National Mortgage Insurance Corporation Master Policy
This Master Policy defines the contract for mortgage insurance for a loan between us and the
Insured. It is a binding document, affixed with our seal and signed in facsimile, as of the effective
date shown below. Coverage under this Policy applies only to the Insured or Beneficiary. No
other Person, including any Borrower, is covered by this Policy.
We agree to pay to the Insured or Beneciary, in consideration of the premiums to be paid as specied
in this Policy, and in reliance on an Application, any Insurance Benet determined to be payable in
connection with a Default by a Borrower on a loan, subject to the terms and conditions of the related
Certicate and this Policy.
Name and Address of Insured:
Master Policy Number:
Policy Effective Date:
INSURED AUTHORIZED SIGNATURE PRINTED NAME
IN WITNESS WHEREOF, National Mortgage Insurance Corporation has caused its corporate seal to
be afxed hereto, and this Master Policy to be signed by its duly authorized ofcers in facsimile
and to become effective as its original seal and signature and binding on the company.
NATIONAL MORTGAGE INSURANCE CORPORATION
2100 Powell Street, 12
TH
Floor | Emeryville, CA 94608
Adam Pollitzer
Bill Leatherberry
CHIEF EXECUTIVE OFFICER
SECRETARY
C
O
R
P
O
R
A
T
E
W
I
S
C
O
N
S
I
N
N
a
t
i
o
n
a
l
M
o
r
t
g
a
g
e
I
n
s
u
r
a
n
c
e
C
o
r
p
o
r
a
t
i
o
n
SEAL
2009
AS08.12.01_01.22
USMI-001 (03/20)
First & Last Name, Address
MP#
mm/dd/yyyy
Printed Name Here
Table of Contents
PAGE PAGE
Introduction to the Master Policy 1
1 DEFINITION OF TERMS USED IN THIS POLICY 1
2 SCOPE OF THIS POLICY AND OUR AGREEMENT 7
3 Duration of coverage 7
4 Documents that constitute our agreement 7
5 Governing law; severability;
jury waiver; successors and assigns 7
6 COMMUNICATIONS REGARDING THIS POLICY 8
7 Communications 8
8 Providing loan information
to GSE Beneciaries 8
Getting started 8
9 Delegated vs. non-delegated underwriting 8
10 Applying for coverage 9
11 Your responsibilities for each Application 9
12 Representations by the Insured 9
13 APPROVED AND DECLINED APPLICATIONS;
AUDITING PROCEDURES 10
14 Commitments or declined Applications 10
15 Monitoring of loan manufacturing process;
auditing procedures 10
Exclusions, other remedies
and rescission limitations 11
16 Exclusions and other remedies generally 11
17 Limitations on our right to rescind coverage 12
Other Exclusions 15
18 Data inaccuracies 15
19 Default that occurred before coverage began
or after coverage ended 15
20 Defects other than Signicant Defects 15
21 Excess Insurance Benet 15
22 Failure to comply with applicable law 15
23 Failure to comply with conditions
and Insured’s obligations 16
24 Failure to make balloon payment 17
25 Failure to satisfy Commitment conditions 17
26 First lien status 18
27 Incomplete Construction 18
28 Loan acquired by natural person 18
29 Non-residential property 18
30 Pattern Activity 19
31 Physical Damage as principal cause of Default 19
32 Physical Damage that is not the principal
cause of Default 20
33 Pre-existing Environmental Impairment 20
34 Release of indebtedness 20
35 Signicant Defect 20
36 Single Loan Fraud 21
37 Unapproved assumption 21
38 Unapproved change of loan terms or Property 21
39 Unapproved Servicer 21
40 Unapproved resale restrictions 21
Your responsibilities 22
41 Condition to our obligations 22
42 RESPONSIBILITIES OF THE SERVICER 22
43 PAYMENT OF PREMIUMS 22
44 Timing of initial premium payment 22
45 Renewal premiums 23
46 Lapse and reinstatement of coverage 23
47 REQUIRED REPORTING AND NOTIFICATIONS 23
48 REQUIRED APPROVALS FOR CHANGES 24
49 Change of Servicer; Deciencies in performance 24
50 Change of Beneciary 24
51 Workouts; Changes to the
Property or loan terms 24
52 DEFAULT NOTIFICATIONS AND YOUR ONGOING
RESPONSIBILITIES REGARDING DEFAULTS 25
53 Notice of Default 25
54 Monthly Default reports 25
55 Cooperation in servicing efforts 26
56 Payment of Advances 26
57 Appropriate Proceedings 26
58 Loss mitigation 27
59 Foreclosure bidding instructions 27
60 Eminent domain 27
61 OUR OPTIONS UPON DEFAULT 27
62 Filing of accelerated Claim 27
63 Claim advances 28
i
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
Table of Contents
PAGE PAGE
Claims 28
64 FILING A CLAIM 28
65 What happens if you miss the deadline 28
66 Documents required 29
67 Additional Claim information required 30
68 Access to the Property 31
69 PAYMENT OF A CLAIM 31
70 Calculation of the Claim Amount 31
71 Additional requirements for
determining the Claim Amount 32
72 Options for payment of Insurance
Benets to settle a Claim 33
73 Percentage Option 33
74 Third-Party Sale Option 33
75 Acquisition Option 33
76 Anticipated Loss Option 34
77 Adjustments for Physical Damage to the Property 34
78 Clarications on adjustments
for Incomplete Construction 34
79 Amounts added to or deducted
from the Insurance Benet 35
80 Delayed settlement 35
81 Written Explanation of Benets (EOB) 35
82 Coordination of coverage 35
83 AFTER A CLAIM IS PAID 36
84 Fulllment of our obligation 36
85 Supplemental Claims 36
86 Required repayments 36
87 Subrogation 36
88 Pursuit of a deciency judgment 37
89 Preservation of rights; return of Insurance Benet 37
90 YOUR RIGHTS AFTER A CLAIM 37
91 Right to appeal 37
92 Reinstatement after appeal 38
93 Arbitration 38
94 Limitation of actions 38
Cancellation 38
95 CANCELLATION OF LOAN COVERAGE BY YOU 38
96 Refund of premium 39
Annex A 40
ii
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
Introduction to
the Master Policy
1 DEFINITION OF TERMS
USED IN THIS POLICY
“Acquisition Option” means the settlement of a
Claim as described in Section 75.
“Advances” means the expenses related to a loan
that you must pay as described in Section 56.
“Anticipated Loss Option” means the settlement
of a Claim as described in Section 76.
“Application” means a request for mortgage
insurance for a loan, or a request for modication
of such insurance, in a format we approve and
including the supporting information we require.
All supporting materials and other information
that are provided with the Application, in each
case as reected in our books and records, are
considered a part of the Application.
“Appropriate Proceedings” means actions or
proceedings appropriate to enforce or satisfy
the Borrower’s obligations under the terms of a
loan, which could include legal action to enforce
the terms of such loan, foreclosure proceedings,
eviction proceedings, preserving deciency
rights by making a bid at a foreclosure sale
and pursuing a deciency judgment in those
jurisdictions where it is customary to do so during
the foreclosure proceedings or as we may require,
acquiring title to the Property, or asserting your
interest in the Borrower’s bankruptcy proceeding.
“Automated Tool” means a system, process
or tool used by us or the initial Insured that
we have approved for use in underwriting
or validating a loan in accordance with the
requirements for such usage described in our
Underwriting Guidelines.
“Beneciary” means the initial Insured, except
that if the Beneciary sells, assigns, or transfers
a loan, the purchaser, assignee, or transferee
becomes the Beneciary with respect to the
related Certicate as provided in Section 50.
“Borrower” means any Person identied in
the loan documentation as legally obligated to
repay the debt obligation created by the loan,
including any co-signer or guarantor.
“Borrower’s Own Funds” means any funds saved
or earned by the Borrower and gifts from family
members to the Borrower where there is no
promise or expectation of repayment. Borrower’s
Own Funds does not include funds provided by
any Person associated with the Beneciary, Insured
or Servicer or who performed any acts related to
the Application or origination of the loan.
“Certicate” means either (i) a certicate issued
or transmitted to the initial Insured extending
insurance coverage under this Policy to a loan
and identifying the terms, conditions and
representations, in addition to any contained in
this Policy, and endorsements applicable to such
coverage, or (ii) a Commitment for which
coverage has been activated in accordance with
our Servicing Guide and this Policy.
“Certicate Effective Date” means the date on
which coverage under a Certicate becomes
effective, which shall be the closing date of the
loan or such later date that the Insured requests
and that we approve, in each case as reected in
our books and records.
“Claim” means a request for payment of an
Insurance Benet for a loan submitted in the
form and method stated in our Servicing Guide
and otherwise in accordance with this Policy.
“Claim Amount” means the amount used to
determine the Insurance Benet payable for a
Claim, calculated in accordance with Sections
70 and 71.
“Claim Settlement Period” means the 60 days
following the Perfected Claim Date, except as
described in Sections 67(e), 74(b) and 77(a) of
this Policy.
“Closing File” means the following documents,
as applicable, in hard copy or electronic form:
the nal closing disclosure or other settlement
statement signed by the Borrower; the signed
promissory note with all riders; the signed
mortgage or deed of trust with all riders; the
1
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
title insurance commitment and any other
closing documents or information that we would
otherwise review at the time of an Independent
Validation or Claim (e.g., information required to
satisfy underwriting or closing conditions that
we have not previously reviewed).
“Commitment” means a commitment issued or
transmitted, including in electronic form, to the
initial Insured identifying the terms, conditions
and representations, in addition to those
contained in this Policy, and endorsements
under which we will insure a loan. If we issue
more than one Commitment for a loan, the most
recent one is the Commitment under this Policy.
”Contract Rate” means the interest rate on the
loan, disregarding any penalty, fee or interest
rate increase due to a Default. For an approved
Workout, the Contract Rate is the interest rate
on the loan following such approved Workout.
“Core Claim Documents” means all of the
following, unless otherwise specied in the
Servicing Guide: (i) a completed Claim form and
all other information and supporting material
required by our Underwriting Guidelines in effect
on the Application date for information relating
to origination of the loan, and by the Servicing
Guide in effect on the date of Default for all
other required information; (ii) information
demonstrating that title has been acquired by the
Servicer, Beneciary or a third party, if applicable;
and, upon request, and if not already provided;
(iii) the Origination File; (iv) the Closing File;
and (v) the Servicing File.
“Credible Evidence” means any evidence that
reasonably would be viewed as reliable,
accurate and having a basis in fact, and can
be in the form of any information: (i) in the
Origination File, Closing File, or Servicing File;
or (ii) otherwise related to the loan, Borrower
or Property that was provided to us in any form
at any time by you or any Person, where the
information can be reasonably considered
accurate and related to the loan, Borrower or
Property. Statements not given under oath
by the Borrower are not considered Credible
Evidence unless they are corroborated by other
reliable evidence.
“Default” means the failure of the Borrower
to pay all amounts due in a regular monthly
payment period as specied in the loan
documents or, if you have exercised a due-on-
sale clause under the loan, all amounts due
under the loan, but excluding any non-monetary
default by the Borrower or a violation of any of
the other terms of the loan, even if the violation
would permit you to accelerate the debt or
foreclose or take other action to take ownership
of the security for the loan. A loan is deemed to
be in Default as of the close of business on the
day that the periodic payment or accelerated
payment is due, disregarding any payment grace
period. A loan is 30 days in Default if the full
payment is not received by the due date of the
next regular monthly payment and the Default
status advances by an additional 30 days for
each successive regular monthly payment that is
not paid in full by its due date.
“Defect” means a misstatement, misrepresenta-
tion, omission, or data inaccuracy in connection
with the origination or closing of a loan or the
Application, as we determine based on Credible
Evidence. The only remedy available for a
Defect (unless such Defect is a Signicant
Defect) is as described in Section 43(c).
