Force-placed insurance buying in bulk

[Peter Halliday]

Curious what threshold people find FPI to be more justifiable to buy in bulk? What vendors do you use? I assume most investors choose as an amount equals either all-in costs, UPB, or FMV. I wonder what the typical breakdown is amongst investors. I've typically used amounts more like UPB.

[Chris Seveney]

@Peter Halliday

The policies I have seen in the past do not have a “bulk discount”. I have seen lender paced policies range around 1% and investor policies around .6%

This is based on around 5-10M of insured. Maybe if you get up to 25 or 50M it may be lower.

I typically insure for the payoff amount or value (whatever is lower) for notes and if they are contract for deeds I insure for $90-$100/sf to avoid coinsurance.

When I got started in notes I had my servicer carry the fpi (still do in most cases) as it’s just easier to manage.