clients risks while maintaining underwriting integrity. This is something we’ve proven, even in past financial crises. To help you stay informed in instances involving foreclosed property, please see our Foreclosed and Trust Package Sell Sheet and to help you gather key information when submitting a foreclosed property, utilize our Request to Add Foreclosed Location Form. This sell sheet and request form will keep you prepared when dealing with foreclosed properties.
This communication is provided for general informational purposes only and does not constitute and is not intended to take the place of legal or risk management advice. Readers should consult their own counsel or other representatives for any such advice. Any and all third-party websites or sources referred to herein are for informational purposes only and are not affiliated with or endorsed by Intact Insurance Group USA LLC (“Intact”). Intact hereby disclaims any and all liability arising out of the information contained herein.
Intact Insurance Specialty Solutions is the marketing brand for the insurance company subsidiaries of Intact Insurance Group USA LLC. Coverages may be underwritten by one of the following insurance companies: Atlantic Specialty Insurance Company, a New York insurer; Homeland Insurance Company of New York, a New York insurer; Homeland Insurance Company of Delaware, a Delaware insurer; OBI America Insurance Company, a Pennsylvania insurer; OBI National Insurance Company, a Pennsylvania insurer; or The Guarantee Company of North America USA, a Michigan insurer. Each of these insurers maintains its principal place of business at 605 Highway 169 N, Plymouth, MN 55441, except The Guarantee Company of North America USA, which is located at One Towne Square, Southfield, MI 48076. This material is intended as a general description of certain types of insurance coverages and services. Coverages and availability vary by state; exclusions and deductibles may apply. Please refer to your insurance policy or consult with your independent insurance advisor for information about coverages, terms and conditions. Some coverage may be written by a surplus lines insurer through a licensed surplus lines broker. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.