“Deciency Expenses” means commercially
reasonable legal fees and court costs associated
with Appropriate Proceedings you conducted
to establish a deciency against the Borrower
and which are in addition to those incurred in
standard and customary foreclosure proceedings.
Deciency Expenses also include additional
interest that accrued on the loan, Property taxes,
insurance premiums, and Property preservation
expenses you paid during the period of
Appropriate Proceedings.
“Delegated Underwriting Requirements” means
the specic procedures and processes with which
the initial Insured must comply to be eligible
for, and maintain eligibility with, our delegated
underwriting program. We may change the
Delegated Underwriting Requirements at any
time by giving notice to the initial Insured or
posting the changes on our website.
2
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
“Environmental Impairment” means the
presence of:
Q
Any condition giving rise to liability under
the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. §
9601 et seq.) or similar applicable law;
Q
Any “Hazardous Waste” or “Regulated
Substance” as those terms are dened by the
Resource Conservation and Recovery Act (42
U.S.C. § 6901 et seq.) or any similar state or
local law where the Property is located, or
any hazardous waste, material, or other
substance or condition that renders the
principal residential structure on the
Property uninhabitable; or
Q
Any chemicals, materials or substances
dened as or included in the denition of
“hazardous substances,” “hazardous wastes,”
“hazardous materials,” “restricted hazardous
materials,” “extremely hazardous substances,”
“toxic substances,” “contaminants” or “pollut-
ants” or words of similar meaning and that
are regulated under any applicable law.
The presence of radon gas, lead paint, or
asbestos in the dwelling on a Property is
not an Environmental Impairment.
“Estimated Net Proceeds” means our reasonable
estimate of the gross proceeds of a sale of the
Property, assuming the Property were sold to a
third party for fair market value and assuming:
(i) in the case of Physical Damage, the Property
were in the condition it was in on the Commit-
ment date, Reasonable Wear and Tear excepted,
less our reasonable estimate of the costs of
obtaining and closing such assumed sale; and
(ii) in the case of Incomplete Construction,
construction of the Property was completed in
accordance with the approved plans and
specications and not suffering from any
Physical Damage.
“GSE” means the Federal National Mortgage
Association or the Federal Home Loan
Mortgage Corporation, as applicable, and
any successor thereto.
“GSE Beneciary” means a Beneciary that
is a GSE.
“Incomplete Construction” means a failure to
obtain a certicate of occupancy and to
complete construction, rehabilitation or
remodeling of a Property in accordance with
approved plans and specications in a good and
workmanlike manner, or as indicated in the
Original Value.
“Independent Validation” means the review
of a loan we conduct pre- or post-closing to
determine if early rescission relief under Section
17 applies. Independent Validation for the full
loan includes a review of the Application and
the Origination File (in whole or in part) to
conrm that a loan meets the applicable
Underwriting Guidelines and that there are no
Signicant Defects. If you do not qualify for the
Closing File submission exception (as specied
in our Rescission Relief Guide), Independent
Validation also includes a comparison of the
Closing File to the Application and Commitment.
A QC Review qualies as an Independent
Validation. In the case of early rescission relief
applicable only to Original Value, Independent
Validation means a review of the Property’s
Original Value and related materials required to
be submitted by our Rescission Relief Guide to
conrm that there are no Valuation Defects.
“Insurance Benet” means the portion of the
Claim Amount that we are contractually
obligated to pay you in respect of a Claim, as
determined under this Policy.
“Insured” means the Person named on the cover
page of this Policy. If the loan servicing is sold,
assigned or transferred, the Servicer of the loan
becomes the Insured unless we are notied
under Section 50 that the Beneciary elects
to become the Insured, in which case the
Beneciary will become the Insured with
respect to the related Certicate.
“Net Proceeds” means the gross proceeds the
Servicer or Beneciary receives from a Third-Party
Sale that we approved, less the reasonable costs
of obtaining and closing such Third-Party Sale.
“Original Value” means the value of a Property
represented in an Application which was
established by appraisal or alternative method
3
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
that we approve (as specied in our Underwriting
Guidelines) to determine value in accordance
with customary loan origination practices.
“Origination File” means all information, in hard
copy or electronic form, which you create, receive
or require in connection with the origination of
the loan. For example, the following documents,
as applicable, must be in the Origination File:
the Borrower’s signed loan application; loan
underwriting, processing and approval notes;
automated underwriting system ndings;
evidence or verication of employment, income,
assets, deposit, rent and other Borrower debts;
credit reports; appraisal or other evidence of the
Original Value; evidence of project approval for a
condominium or cooperative housing property;
and any other documents that are described in
our Underwriting Guidelines in effect as of the
Application date.
“Pattern Activity” means misstatements,
misrepresentations or omissions:
Q
involving three or more loans we insure that
were originated by the same initial Insured;
Q
made, with or without knowledge of the
initial Insured, in connection with the
origination or closing of the loans, or the
Applications, pursuant to a common pattern
or activity and that involve at least one party
common to all of the loans;
Q
that constitute Signicant Defects; and
Q
if the initial Insured is the common party,
involve the same individual, or if another
party is the common party, involve the same
individual or entity.
“Percentage Option” means the settlement of
a Claim as described in Section 73.
“Perfected Claim” has the meaning set forth in
Sections 66, 67 and 68.
“Perfected Claim Date” has the meaning set
forth in Sections 31(c), 66, 67, 68 or 92, as
applicable.
“Perfected Claim Information” means the Core
Claim Documents, any additional information
we may request pursuant to Section 67, and
access to the Property, if requested within the
time required for requests made prior to Claim
perfection in Section 68.
“Person” means any natural person, corporation,
partnership, limited liability company, trust,
association or other legally recognized entity.
“Physical Damage” means any injury, physical
damage or impairment to a Property that we
reasonably estimate to be in excess of the greater
of $5,000 or 2% of the Original Value, whether
caused by accident, natural disaster or otherwise,
including due to any of the following: physical
injury or destruction of tangible property;
demolition by any entity; defects in construction,
rehabilitation or remodeling; defects in materials;
infestation; land subsidence; earth movement
or slippage; earthquake; volcanic activity;
avalanche; ood, wind, hurricane, tornado;
wildre; any act of God; any event declared a
disaster by the Federal Emergency Management
Agency or other governmental agency; riot,
insurrection, terrorism, civil strife or war; or any
Environmental Impairment. The presence of
radon gas, lead paint, or asbestos in a dwelling
does not constitute Physical Damage.
“Policy” means this Master Policy document,
including Annex A to the extent applicable.
“Policy Documents” means the following:
1. Application;
2. Commitment;
3. Certicate;
4. Policy; and
5. Any applicable endorsements to this Policy.
“Property” means real property (with all
improvements, appurtenances, rights of access,
easements, rights of ownership and use of
common areas, recreational and other facilities,
and additions thereto) subject to the mortgage
or other instrument that secures a loan where
such real property is:
Q
a building designed for residential
occupancy by not more than four families;
Q
a one-family residential condominium or
unit in a planned unit development or a
cooperative housing unit;
4
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
Q
any other one-family residential unit as
to which good and marketable title
may be held or conveyed freely, including
manufactured housing and cooperative
housing units as approved in our
Underwriting Guidelines; or
Q
a mixed-use building, provided all of the
following are true:
Q
it includes a single, one-family dwelling
and only one non-residential use and the
mixed use is allowed under local zoning
requirements;
Q
the Borrower occupies that one-family
dwelling as a principal residence and is
the owner/operator of the business on the
property; and
Q
the property and neighborhood are
primarily residential.
“QC Review” means a quality control review
of an Application or an insured loan that we
conduct in accordance with our quality control
processes and procedures.
“Reasonable Wear and Tear” means typical
deterioration in a Property and its xtures
resulting from normal use, as distinct from
Physical Damage, examples of which include,
without limitation, carpet and oor wear due
to normal trafc, paint wear due to normal use,
and roof wear due to age.
“Rescission Relief Guide” means our guide or
the section of our Servicing Guide and/or
Underwriting Guidelines describing the loan
types or programs eligible, and documentation
and submission requirements for obtaining,
early rescission relief as set forth in Section
17(a). We may change the Rescission Relief
Guide at any time by notice to the initial
Insured or posting the changes on our website.
“Rescission Relief Provisions” means the
provisions of Section 17.
“Security” means, in the case of a cooperative
housing unit, the stock or membership
certicate evidencing an ownership interest
in an organization formed for the purpose of
cooperative ownership of real estate, together
with the proprietary lease or occupancy
agreement from such organization allowing
the Borrower exclusive occupancy and use of
the Property. References in this Policy to the
title, ownership, sale or conveyance of a Property
shall, in the case of a cooperative housing unit,
mean title to, ownership, sale or conveyance of
the Security related to such unit.
“Servicer” means, with respect to a loan, the
Insured or, if the Insured or Beneciary noties
us that a different entity is responsible for
servicing the loan, then such other entity.
“Servicing File” means all information, in hard
copy or electronic form, created, received,
required, transmitted, stored or preserved in
connection with servicing a loan by or on behalf
of each Servicer of the loan, including servicing
notes and records, the complete loan payment
history, records reecting the exercise of rights
by the Servicer under the loan documentation,
records relating to Physical Damage that affects
the Property, records relating to loan assumption
or Workouts, records relating to agreements with
a Borrower or a third party affecting the loan or
the Property, and records relating to loan repur-
chase or indemnication demands, if applicable.
“Servicing Guide” means collectively, our
guidelines and requirements relating to this
Policy for servicing loans, reporting Defaults,
paying premiums, cancelling and reinstating
coverage, Workouts, and submitting Claims and
other information to us, which includes a
description of eligible expense items for Claims.
Our guidelines and requirements are effective
when we issue them, including by posting them
on our website, unless we specify a later
effective date.
“Signicant Defect” means a Defect existing
on the Certicate Effective Date that is in any
respect material to our acceptance of the risk
or the hazard assumed under our Underwriting
Guidelines in effect when you submit the
Application, such that had we known of the
Defect we would not have insured the loan,
regardless of whether the Defect causes a
Default or contributes to the Claim Amount,
5
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
including for example: (i) the underwriting of
the Borrower’s creditworthiness and ability to
borrow funds or repay the loan or the Borrower’s
eligibility and qualication or the Borrower’s
identity; (ii) the underwriting criteria related to
the Property or project eligibility, the Property
appraisal or the physical or environmental
condition of the Property; (iii) loan terms and
criteria or any terms and criteria set forth in any
negotiated provision; (iv) a life-of-loan exclusion
in this Policy for which rescission is a remedy; (v)
requirements applicable to the closing and sale
of the loan; or (vi) the form and/or execution of
required loan and mortgage documents, without
which the loan would be ineligible for insurance
or the enforceability of the mortgage terms
would be limited.
“Single Loan Fraud” means we nd clear and
convincing evidence of, or a legal judgment or
other legally binding determination conrms, a
knowing misstatement, misrepresentation, or
omission by any Person in connection with the
origination or closing of a loan, or the Applica-
tion, that was intended to: (i) defraud any party
involved in the transaction; or (ii) obtain any
insurance, money, funds, credits, assets, securities,
or other properties from any party involved in
the transaction by means of fraudulent pretens-
es, representations, or promises. Single Loan
Fraud includes a Valuation Defect where there is
clear and convincing evidence that the appraiser
manipulated, inappropriately utilized or misrep-
resented information in producing the appraisal
report that established the Original Value.
“Third-Party Sale” means a sale of the Property:
(i) by the Borrower with the consent of the
Servicer prior to completion of Appropriate
Proceedings, or by the Servicer or Beneciary
after the acquisition of Borrower’s title to the
Property through Appropriate Proceedings; (ii) in
the case of a GSE Beneciary, by the Borrower
with the consent of the GSE Beneciary prior to
completion of Appropriate Proceedings, or by
the Servicer (with the consent of the GSE
Beneciary) or the GSE Beneciary after the
acquisition of Borrower’s title to the Property
through Appropriate Proceedings; and (iii) a
foreclosure or trustee’s sale of the Property to a
third party at a price no less than the minimum
required to be bid as set forth in Section 59.
“Third-Party Sale Option” means the settlement
of a Claim as described in Section 74.
“Total Loss” means (i) the Claim Amount plus
Advances (if not otherwise included in the Claim
Amount) paid as of the date of the foreclosure,
Workout or Third-Party Sale, as applicable,
minus (ii) any Net Proceeds.
“Underwriting Guidelines” means the
denitions, criteria, methods, calculations,
guidelines, documentation and other
requirements we use to determine if a loan is
eligible for insurance under this Policy, as such
requirements are issued or published in our
underwriting guides, bulletins, premium rate
cards or as we otherwise communicate to the
initial Insured. Our Underwriting Guidelines are
effective when we issue them, including by
posting them on our website, unless otherwise
specied. Our records maintained in good faith
will be conclusive regarding the Underwriting
Guidelines in effect at any particular time.
“Valuation Defect” means (i) a percentage
variance of 15% or more between the Original
Value and the opinion of market value for the
subject Property as determined by a licensed
appraiser in an appraisal report prepared at
our request as of the date of the Original Value
in compliance with industry standard appraisal
practices, or another generally accepted industry
standard for retrospective valuation, and (ii)
the loan-to-value ratio calculated as of the
Certicate Effective Date using the retrospective
value did not meet our Underwriting Guidelines
applicable to the loan. The percentage variance
is the quotient determined by dividing the
difference between the two values by the
Original Value, expressed as a percentage.
A Valuation Defect is a Signicant Defect.
“We,” “us” or “our” means the insurer, National
Mortgage Insurance Corporation, an authorized
mortgage guaranty insurance company, and its
successors and assigns.
6
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
“Workout” means a deed-in-lieu of foreclosure,
a Third-Party Sale by the Borrower or any
forbearance, modied repayment plan, or other
modication of a loan.
“You” or “your” means the Insured and the
Servicer, unless specied otherwise in any
section of this Policy to mean only one of
those parties.
2 SCOPE OF THIS POLICY AND
OUR AGREEMENT
3 Duration of coverage
a. This Policy applies to all Commitments and
Certicates issued under the Policy on or
after the effective date of the Policy. This
Policy will remain in effect until it is
cancelled. This Policy may be cancelled by
the initial Insured or by us for any reason or
no reason upon 10 days’ prior notice or as
otherwise required by applicable law. If this
Policy is cancelled, the Policy will remain
in effect with respect to any Commitment
or Certicate issued before cancellation,
provided that all required premiums are paid.
b. Provided that all required premiums are paid,
coverage for a loan under this Policy is
extended by its Certicate issued or
electronically recorded in our system of
record and will continue until whichever
occurs rst:
i. the loan insured under the Certicate is
paid in full;
ii. we settle (or deny) a Claim with respect
to the Certicate;
iii. we act upon your instruction to cancel
coverage under the Certicate;
iv. the term of coverage expires under
the premium plan or upon the terms
specied in the Certicate; or
v. we cancel or rescind coverage under
the Certicate.
c. We may stop issuing new Commitments and
Certicates at any time without providing
notice to you.
4 Documents that constitute our agreement
a. The Policy Documents constitute the entire
agreement between you and us for coverage
under a Certicate. If any terms conict, the
terms of this Policy, as modied by any
applicable endorsements, will govern. If any
terms of the Policy Documents conict with
our Rescission Relief Guide, Servicing Guide
or Underwriting Guidelines, the terms of the
Policy Documents will govern.
b. We have the right to amend the terms of any
Policy Documents, except Certicates already
issued. If we do, we will notify the initial
Insured before the amendment takes effect.
Any changes will apply only to Commitments
(and related Certicates) issued after such
notice has been given and after the
amendment effective date. We are not
obligated to notify any Borrower of any
changes to the Policy Documents.
c. No portion of any Policy Document will
be waived or modied without our
prior approval.
d. We are not bound by the terms of any
agreement between the Insured and any
other Person.
e. The initial Insured agrees, and by becoming
a Beneciary or a Servicer, any Beneciary or
Servicer agrees, that this Policy may not
be used to establish the meaning of any
provision of any other insurance policies we
have issued, nor may any provision of any
other insurance policies we have issued be
used to establish the meaning of any
provision of this Policy.
5 Governing law; severability;
jury waiver; successors and assigns
a. Governing Law
This Policy will be governed, interpreted, and
enforced by and in accordance with the laws
of the State of Delaware, without regard to
conict-of-law principles or to the location
of any Property. If the law of any jurisdiction
where this Policy was issued does not permit
Delaware law to govern policies issued in
7
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
such jurisdiction, then the law of such other
jurisdiction shall govern instead of the laws
of Delaware. If a conict exists between a
Policy provision and the minimum require-
ments of the governing law, the provision
will be deemed to be amended to comply
with such minimum requirements.
b. Severability
Each of the conditions and requirements
of this Policy is severable, and a waiver,
modication or compromise of one will
not be construed as a waiver, modication
or compromise of any other condition
or requirement.
c. Jury Waiver
THE PARTIES AND ANY SUBSEQUENT INSURED,
SERVICER, AND/OR BENEFICIARY HEREBY WAIVE
ALL RIGHTS TO A JURY TRIAL OF ANY MATTERS,
DISPUTES, OR LEGAL ACTIONS OR PROCEED-
INGS ARISING OUT OF OR RELATING TO THIS
POLICY OR THE POLICY DOCUMENTS. THIS
WAIVER IS INTENDED TO APPLY TO ANY AND
ALL MATTERS THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS POLICY. THE PARTIES AND
ANY SUBSEQUENT INSURED, SERVICER, AND/OR
BENEFICIARY FURTHER REPRESENT THAT THEY
HAD AN OPPORTUNITY TO REVIEW THIS JURY
WAIVER WITH THEIR OWN LEGAL COUNSEL
PRIOR TO CONTRACTING FOR MORTGAGE
INSURANCE OR INVESTING IN OR AGREEING TO
SERVICE AN INSURED LOAN, AND THAT THIS
WAIVER IS KNOWING AND VOLUNTARY.
d. Successors and Assigns
This Policy shall be binding upon and shall
inure to the benet of the parties hereto and
their respective successors and assigns.
6 COMMUNICATIONS REGARDING
THIS POLICY
7 Communications
a. Unless otherwise required by applicable law,
all communications required or permitted by
this Policy may be given in any manner and
format approved for such communications in
our Rescission Relief Guide, Servicing Guide
or Underwriting Guidelines, as applicable.
b. We may provide certain notices to Borrowers
in accordance with applicable law and copies
of notices to a GSE Beneciary if it requests.
c. Any notice we are required to give will be
considered given to you upon the earlier
of ve days after it is given or your actual
receipt of the notice. If our address changes,
we will notify you.
d. All Claims and other communications from
you under this Policy must be in writing and
delivered in the manner and to the location
stated in our Rescission Relief Guide, Servic-
ing Guide or Underwriting Guidelines, as
applicable. Any requirement in this Policy
that information or documentation be
submitted to us will be deemed submitted
on the date we receive it. If we receive
a communication that we believe to be
genuine and given by an authorized Person,
we will be entitled to rely on it and will not
be liable for relying on it.
8 Providing loan information
to GSE Beneficiaries
At the request of a GSE Beneciary, we will
provide reasonably accessible information
about any loan insured under this Policy. The
Insured waives any right to object if we provide
this information about the loan directly to the
GSE Beneciary.
Getting started
9 Delegated vs. non-delegated underwriting
a. Under this Policy, we are responsible for
underwriting the Application for compliance
with our Underwriting Guidelines, unless
it is submitted under our delegated
underwriting program.
b. If we have approved the initial Insured to
submit Applications under our delegated
underwriting program, the initial Insured
is responsible for underwriting loans for
8
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
compliance with our Underwriting Guidelines
in accordance with the processes and
procedures specied in the Delegated
Underwriting Requirements, each as in effect
when it submits an Application. We may
terminate, suspend or limit the initial Insured’s
participation in our delegated underwriting
program by giving notice as provided in our
Delegated Underwriting Requirements.
c. Termination of the initial Insured’s
participation in our delegated underwriting
program will not cancel the Policy or affect
Commitments or Certicates issued before
the termination date. However, if we
suspend, terminate or limit an initial
Insured’s participation in our delegated
underwriting program for cause, we may
cancel any Commitment for which coverage
has not yet been activated and converted to
a Certicate as set forth in Section 14(c).
10 Applying for coverage
For each loan you wish to insure under this
Policy, you must complete and submit an
Application to us. A loan is eligible for coverage
under this Policy if it meets our Underwriting
Guidelines on the date the Application is
submitted and does not present any of the
exclusions listed in Sections 18 through 40.
11 Your responsibilities for each Application
a. You are responsible for collecting, evaluating
and verifying the accuracy of the information
you provide to us in any form or format,
regardless of who gave you the information or
how you obtained it. This includes information
in the Application, Origination File, Closing
File, and any related materials. In the case of
information obtained from an Automated Tool,
you must comply with requirements for using
such Automated Tool as specied in our
Underwriting Guidelines, and you are required
to update the Application with any informa-
tion you have that either veries or conicts
with the Automated Tool output. In addition,
if you discover prior to activation of coverage
that any information you previously provided
to us has become untrue or incomplete, you
are required to submit updated true, complete
and veried information.
b. In addition, you are responsible for
underwriting and satisfying all applicable
conditions for the loan in compliance with
applicable law and our Underwriting
Guidelines in effect when you submit
the Application.
c. For non-delegated underwriting, you must
submit the Application and the Origination
File to us for review, although we may elect
to provide coverage based on the Application
and any supporting information submitted to
us, provided that we may request additional
information before issuing a Commitment.
d. For delegated underwriting, you must
submit an Application and any additional
information required by the Delegated
Underwriting Requirements.
12 Representations by the Insured
a. By submitting an Application to us, the initial
Insured represents that:
i. the Application is true and complete in
all material respects;
ii. for Applications submitted under our
delegated underwriting program, the
loan meets our Underwriting Guidelines
in all material respects;
iii. no information contained in or submitted
in support of the Application was false or
misleading when provided; and
iv. the Application does not omit any
information that would make any other
information provided untrue, inaccurate
or incomplete, or that would have made
the loan ineligible for insurance or for
coverage at the premium rate offered.
b. The representations made throughout this
Policy will be binding on all subsequent
Insureds and Beneciaries, regardless of
whether the subsequent Insured or Beneciary
knew or should have known that the repre-
sentation was false or materially inaccurate.
9
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
c. You acknowledge and agree that we rely on
the information provided by any Person in
connection with an Application to decide
whether to offer or continue coverage and
that we are not obligated to independently
verify the information. Our reliance on the
information continues after we issue a
Commitment or Certicate. You accept the
risk of any Signicant Defect or material
misrepresentation or material omission in
any information provided to us by any Person
in connection with an Application.
d. By initiating activation of coverage under a
Certicate, you represent that, as of the
Certicate Effective Date:
i. all conditions in our Commitment
were satised;
ii. the Borrower’s Own Funds were used
to make the down payment required for
the loan; and
iii. all of the representations that the initial
Insured made at the time it submitted the
Application are still true and complete.
e. By ling a Claim, you represent that the
Claim and all related materials are true and
complete and that all conditions precedent
to ling the Claim have been met.
13 APPROVED AND DECLINED
APPLICATIONS; AUDITING PROCEDURES
14 Commitments or declined Applications
a. We will decide whether to approve or decline
Applications.
b. If we approve an Application, we will issue a
Commitment. We will notify you if we decline
an Application. If you then decline the
prospective Borrower’s loan application, we
have no responsibility to notify the
prospective Borrower that we have declined
the Application.
c. When the Commitment is activated in
accordance with the instructions in the
Commitment or in our Servicing Guide, it
converts to a Certicate.
d. In the case of a delegated underwritten loan,
we will issue a Commitment or Certicate
extending coverage to such loan subject to
the terms of this Policy following our receipt
of the Application. We are not obligated to
review the Application or to conrm that the
related loan complies with our Underwriting
Guidelines then in effect prior to issuing a
Commitment or Certicate. However, we may
decline to issue a Commitment or Certicate
if the Application shows that the loan does
not meet the applicable Underwriting
Guidelines then in effect.
e. If you submit Applications from multiple
ofces, we may decline to accept Applications
from one or more ofces after notication
to you.
15 Monitoring of loan manufacturing process;
auditing procedures
a. Monitoring. Once we issue this Policy to the
initial Insured, we may periodically monitor
and provide feedback related to the initial
Insured’s loan manufacturing processes,
quality control processes, underwriting
results, nancial condition and other factors
we consider appropriate to evaluate the
initial Insured’s continued qualication to
remain a Policy holder and if the initial
Insured has been approved for our delegated
underwriting program, continued qualica-
tion to participate in the program.
b. Audits. We may also periodically audit your
records, books and accounts relating to
insured loans, including periodic loan
submissions on an ongoing basis. Our audits
may include a review of the Origination File,
Closing File and Servicing File of the loan for
compliance with the terms of this Policy, our
Underwriting Guidelines, Servicing Guide and
Delegated Underwriting Requirements, if
applicable. We will provide a report of the
results of our audit to the initial Insured and/
or the Servicer as we determine appropriate.
c. Retaining records. You must retain the
complete original or a complete copy of the
Origination File, Closing File and Servicing
10
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
File pertaining to each insured loan until the
latest of:
i. two years after settlement of a Claim
or the date the Certicate is no longer
in force;
ii. the period required by your records
retention policy;
iii. the period required by applicable
law; and
iv. one year following the last date on
which you are permitted to commence
an action against us arising out of
this Policy
d. Provision of information. Subject to Sections
17(h) and 67(a), the Beneciary and Servicer
must cooperate with us and provide us with
all reasonable information that we request
regarding any loan(s) we insure, whether or
not in Default, including access to or a true
and complete copy of the Origination File,
the Closing File and the Servicing File and
such other information as we may determine
is related to loans insured under this Policy.
Such information shall be provided no later
than 30 days after our request for such
information. If such information is not
provided within such 30-day period, we
will provide a second request therefor, which
must be complied with no later than 30
days after such second request.
e. Access to information. The Beneciary and
Servicer must cooperate with us and provide
us and our representatives, at any time upon
at least 30 days’ advance written notice,
access during normal business hours to the
premises of the Servicer or Beneciary or
any other Person or place where Origination
Files, Closing Files and/or Servicing Files
are located and access to the information
prepared or maintained by, or in the posses-
sion or under the control of, the Insured,
Servicer or Beneciary and their agents
pertaining to loans insured under this Policy
for purposes of conducting audits, complying
with our legal and regulatory obligations,
and ensuring compliance with the terms and
conditions of this Policy. If such access is not
provided as required above, we will provide
a second request therefor, which must be
complied with no later than 30 days after
such second request. Failure to comply with
our second request will permit us to cancel
coverage as described in Section 23(e).
Exclusions, other remedies
and rescission limitations
16 Exclusions and other remedies generally
a. We may exercise the remedies described
in Sections 18 through 40 (i.e., rescission,
cancellation, Claim denial, curtailment or
reduction of a Claim Amount or Insurance
Benet) if any of the exclusions listed in
such Sections occurs or exists relative to
the Commitment, Certicate, loan, Property
or Claim.
b. We will notify the Servicer when we exercise
the remedy, and our notication will identify
the affected Commitment or Certicate
and state the reason(s) for the action. The
inclusion or omission of a reason in any such
notice will not limit our right to exercise any
other remedy available to us or limit our
other rights and remedies stated elsewhere
in this Policy.
c. If we rescind coverage under a Certicate,
the rescission will be retroactive to the
Certicate Effective Date, and we will refund
all premium paid on the Certicate in
accordance with our Servicing Guide. Our
right to rescind coverage under a Certicate
is subject to the provisions of Section 17.
d. If we cancel coverage under a Certicate or
deny a Claim, we will refund premium paid
for the period following the event that
resulted in the cancellation or denial.
e. The Rescission Relief Provisions will not limit
our rights under Sections 18 through 40
except as stated in Sections 25, 35 and 36.
f. You have the right to appeal our decision as
described in Section 91.
11
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
17 Limitations on our right to
rescind coverage
a. Early rescission relief program.
i. If you are eligible and opt to participate in
our early rescission relief program, and if
you follow the procedures and document
delivery requirements stated in our
Rescission Relief Guide, we will conduct
an Independent Validation on those loans
that qualify for review under our early
rescission relief program in accordance
with our Rescission Relief Guide.
ii. If we uncover discrepancies, errors
or any other questionable data or other
information that we determine in our
reasonable judgment needs to be
re-veried, we may request additional
information. If the additional informa-
tion does not resolve the discrepancy,
error or questionable data, we will
conduct such additional independent
re-verication for compliance with our
Underwriting Guidelines.
iii. We will promptly notify you as specied
in our Rescission Relief Guide when we
complete the Independent Validation on
a loan whether such loan qualies for full
rescission relief or for rescission relief for
Valuation Defects only, as applicable.
iv. If we are unable to make a determi-
nation or complete the Independent
Validation for a loan to our reasonable
satisfaction within 180 days because you
failed to provide the required informa-
tion in accordance with our Rescission
Relief Guide, such loan will not qualify
for early rescission relief. Instead, the
rescission relief terms for loans that
have not been subject to Independent
Validation will apply.
b. General limitation on our right to rescind
coverage. We will not rescind coverage under
a Certicate if the circumstances described in
paragraphs (c) through (g) of this Section 17
apply. However, paragraphs (c) through (g)
will not limit our right to rescind coverage,
or exercise our other remedies, under the
circumstances described in Sections 18
through 40 unless expressly stated
otherwise in such Sections.
c. Absence of Signicant Defect following
Independent Validation.
i. If we have completed an Independent
Validation and have not identied
Credible Evidence of a Signicant
Defect with respect to a loan, we
will not rescind coverage under the
Certicate on account of a Signicant
Defect (whether or not the loan is in
Default), effective upon our notication
to you regarding the outcome of the
Independent Validation.
ii. If you qualify for the closing document
exception set forth in our Rescission
Relief Guide, and you did not submit
the Closing File for the Independent
Validation of a loan, the rescission
relief under Section 17(c)(i) will not be
effective unless the Borrower has made
the rst 12 loan payments on time from
the Borrower’s Own Funds.
iii. If you have submitted only the required
documents and information relating to
an Independent Validation of Original
Value and we have not identied
Credible Evidence of a Valuation Defect,
then we will not rescind coverage under
the Certicate on account of a Valuation
Defect (whether or not the loan is in
Default), effective upon our notication
to you regarding the outcome of the
Independent Validation.
iv. If our notice of the outcome of an
Independent Validation indicates that
we were unable to resolve concerns
regarding the Borrower’s occupancy of a
Property, then the rescission relief under
Section 17(c)(i) will be effective with
respect to a Signicant Defect relating
to Borrower’s occupancy of the Property
only if the Borrower has made the rst
12 loan payments on time from the
Borrower’s Own Funds and we have not
previously notied you of a Signicant
Defect relating to occupancy.
12
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
d. 36-month limitation. With respect to a loan
that has not qualied for rescission relief
under Sections 17(c) or 17(f), effective as
of the date that is 36 months after the
Borrower’s rst payment due date, we will
not rescind coverage under the Certicate on
account of a Signicant Defect if all of the
following conditions are met as of such date:
i. we have not discovered any Credible
Evidence of a Signicant Defect;
ii. the loan is then not in Default by more
than 30 days;
iii. no more than two payments on the loan
have been in Default for more than
30 days;
iv. no single payment on the loan has been
in Default for more than 60 days;
v. all payments on the loan have been
made with the Borrower’s Own Funds;
and
vi. the loan has not been subject to a
Workout, other than a Workout entered
into as a result of a natural disaster that
caused the related Default.
e. 60-month limitation. With respect to a loan
that has not qualied for rescission relief
under Section 17(c), 17(d) or 17(f), we will not
rescind coverage under the Certicate on
account of a Signicant Defect on or after the
due date of the 60th payment if both of the
following conditions are met:
i. either the loan is not in Default, or if
the loan is in Default, it subsequently
becomes current; and
ii. all payments due on the loan have been
made with the Borrower’s Own Funds.
f. Automated Tools. We will not rescind coverage
under a Certicate on account of a Signicant
Defect based on inaccurate results obtained
from an Automated Tool that was identied
in our Underwriting Guidelines in effect
at the time it was used (or if we cannot
reasonably determine when it was used, then
on the Application Date) as approved for use
in underwriting loans if all of the following
conditions are met:
i. on or before the Certicate Effective Date
you did not obtain any information that
conicts with or invalidates the results
obtained from the Automated Tool, or if
you did obtain conicting information,
you provided such additional information
to us by such date;
ii. the information you provided in the
Application accurately reected the
results obtained from the Automated
Tool; and
iii. use of the Automated Tool was in
compliance with the requirements for
use of such Automated Tool as specied
in our Underwriting Guidelines.
g. Single Loan Fraud by Borrower. We will not
rescind coverage under a Certicate for
Single Loan Fraud by a Borrower if any of
the following conditions is met:
i. we completed an Independent Validation
that identied no Credible Evidence of
a Signicant Defect and the Borrower
has timely made the rst 12 consecutive
monthly payments on the loan with
Borrower’s Own Funds;
ii. we completed or updated an Independent
Validation at least 12 months follow-
ing the Certicate Effective Date that
did not identify Credible Evidence of any
Signicant Defects, without regard to
the Default status of the loan before we
completed the Independent Validation; or
iii. the conditions described in paragraphs (d)
or (e) of this Section 17 apply to the loan.
h. Additional document requests.
i. After the conditions for rescission relief
described in Section 17(c)(iii) have been
met relating to Original Value, we will
not request additional information from
the Insured to investigate a potential
Valuation Defect.
ii. After the conditions for rescission relief
have been met for a loan, we will not
request additional information from
the Insured to investigate a potential
Signicant Defect related to such loan.
13
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
If we become aware of Credible Evidence
that an exclusion not limited by the
Rescission Relief Provisions may apply,
we may request additional information
from the Insured to investigate such
potential exclusion. If the Credible
Evidence relates to Pattern Activity, our
request for information may relate to such
loan and/or other loans originated by the
same initial Insured and involving at least
one Person common to all the loans.
iii. We will not rescind coverage under a
Certicate under Section 23(e) based
solely on the Insured’s failure to produce
the requested information unless
such information is required by our
Underwriting Guidelines or Servicing
Guide. However, we retain our rights
to request information that is required
under this Policy in connection with an
Insured’s ling of a Claim and our ability
to pursue any remedies available under
this Policy for the Insured’s failure to
produce such les or documents.
i. Rescission relief following a Workout or
renance. To the extent a loan qualies for
rescission relief under this Policy:
i. such loan will continue to qualify for
such relief following any Workout we
approve; and
ii. the rescission relief will apply to any
modication of coverage under a
Certicate effected in connection with
a renance of the loan insured under
such Certicate.
14
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
Other Exclusions
18 Data inaccuracies a. We may rescind coverage under one or more of the affected Certicates
if any inaccurate data was submitted by or on behalf of the initial
Insured in the Applications, if and to the extent such data inaccuracies:
i. involve ve or more loans insured by us and originated by the same
initial Insured; and
i. involve the same delivery data element(s); and
ii. differ from the information in the initial Insured or Insured’s loan
les used as the basis for the Application; and
iv. we determine that, had the information from the loan les been
used to qualify the loans, such loans either: (A) would have been
ineligible for insurance under this Policy; or (B) would have been
eligible for insurance, but only under different terms or pricing.
b. The only data inaccuracies covered by this Section 18 are those that
occur as a result of an operational or system issue involving the
electronic transmission of data to us.
19 Default that occurred
before coverage began
or after coverage ended
If the Default with respect to a loan occurred:
i. before the Certicate Effective Date, we may rescind coverage;
ii. after the Certicate is cancelled for any reason by you or us, including
because of a lapse for failure to pay premium, we will notify you that
coverage is no longer valid and the Claim cannot be accepted.
20 Defects other than
Signicant Defects
If the Servicer fails to pay the additional premium required by Section 43(c)
within the time required by such Section, we may rescind coverage under
the Certicate.
21 Excess Insurance Benet a. If the Claim Amount exceeds the amount of consideration that the
Beneciary paid to acquire the loan, we may reduce the Claim Amount
by the amount of such excess.
b. This Section 21 does not apply to a GSE Beneciary.
22 Failure to comply
with applicable law
a. We may rescind coverage under a Certicate if the Insured failed to
comply with applicable law and if:
i. we expect such failure to impair the ability to enforce the loan
documents; or
15
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
22 Failure to comply
with applicable law
(cont.)
ii. a court or regulatory body nds, or we reasonably believe based on
Credible Evidence, that the initial Insured’s origination of the loan
violated one or more laws or regulations relating to the insurability
of the loan.
b. We may cancel or rescind coverage under a Certicate if we reasonably
believe based on Credible Evidence that the loan violates a law
or regulation.
c. We may cancel coverage under a Certicate or deny a Claim resulting
from the Insured’s failure to comply with applicable law if we
reasonably expect such failure to materially increase the Insurance
Benet payable by us over what it would have been had the failure not
occurred.
d. We may reduce the Claim Amount if we reasonably determine that a
failure to comply with applicable law materially increased the Insurance
Benet payable over what it would be in the absence of such failure.
23 Failure to comply
with conditions and
Insured’s obligations
a. If the Servicer fails to comply with any of its post-origination obligations
under this Policy in any material respect (including, but not limited to,
its obligations to mitigate loss, obtain our approval of a Workout, or
diligently pursue and complete Appropriate Proceedings), we may reduce
the Claim Amount, in accordance with the curtailment procedures stated
in our then current Servicing Guide, by the amount we reasonably
determine is the estimated resulting damage (as described below).
b. We may cancel coverage under the Certicate, effective as of the date
the non-compliance rst occurred (or in the case of a Claim, effective as
of the Default date) or deny a Claim, if:
i. we cannot reasonably estimate the damage arising from such
noncompliance and we reasonably determine such noncompliance
is material either to our continued acceptance of the risk or the
hazard assumed; or
ii. we determine that such noncompliance was the principal cause of
the Default that results in a Claim; or
iii. with respect to the Servicer’s reporting obligations or its obligation to
start or diligently pursue Appropriate Proceedings, such noncompli-
ance continues for a period of 12 months, unless the Servicer is
prevented from complying with such obligations by a government or
judicially imposed moratorium of general applicability to a specic
jurisdiction and not as a result of the Servicer voluntarily conforming
to such a moratorium without a legal obligation to do so.
16
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
23 Failure to comply with
conditions and Insured’s
obligations (cont.)
c. If you fail to timely start Appropriate Proceedings as set forth in Section
57, the “estimated resulting damage” is the amount of any accrued and
unpaid interest and Advances actually paid by the Servicer or Beneciary
during the period beginning on the date that Appropriate Proceedings
should have been commenced through the date such Appropriate
Proceedings are actually commenced, together with any other damages
that we reasonably estimate.
d. If a Third-Party Sale closes without our prior approval, we may reduce
the Claim Amount as described in Section 74.
e. If you fail to provide the required information or access within 30 days
following our second request as provided in Sections 15(d) or (e), we
may cancel coverage under the Certicate(s) for the affected loan(s)
effective as of the date of such second request. If a Claim on any such
loan has been submitted, we may deny the Claim.
f. If you fail to maintain the required records or information under
Sections 15(c) or (d), then, depending upon the circumstances as
specied in our Servicing Guide, we may cancel or rescind coverage
under the Certicate(s) for the affected loan(s). If a Claim on any such
loan has been submitted, we may deny the Claim.
g. If you fail to notify us of a Signicant Defect, Single Loan Fraud or
Pattern Activity or a repurchase request with respect to a loan within
30 days as required under Section 47, we may cancel or rescind coverage
under the Certicate(s) for the affected loan(s). If a Claim on any such
loan has been submitted, we may deny the Claim.
h. We may cancel coverage under a Certicate for a loan or deny a Claim
if we discover that the Insured, Servicer or Beneciary has materially
misrepresented or falsied any information presented to us in
connection with a loan after the Certicate Effective Date.
24 Failure to make
balloon payment
We may deny a Claim if:
a. The Default is related to the Borrower’s failure to make a balloon
payment when due; and
b. You did not offer the Borrower a renewal, renancing or extension of
the loan at current market rates before the balloon payment was due.
25 Failure to satisfy
Commitment conditions
a. If any condition to coverage specied in the Commitment for a loan
is not satised within the time specied in the Commitment, we may
rescind coverage under the Certicate.
b. We cannot rescind pursuant to this Section 25 if the Rescission Relief
Provisions apply with respect to the applicable loan.
17
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
26 First lien status If the security instrument did not constitute a rst lien on the Property on
the Certicate Effective Date, we may rescind coverage under the Certicate.
27 Incomplete Construction a. If the principal cause of the Default giving rise to a Claim is Incomplete
Construction, we may deny the Claim.
b. Incomplete Construction will be deemed to be the principal cause of the
Default if the Default was caused by any reason other than a Borrower
credit-related event (e.g., a failure of any builder, contractor, or trade to
complete construction of the Property in a good and workmanlike
manner and in accordance with the agreed plans and specications;
mismanagement of construction draws; or disputes between the builder,
contractor, or trade and the Borrower).
c. If Incomplete Construction was not the principal cause of the Default
giving rise to a Claim, we may reduce the Claim Amount as described in
Section 78.
28 Loan acquired by
natural person
If the Insured or Beneciary of a loan, at any time, is or was a natural,
individual person (i.e., not an entity), we may cancel coverage under the
Certicate for such loan as of the date such Insured or Beneciary acquired
the loan, or if a Claim has been submitted, we may deny the Claim.
29 Non-residential property a. If the property securing the loan did not meet the denition of Property
on the Certicate Effective Date, we may rescind coverage under
the Certicate.
b. If the property met the denition of Property on the Certicate Effective
Date but not when the Claim was led, we may exercise one of the
following remedies if we reasonably determine the change adversely
affected the use, marketability or value of the property:
i. a requirement that you restore the Property to a condition no worse
than its condition on the Commitment date, Reasonable Wear and
Tear excepted;
ii. reduction of the Insurance Benet by the amount that we determine
approximates the estimated restoration cost in accordance with the
curtailment procedures stated in our then current Servicing Guide;
iii. if the property is not restored and we cannot reasonably estimate
the restoration cost, we may settle the Claim using the Anticipated
Loss Option; or
iv. if the property is not restored to a condition no worse than its condi-
tion on the Commitment date, Reasonable Wear and Tear excepted,
and we reasonably determine that no Insurance Benet would be
payable if the restoration were completed, we may deny the Claim.
18
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
30 Pattern Activity If we discover any Pattern Activity with respect to loans we insure, we may
rescind coverage under the Certicate on one or more of the affected loans.
31 Physical Damage as
principal cause of Default
a. If the principal cause of the Default giving rise to a Claim is Physical
Damage that occurred or manifested itself on or after the date we
issued a Commitment, we may deny the Claim.
b. Physical Damage will be deemed to be the principal cause of the
Default if all of the following are true:
i. as of the Claim submission date, the Borrower has not restored the
Property to a condition no worse than its condition on the
Commitment date, Reasonable Wear and Tear excepted;
ii. either (1) the Property lacked hazard insurance covering loss arising
out of the Physical Damage, or the proceeds or amount of the hazard
insurance coverage were insufcient to restore the Property to a
condition no worse than its condition on the Commitment date,
Reasonable Wear and Tear excepted, or (2) the Property had sufcient
hazard insurance covering loss arising out of the Physical Damage,
but the Borrower or Servicer (x) did not submit a claim, (y) submitted
a claim but has not received the proceeds of the claim or (z) received
the proceeds of the claim but the proceeds were not applied to
restore the Property;
iii. we reasonably estimate the restoration costs will exceed 20% of the
Original Value, Reasonable Wear and Tear excepted; and
iv. the Default occurred after the Physical Damage occurred or
manifested itself.
c. If we notify you that we intend to deny a Claim pursuant to this Section
31 and within 60 days thereafter you notify us that you intend to restore
the Property to a condition no worse than its condition on the Commit-
ment date, Reasonable Wear and Tear excepted, then we will not deny
the Claim if you complete the restoration within 180 days after you
notify us of your intention to restore the Property. We will extend the
time to complete restoration to one year after you notied us of your
intention to restore the Property if prior to expiration of the 180-day
period you provide evidence reasonably satisfactory to us that restora-
tion is in progress (such evidence may be a signed statement of work
to perform the restoration of the subject Property). If the Property is
restored within the applicable period, the Perfected Claim Date will be
the later of (1) the date that we receive evidence that the restoration
has been completed and (2) the date that would otherwise be the
Perfected Claim Date in accordance with Sections 66, 67, 68 or 92, as
applicable, and we will then settle the Claim under the option we
choose. No interest or Advances will be payable for the period between
19
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
31 Physical Damage as
principal cause of Default
(cont.)
when we notify you of our intention to deny the Claim and when you
notify us that the restoration has been completed, regardless of which
Claim settlement option we choose. If the restoration period is not
extended because you do not provide satisfactory evidence that
restoration is in progress within the 180-day period, or if the restoration
period is extended but the Property is not restored within one year after
you notied us of your intention to restore the Property, we may deny
the Claim.
d. If you are restoring the Property pursuant to Section 31(c) and a
Third-Party Sale occurs, the restoration must be completed within the
applicable time period set forth in Section 31(c), and the Perfected
Claim Date will be the date we receive satisfactory evidence that the
restoration was completed.
32 Physical Damage that is
not the principal cause
of Default
If Physical Damage was not the principal cause of the Default giving rise
to a Claim, we may reduce the Claim Amount as described in Section 77.
33 Pre-existing
Environmental
Impairment
We may rescind coverage under a Certicate if an Environmental
Impairment:
a. Existed before the Commitment date;
b. Was not disclosed on the Application, whether or not known by the
initial Insured; and
c. If known by us, would have resulted in our declining to insure the loan.
34 Release of indebtedness a. If the Borrower is no longer obligated to repay all or any portion of the
loan (other than as a result of a Workout we approved and requisite
premiums continue to be paid in accordance with our Servicing Guide),
we will exclude that amount from the unpaid principal balance in
determining the Claim Amount.
b. If the loan is divided into secured and unsecured portions in bankruptcy
proceedings, and you have continued to pay the premium for the full
loan amount, we will not exclude any portion of the Claim pursuant to
paragraph (a) above.
35 Signicant Defect a. If we have Credible Evidence of a Signicant Defect with respect to a
loan, we may rescind coverage under the applicable Certicate or offer
an alternative to rescission as described in our Rescission Relief Guide.
We will decide whether a Defect is a Signicant Defect.
20
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
35 Signicant Defect
(cont.)
b. If our non-delegated underwriting process (or, with respect to loans
participating in our early rescission relief program under Section 17(a),
our Independent Validation process) reveals that, despite accurate
information provided to us, we failed to identify a Signicant Defect
that should have been apparent to a qualied mortgage insurance
underwriter and we erroneously insured a loan, we will not rescind
coverage under the Certicate on the basis of that Signicant Defect.
c. The Rescission Relief Provisions apply with respect to a Signicant Defect.
36 Single Loan Fraud a. If we discover any Single Loan Fraud relating to a loan, we may rescind
coverage under the Certicate.
b. The Rescission Relief Provisions will not limit our rights under this
Section 36 except as described in Section 17(g).
37 Unapproved assumption a. We may cancel coverage under a Certicate for a loan or deny a Claim if
the loan was assumed by another Person without our approval, with or
without an original Borrower’s release from liability for the loan.
b. If you are prohibited by applicable law, or by a GSE, to exercise your
rights under a due-on-sale clause, or if you are required by applicable
law to consent to a loan assumption, we will not cancel coverage under
the Certicate or deny the Claim pursuant to paragraph (a) above.
38 Unapproved change of
loan terms or Property
If you allowed a material change to the terms of the loan or to the Property
without our prior approval, we may reduce the Insurance Benet by the
amount we reasonably estimate is the resulting damage. If we determine
the change was the principal cause of the Default, we may deny the Claim.
39 Unapproved Servicer We may cancel coverage under a Certicate for a loan if the loan servicing
is transferred to a Servicer we have not approved (if you were required to
request our approval under Section 49) or to a Servicer otherwise prohib-
ited from servicing the loan under Section 49, or if the loan continued to be
serviced by a Servicer whose approval we previously revoked, provided that
the Servicer’s deciencies identied by us were not corrected within 60
days, and servicing was not transferred to an approved Servicer 120 days
thereafter, in accordance with Section 49.
40 Unapproved resale
restrictions
If a Property is subject to a resale restriction that we did not approve (as
indicated in our approval letter to the initial Insured or our Underwriting
Guidelines), we may rescind coverage under the related Certicate.
21
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
Your responsibilities
41 Condition to our obligations
Our obligation to pay Insurance Benets under
this Policy is subject to your meeting the terms
and requirements of this Policy.
42 RESPONSIBILITIES OF THE SERVICER
a. The Servicer is the entity responsible for
servicing the loan and the administrative
aspects of a loan, including, but not limited
to, sending monthly statements, collecting
payments, maintaining records of payments
and balances, conducting loss mitigation
activities and enforcing the loan terms.
b. The Servicer is the agent or authorized
representative of the Insured and the
authorized representative of the Beneciary
for all matters under this Policy, such as
giving and receiving notices, cancelling
coverage under a Certicate, paying
premiums, receiving premium refunds and
Insurance Benets, settling Claims, and
performing acts required of the Insured. The
Beneciary’s statements, acts and omissions
are binding on the Servicer to the extent
they relate in any way to a Commitment or
Certicate issued under this Policy or would
result in acceptance of or a reduction or
denial of the Insurance Benet, or rescission
of coverage under a Certicate. Also, the
Insured and Beneciary are bound by any
actions or omissions of the Servicer with
respect to this Policy. However, for a
Beneciary, the only effect of a Servicer’s
error or omission will be the non-payment
or adjustment of the Insurance Benet; the
Beneciary will have no other liability to us.
c. If the Beneciary is a GSE Beneciary, the
Servicer must have such GSE Beneciary’s
consent to manage or dispose of any
Property, receive payment of the Insurance
Benet, modify the loan or the Borrower’s
obligations under the loan, enter into any
agreements with us relating to multiple
loans owned by the GSE Beneciary, or give
any consent under this Policy on behalf
of the GSE Beneciary. The Servicer may
perform any other acts of a GSE Beneciary
under this Policy without its consent,
including agreeing to the resolution of
individual Claims.
d. If a subservicer is servicing a loan, the Servicer
shall remain responsible for performing all
obligations of the Servicer under this Policy.
All statements, acts and omissions of such
subservicer shall be binding on the Servicer
to the same extent as if made, performed or
omitted by the Servicer.
43 PAYMENT OF PREMIUMS
a. You are solely responsible for paying all
premiums due under this Policy, regardless
of whether you are reimbursed by a Borrower
or anyone else. You must make premium
payments in a way that identies which
loans they apply to. For purposes of this
Policy, premiums include all related taxes
and assessments.
b. We will promptly deposit any payments we
receive. However, the premium is not deemed
accepted until we reconcile the payment with
the applicable loan. Our receiving, depositing,
or accepting a premium payment does not
waive any conditions or any of our rights or
remedies under this Policy.
c. If we discover a Defect and we determine
that the loan would have been eligible
for coverage despite such Defect, but at a
higher premium, we may notify the Servicer
and require payment of the additional
premium due. The Servicer must pay the
additional premium in a single payment
within 60 days of receiving our notice. If
we do not receive the additional premium
within 60 days, we may rescind coverage
under the applicable Certicate.
44 Timing of initial premium payment
We must receive the initial premium payment
within the time specied in our Servicing Guide
for the premium plan selected on the Commit-
22
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
ment, unless we have agreed to another date.
The Commitment species the amount of the
initial premium payment.
45 Renewal premiums
We will notify you of the renewal premium
payment for a loan, calculated pursuant to the
premium plan identied on the Certicate. To
continue coverage, you must pay the renewal
premium by the date specied in the notice
and as further specied in our Servicing Guide.
To maintain coverage, you must pay premium for
the period up to the date of a Default. If the
Borrower cures the Default, unless you have
continued to pay renewal premiums during the
period after Default, within 60 days after we are
notied of the cure, you must pay any premium
owed or coverage under the Certicate for the
related loan will lapse. Premiums paid for the
period after a Default that results in a Claim will
be refunded to you if an Insurance Benet is paid.
46 Lapse and reinstatement of coverage
a. If you have not paid the renewal premium on
a loan before the due date, coverage under
the Certicate will end at 12:01 AM on the
due date (which then becomes the “Lapse
Date”), and we will cancel coverage under
the Certicate effective as of the Lapse Date.
However, we will continue uninterrupted
coverage if we receive full payment within
60 days of the Lapse Date or, if a non-
payment notice is required by applicable
law, within the grace period specied in such
non-payment notice or as otherwise required
by law. We may also reinstate coverage under
the Certicate in accordance with our
Servicing Guide.
b. If coverage has lapsed on a group of loans
because of transfer, seizure or surrender of
the loan servicing, you may request
reinstatement of coverage only if:
i. you reinstate coverage on all loans in
the group; and
ii. you pay all renewal premiums within
120 days of their Lapse Dates.
c. Except as described in Sections 46(a) and
(b), we are under no obligation to reinstate
coverage that has lapsed for failure to pay
renewal premium before or after a Default.
If we reinstate coverage, any Claim resulting
from a Default that occurred after the Lapse
Date will only be covered if the entire
renewal premium through the date of
Default has been paid as required by our
Servicing Guide. In addition, we may charge
interest from each affected Certicate’s
Lapse Date to the date the premiums were
actually paid. Interest will be calculated at
the three-month Treasury Bill rate published
in the Federal Reserve Board’s H.15 release
for the week including the renewal premium
due date or such other similar commercially
reasonable measure as we determine and
communicate to you by notice.
47 REQUIRED REPORTING
AND NOTIFICATIONS
You must provide us with a monthly servicing
report by the 25th day of each month, if required,
as described in our Servicing Guide. The
submission of these required reports will
constitute a representation by the Servicer that
all information contained in such reports is true
and complete in all material respects.
If you are aware of a dispute relevant to any loan
or the applicable Property, you must notify us. We
have the right, but not the obligation, to defend
any legal action arising from the dispute. We also
have the right to direct you to commence legal
action if we determine that it is necessary to
protect our rights, but if we so direct, then we will
pay the expenses for such legal action; provided,
however, that this paragraph shall not apply to
Appropriate Proceedings.
If you are aware of a Signicant Defect, Single
Loan Fraud or Pattern Activity with respect to
a loan, you must notify us within 30 days of
discovering such information. You also must notify
us, and provide us with all related documents,
within 30 days whenever a loan is required to
be repurchased from a GSE or any other investor.
Following our receipt of such documents, we may
request additional information to determine
whether Section 30 or 36 applies.
23
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
48 REQUIRED APPROVALS FOR CHANGES
49 Change of Servicer; Deficiencies
in performance
a. A Servicer of a loan must be approved by us.
A Servicer is deemed to be approved if we
have separately issued an in-force mortgage
guaranty insurance master policy in the same
form as this Policy to the Servicer. Otherwise,
you must request our approval of the new
Servicer. Until we receive notice of and
approve a change in Servicer, the Person
most recently identied to us as the Servicer
of the loan shall be deemed to be the
Servicer of the loan.
b. We will notify you of any Servicer deciencies
in performance and allow you 60 days to
correct those deciencies. If the Beneciary
is a GSE Beneciary, we will provide a copy
of this notice to the GSE Beneciary.
c. If the deciencies are not corrected within
60 days, then we may notify you (and the GSE
Beneciary if applicable) that the Servicer’s
approval is revoked or limited as follows:
i. the Servicer will no longer be permitted
to service any loans, in which case the
servicing of all loans must be transferred
to an approved Servicer within 120 days
after such notice; or
ii. the Servicer will be permitted to
continue to service the loans it services
as of the effective date of our notice,
but will not be permitted to service any
other loans (including as result of loan
transfer, origination or otherwise). If we
so limit a Servicer’s approval, we may
thereafter revoke approval under clause
(i) above without providing an additional
cure period with respect to the Servicer’s
performance deciencies.
d. Subject to paying premium, coverage under a
Certicate will continue uninterrupted when
servicing is transferred from one approved
Servicer to another approved Servicer. We
may cancel coverage under a Certicate or
deny a Claim if:
i. on the date of the servicing transfer, the
new Servicer is not an approved Servicer
or is a Servicer whose approval is limited
as described in Section 49(c)(ii) above,
unless the servicing of the related loan
is transferred to an approved Servicer
within 120 days of our notice to the
Servicer and, if applicable, the GSE
Beneciary; or
ii. effective as of the day after the 120-day
deadline stated above in Section 49(c)(i),
servicing has not been transferred
as required.
50 Change of Beneficiary
a. If you sell, assign, or transfer a loan, the
purchaser becomes the Beneciary under
the Certicate for such loan as of the
transfer date.
b. In such cases, the Beneciary may elect to
become the Insured under this Policy with
respect to the related Certicate as of the
transfer date, subject to all of the rights
and obligations of the Insured hereunder
with respect to such Certicate and the
related loan.
c. No loan transfer or change in the identity of
any Insured, Servicer or Beneciary will affect
any of our rights under this Policy, regardless
of the knowledge or responsibility of the new
Insured, Servicer or Beneciary relating to
matters occurring before becoming an
Insured, Servicer or Beneciary.
51 Workouts; Changes to the
Property or loan terms
a. If you wish to effect a Workout or approve
another change in loan terms or a Property,
you must receive our approval in advance,
unless the change is allowed by the terms of
the loan, applicable law or this Policy or we
have delegated our approval to accept a
Workout to the Servicer by a delegation
agreement we executed or under the terms of
our Servicing Guide. In each case, the Servicer
must report a completed Workout to us within
30 days after the Workout has been completed.
24
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
b. Provided that you request our approval
through an approved delivery method, if you
request our approval and have not received
our approval, denial or request for additional
information within 10 business days, then the
Workout is deemed to be approved.
c. If we approve a loan modication, the
premium rate for coverage will remain the
same. Premiums on loans modied with our
approval must be paid in accordance with
instructions in our Servicing Guide and the
premium plan as indicated on the original
Certicate.
d. If the Beneciary is not a GSE Beneciary,
and the terms of the approved Workout
provide that a cash contribution will be
paid by the Borrower or the Borrower will
execute a promissory note payable to us,
then the amount of such cash contribution
will be deducted from the Insurance Benet
paid for the loan, or the promissory note
will be delivered to us, as specied in our
Servicing Guide or otherwise as agreed. If
the Beneciary is a GSE Beneciary, and
the terms of the approved Workout involve
a transfer of title to the Property by the
Borrower, then unless otherwise agreed
by the GSE Beneciary and us, any cash
contribution by the Borrower and any
payment by the Borrower under the terms
of a promissory note, less any reasonable
expenses incurred in documenting and
collecting the Borrower contribution or
payments, will be shared by the GSE
Beneciary and us pro rata. Our pro rata
share of the contribution will be calculated
using a quotient, the numerator of which
will be the Insurance Benet paid, and the
denominator of which will be the Total Loss.
e. Our approval of any Workout or conveyance
of the Property is not an approval of your
Claim or an acknowledgment of Insurance
Benets due.
f. If a Servicer or GSE Beneciary has approved
a Third-Party Sale pursuant to a delegation
of authority, and in connection with a related
Claim there is Physical Damage, we may
settle the Claim using the Anticipated
Loss Option. If we choose to exercise the
Anticipated Loss Option in this circumstance,
the Estimated Net Proceeds will be
determined assuming that the sale of the
Property closed without Physical Damage.
52 DEFAULT NOTIFICATIONS AND
YOUR ONGOING RESPONSIBILITIES
REGARDING DEFAULTS
53 Notice of Default
If the Borrower fails to make two consecutive
loan payments, you must give us a notice of
Default pursuant to our Servicing Guide prior to
the due date of the next loan payment. If you fail
to so notify us, any Claim Amount relating to
such Defaulted loan will exclude any interest
accrued or Advances paid between the deadline
for giving us a notice of Default and the date
you provide notice. If you continue to fail to so
notify us for 12 or more months after the
deadline for giving us a notice of Default, we
may cancel coverage on the loan pursuant to
Section 23(b)(iii).
54 Monthly Default reports
a. After you give us notice of Default, you must
provide us with monthly reports by the 25th
day of the following month including the
status of the loan and any servicing efforts
taken to cure the Default or commence,
pursue or complete Appropriate Proceedings.
These reports must comply with the
requirements in our then current Servicing
Guide. This Default report is in addition to
the reporting required under Section 47.
b. You must continue to submit such monthly
Default reports until a Claim is presented to
us and we issue our decision to you, or the
loan is no longer in Default.
c. You must also submit a nal report on the
resolution of any Default in the month
following the resolution.
25
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
55 Cooperation in servicing efforts
At our request, you must allow us to assist you
in contacting the Borrower for activities such as
obtaining information, setting up a payment
schedule, scheduling or conducting a Property
inspection, or scheduling an appraisal. We have
the right to assist in efforts to mitigate any loss,
including by engaging a specialty servicer or
other vendor at our expense to oversee the
Servicer’s, Beneciary’s and their agents’
activities with respect to loans. You must also
provide us with information regarding all of
your similar efforts to contact the Borrower and
cooperate with us as reasonably necessary to
enable us to engage in such mitigation and
Borrower contact activities.
56 Payment of Advances
You must pay all of the following Advances
related to a loan when they become due, unless
prohibited by law:
a. Reasonable and customary hazard and ood
insurance premiums;
b. State and local taxes, assessments and other
public charges imposed on the Property, not
to include late fees or other penalties;
c. In the event of a Default, commercially
reasonable and necessary expenses to
maintain or protect the Property (other than
expenditures to remove an exclusion from
coverage, such as Physical Damage);
d. Fees required to maintain the rst lien status
of the loan, including condominium fees,
homeowner association dues, co-op
maintenance fees, and pro-rated portions
of shared fees related to the common areas
attendant to the Property;
e. Reasonable expenditures to complete
Appropriate Proceedings (including moving
expenses, where required by applicable law
to be paid by the evicting party) and, if we
have exercised the Acquisition Option or
there is a Third-Party Sale that we have
approved or if we otherwise require access
to the Property, eviction proceedings. This
includes court costs and attorneys’ fees, but
attorneys’ fees must not exceed:
i. 3% of the unpaid principal balance and
accrued interest that is included in the
allowable Claim Amount on a loan with
an unpaid principal balance of $200,000
or greater; or
ii. the lesser of: (x) $6,000; and (y) 5% of
the unpaid principal balance and accrued
interest that is included in the allowable
Claim Amount on a loan with an unpaid
principal balance less than $200,000.
This limitation does not apply to reasonable
attorneys’ fees incurred to enforce our
subrogation rights.
57 Appropriate Proceedings
a. You must commence Appropriate Proceedings
by the later of the following, unless we
instruct you to take other action:
i. 30 days after the loan remains in Default
for a period of six consecutive months; or
ii. 60 days after the earliest date allowed by
applicable law.
b. The deadlines noted above for commencing
Appropriate Proceedings will not apply for as
long as:
i. proceedings are delayed by a court order
or other legal moratorium that applies
generally in a particular jurisdiction; or
ii. you are actively pursuing a Workout
with the Borrower in accordance with
this Policy or have already achieved a
Workout.
c. We will not give alternate instructions
regarding Appropriate Proceedings on loans
insured for the benet of a GSE Beneciary
without rst receiving the GSE’s approval.
d. You must diligently pursue completion of
Appropriate Proceedings once commenced
and in compliance with the foreclosure
timelines stated in the Servicing Guide and
conduct Appropriate Proceedings in a way
that preserves our deciency and subrogation
rights and your ability to transfer and assign
26
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
to us your rights against the Borrower. You
must also follow our instructions as required
by Section 59 when bidding at the
foreclosure sale.
e. Your failure to comply with the foregoing
Sections 57(a) through (d) may result in
the exercise of our remedies described in
Section 23.
58 Loss mitigation
a. You must make commercially reasonable
efforts to prevent and mitigate loss on a
loan in a reasonable and prudent manner,
consistent with generally accepted standards
of servicing then in use in the rst-lien
residential mortgage industry, including
with respect to loans for which there is no
mortgage guaranty insurance, but in no event
at a standard less than the GSE-required
servicing standards then in effect. You must
also comply with our Servicing Guide and
any other applicable guidelines to which the
Servicer or Beneciary is subject, and as we
may otherwise direct. Such prevention and
mitigation efforts include diligent efforts
to obtain a cure of a Default, prompt and
ongoing Borrower contact, obtaining a
Workout, Property inspection and appraisal,
or a Third-Party Sale approved by us.
b. Your mitigation efforts also include diligent
efforts to market any Property for which a
Servicer or Beneciary has obtained title
to a Property. The Servicer shall authorize
and direct its broker to release to us any
marketing information concerning the
Property that we request.
c. No provisions of this Policy or activities
related to loss mitigation shall prevent or
delay your commencing Appropriate
Proceedings to enforce or satisfy the
Borrower’s obligations under a loan.
d. Your failure to comply with the foregoing
Sections 58(a) through (c) may result in us
exercising one of our remedies described in
Section 23.
59 Foreclosure bidding instructions
Unless we direct you otherwise or you are
prohibited by applicable law, you must bid at
foreclosure as we instruct in our Servicing Guide.
You must receive our approval before you
proceed with any other bidding instructions.
60 Eminent domain
If the Property or any portion of it is taken by
eminent domain or any other government
proceeding, you will require the Borrower to
apply the compensation received to reduce the
outstanding principal balance and interest due
on the loan, to the maximum amount permitted
under the loan and applicable law. Notwith-
standing the foregoing sentence, documented
moving or temporary housing expenses associ-
ated with the Borrower’s relocation are not
required to be applied to reduce the outstanding
principal balance and interest due on the loan.
61 OUR OPTIONS UPON DEFAULT
62 Filing of accelerated Claim
a. After receiving your notice of Default, if we
request that you submit an accelerated Claim,
you must do so within 60 days of our request.
Our direction to submit an accelerated Claim
will not restrict our rights or remedies.
b. Only those Core Claim Documents that exist
at the time we request the accelerated Claim
must be submitted to us.
c. If you do not le the accelerated Claim
within 60 days of our request, the Claim
Amount will exclude any interest accrued on
the loan after that time.
d. If we request that you le an accelerated
Claim, the Servicer’s obligation to pursue and
complete Appropriate Proceedings and to
mitigate loss will continue as if the
submission of the Claim had not been
accelerated.
e. You will have the right, as described in
Section 62(f), to le a supplemental Claim for
the amount of Advances not included in the
27
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
initial, accelerated Claim, but you cannot
claim Advances to the extent you have
recovered funds, including any Insurance
Benet we previously paid, equal to or more
than the Total Loss.
f. Within 90 days after completion of a
foreclosure sale, deed-in-lieu of foreclosure or
a Third-Party Sale closes, you may submit a
supplemental Claim for Advances you paid
that were not included in the accelerated
Claim to the extent they would be included in
the Claim Amount for, as applicable, the period
through which Appropriate Proceedings were
required to have been completed, the date the
deed-in-lieu of foreclosure is executed, or the
date the Third-Party Sale closes.
g. Any information not in existence on the date
that the accelerated Claim is submitted, but
which would otherwise be required for a
Claim to be a Perfected Claim, shall be submit-
ted together with the supplemental Claim.
If the supplemental Claim for Advances is
submitted within the 90-day period described
in Section 62(f) together with all required sup-
porting documentation, we will pay any
additional Insurance Benet under this Policy
within 60 days of our receipt of the supple-
mental Claim. For the avoidance of doubt, any
additional Insurance Benet we may pay in
settlement of a supplemental Claim submitted
in connection with this section will be limited
to the Advances described in Section 62(f).
h. No exclusion or deduction that reduced the
Claim Amount or Insurance Benet paid on
an accelerated Claim shall be included in any
related supplemental Claim.
i. If we pay an Insurance Benet under this
Section 62, including any supplemental
Claim, it will be paid under the Percentage
Option.
j. If a Borrower becomes current on a loan after
we pay an accelerated Claim, you must repay
us the Insurance Benet within 60 days. If we
pay an Insurance Benet under this Section
62 to a Beneciary that is a GSE Beneciary,
repayment pursuant to this subsection (j) will
not be required unless the GSE Beneciary
has agreed in writing prior to our direction to
submit an accelerated Claim that a refund
will be payable as provided herein.
63 Claim advances
Subject to the prior approval of any applicable
GSE Beneciary, we may advance to you a partial
Insurance Benet on terms we specify at the time
of the advance. If such a Claim advance is paid to
the Insured or Servicer, we will notify such GSE
Beneciary at the time we pay the Claim advance.
The amount of the Claim advance will be
deducted from any future Insurance Benet we
may pay with respect to the loan. If the Claim is
later denied or curtailed, or coverage under the
Certicate is cancelled or rescinded, you must
refund the Claim advance to us.
Claims
64 FILING A CLAIM
a. In order to le a Claim, one of the following
conditions must be met:
i. completion of the foreclosure sale of
the Property, regardless of whether
certication, conrmation or ratication
of the sale has occurred;
ii. conveyance of title to the Property
by execution of a deed-in-lieu of
foreclosure; or
iii. closing of a Third-Party Sale by the
Borrower.
b. You must le a Claim within 60 days of the
rst to occur of the conditions identied
under Section 64(a).
65 What happens if you miss the deadline
If you do not le a Claim by the deadline stated
in Section 64, we are not obligated to include
in the Claim Amount any interest accrued or
Advances you paid after the deadline passed. If
the Claim is submitted more than 120 days after
the expiration of the deadline stated in Section
64, then we may deny the Claim.
28
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
66 Documents required
To le a Claim, you must submit to us the
information listed in our Servicing Guide
as of the date you submit the Claim to us,
including the Core Claim Documents. If we
require additional information or access to the
Property before your Claim can be perfected,
we will request it under Section 67 and/or 68.
a. Once you have provided the Perfected
Claim Information we consider your Claim
submission to be a “Perfected Claim.” The
date on which you have provided all
Perfected Claim Information is considered
the “Perfected Claim Date.” A Perfected
Claim does not relieve you of your obliga-
tions under Sections 67 and 68 applicable
to requests made after a Claim has become
a Perfected Claim, and this may result in a
change to the Claim Settlement Period for
such Perfected Claim.
b. If we are acquiring the Property under the
Acquisition Option, you must also provide:
i. good and marketable title to the
Property;
ii. if we request, a title insurance commit-
ment or a reasonably acceptable legal
opinion that you are able to convey title
to the Property;
iii. possession of the Property, which gives
us the immediate right to actual, physical
and undisputed occupancy and control of
the Property; and
iv. a recordable but unrecorded deed, usual
and customary for the Property location,
containing customary provisions and
conveying to us or our designee good and
marketable title, together with all docu-
ments required to complete the transfer
of title, all of which shall be executed.
c. For the title to be good and marketable, all of
the following must be true:
i. there are no liens against the Property,
other than those established by public
bond, assessment or tax, and there are
no delinquencies in their payment;
ii. there are no encumbrances affecting the
Property, other than recorded building
and use restrictions and municipal or
zoning ordinances or regulations that
do not adversely affect the normal
residential use of the Property;
iii. the Property is currently in compliance
with any applicable ordinances and
regulations, and any agreements and
restrictions relating to cooperative
housing ownership;
iv. there are no easements, conditions,
resale restrictions, rights, or rights of way
that will have a material effect on the
ability to sell or transfer the Property,
except for those permitted under our
Underwriting Guidelines or otherwise
approved by us in writing;
v. there are no liens against the Property
or claims related to toxic waste,
environmental contamination, or a
similar hazard under any applicable law;
vi. if the Property is a cooperative housing
unit, there is no unpaid maintenance; and
vii. the Property has acceptable means of
ingress and egress, and has rights to
use public or private water and sewer
facilities connected to the Property
and any other water rights reasonably
necessary for the use and enjoyment of
the Property.
d. If we are not acquiring the Property, you must
submit, as set forth in our Servicing Guide or
upon our request:
i. a copy of an executed trustee’s or
sheriff’s deed that conveys title of the
Property to you, or other evidence that
a foreclosure has been completed; or
ii. if we have approved the Borrower’s
deed-in-lieu of foreclosure, the deed that
conveyed title to you, together with other
documents related to the transaction.
e. If any of the required documents is not
available, we will consider alternative
documents that you submit and determine
whether they are reasonably acceptable.
29
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
67 Additional Claim information required
a. If any of the Core Claim Documents is
missing from your Claim, or we require
additional information to process the Claim
(i.e., your Claim is not perfected with the
information submitted with the initial Claim),
we will notify you and request the missing
or additional information within 20 days of
receiving your Claim. However, we will not
request, and you will not be required to
resubmit, any Origination File information
or documents or Closing File information or
documents that were previously submitted
to us in connection with the Application,
Independent Validation or QC Review of the
related loan. If we have any additional
requests, we will make such requests within
10 business days after the Perfected Claim
Date. Other than requests for access to a
Property, as described in Section 68, if we
have any such additional requests after the
Perfected Claim Date, the Claim Settlement
Period will not be extended, and the Bene-
ciary or Servicer must use reasonable efforts
to satisfy the additional requests. We will
pursue any investigations related to a Claim
expeditiously and in good faith.
b. If we have not received information we
requested after 30 days, we will send you
a reminder. Further, we will provide the
Beneciary with a copy of such reminder if
requested by the Beneciary. If a Claim is
not perfected within 120 days of the Claim
ling date, unless we and the Beneciary
have agreed to an extension or an extension
is required by applicable law or an extension
is expressly provided for under the terms of
this Policy in Sections 67(d), 68(a) or 68(b),
we will deny the Claim on that basis.
c. If a Claim is denied without payment under
this section, we will have the right to retain
all Premium paid in connection with the
Certicate.
d. If we approve a Third-Party Sale after you
have led a Claim but prior to it becoming
a Perfected Claim, you must submit the
information relating to the sale required
by our Servicing Guide, no later than 60
days after the Third-Party Sale closes, and,
if you have met all other Claim perfection
requirements, the date you submit such
information will be the Perfected Claim Date
for such Claim. If the Third-Party Sale does
not close within the 210-day period after
the Claim was initially led, the Perfected
Claim Date for such Claim will be the 210th
day, and we may settle the Claim under the
Anticipated Loss Option. If we settle the
Claim under the Anticipated Loss Option
in this circumstance, the Estimated Net
Proceeds will be determined assuming a
Property value as of the date we approved
the Third-Party Sale.
e. If a Third-Party Sale is not approved by the
date that is 60 days after the Claim becomes
a Perfected Claim and we do not elect to
settle the Claim pursuant to the Acquisition
Option, then the Claim Settlement Period
will not be any further extended, nor will our
approval be required for a Third-Party Sale.
If we approve a Third-Party Sale no later than
60 days after the Claim becomes a Perfected
Claim, the Servicer or Beneciary must submit
the information relating to the sale required
by our Servicing Guide, no later than 60 days
after the Third-Party Sale closes. In this
circumstance, the Claim Settlement Period
will be extended to the 10th business day
after we have received all of the information
related to the Third-Party Sale. If the Third-
Party Sale does not close within the 210-day
period after the Claim was initially led, the
Perfected Claim Date for such Claim will be
the 210th day, and we may settle the Claim
under the Anticipated Loss Option. If we
settle the Claim under the Anticipated Loss
Option in this circumstance, the Estimated
Net Proceeds will be determined assuming a
Property value as of the date we approved the
Third-Party Sale.
30
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
68 Access to the Property
a. If we require access to the Property for any
reason, we must request it by the later of the
40th day after a Claim is led or the 20th day
after the Perfected Claim Date, and you must
make your best effort to provide it. If the sole
reason a Claim does not become a Perfected
Claim is the Servicer’s or Beneciary’s failure
to provide access to the Property when
requested, the Claim will become a Perfected
Claim on the date Property access is provided
(if such access is provided prior to the end of
the 210-day period following the Claim
submission date).
b. If at the end of such 210-day period, Property
access has not been provided, the Perfected
Claim Date will be the 210th day, and we
may settle the Claim under the Anticipated
Loss Option. In this circumstance, the
Estimated Net Proceeds will be determined
assuming that the sale of the Property closed
on the date the Claim was submitted.
c. If we have requested access within 20 days
after the Perfected Claim Date and you are
unable to provide access within 210 days of
ling the Claim, we may settle the Claim
under the Anticipated Loss Option. In this
circumstance, the Estimated Net Proceeds
will be determined assuming that the sale
of the Property closed on date the Claim
was submitted.
69 PAYMENT OF A CLAIM
If we have received a Perfected Claim from you,
subject to the terms and conditions of this Policy
and the applicable Certicate, we will pay the
Insurance Benet due.
70 Calculation of the Claim Amount
The Claim Amount is calculated as follows:
Unpaid principal loan balance as of
Default date
+
Accrued interest due, calculated at the
Contract Rate, subject to Section 71(b)
+
Allowable Advances you paid as set
forth in Section 56, subject to Section
71(c)
—
Rents or other payments you received
before ling the Claim
—
Amounts remaining in escrow that you
are entitled to as of the last loan
payment date
—
Amount of pledged collateral that you
are entitled to
—
Hazard and other insurance amounts
received by you or the Borrower but not
applied to the loan or restoration of the
Property
—
Advances that required our approval
but were unapproved
—
Proceeds of eminent domain
proceedings (if, and to the extent, not
applied to reduce the unpaid principal
loan balance)
—
Proceeds of the amount paid to redeem
the Property
—
The unamortized portion of any
nanced mortgage insurance premium
as calculated in Section 71(d), if
applicable
—
Any remaining unused interest
buy-down funds, discounts or similar
features of the loan
= Claim Amount
The Claim Amount is then used to calculate the
Insurance Benet payable under this Policy,
which is adjusted in accordance with Section 79.
31
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
71 Additional requirements for
determining the Claim Amount
a. Unpaid principal loan balance
i. The unpaid principal loan balance does
not include capitalization of delinquent
interest, penalties, or Advances, except as
a result of a Workout that we approved
and for which the requisite premium
was paid. Upon completion of a Workout,
if you seek additional coverage, then
you must remit the additional premium
due to us. If additional premium was
required to be paid to us after an
approved Workout, and such additional
premium was paid, the unpaid principal
loan balance will include any amounts
added to the principal as a result of such
Workout. If the additional premium was
not paid as required, we may exclude the
additions to unpaid principal balance
from the Claim Amount.
ii. If a portion of the unpaid principal loan
balance has been forgiven as part of a
Workout we approved, the unpaid princi-
pal balance will be the unpaid principal
balance prior to such forgiveness and the
Insurance Benet will be reduced by any
premium that may have been payable for
the Certicate had the unpaid principal
balance not been so reduced.
iii. If the loan is divided into secured and
unsecured portions in bankruptcy pro-
ceedings, we will deduct the unsecured
portion of the principal balance from the
Claim Amount, unless you have continued
to pay the premium for the total of the
secured and unsecured amounts.
b. Interest
i. The periods for which accrued interest
is included in the Claim Amount will
vary based on the payment option we
select, as explained below, but will never
exceed 36 months.
ii. If an Insurance Benet is paid under the
Percentage Option, we will include in
the Claim Amount accrued and unpaid
interest through the earlier of the date
the Claim is led or required to be led.
iii. If an Insurance Benet is paid under the
Acquisition Option, we will include in
the Claim Amount accrued and unpaid
interest through the date we pay an
Insurance Benet.
iv. If an Insurance Benet is paid under the
Anticipated Loss Option, we will include
in the Claim Amount accrued and unpaid
interest through the date we pay an
Insurance Benet, subject to subsection
(v) below.
v. If an Insurance Benet is paid under the
Anticipated Loss Option because access
to the Property was not timely provided
as required in Section 68, we will include
in the Claim Amount accrued and unpaid
interest through the date we pay the
Insurance Benet, but excluding the
amounts of accrued and unpaid interest
for the period during which access was
requested but not provided.
vi. If an Insurance Benet is paid under the
Third-Party Sale Option, we will include
in the Claim Amount accrued and unpaid
interest through the date on which the
Third-Party Sale closed.
vii. If we rescind and later reinstate coverage
under a Certicate without your having
provided us with new information, we
will include in the Claim Amount accrued
and unpaid interest through the date we
pay an Insurance Benet.
viii. If a loan has been divided into secured
and unsecured portions pursuant to
proceedings under the federal bankruptcy
law, we will include in the Claim Amount
accrued and unpaid interest on both the
secured and unsecured portions through
the date interest is covered as specied
for each settlement option above (but for
no prior period), so long as the premium
paid for coverage under the Certicate
was calculated and paid based on both
the secured and unsecured portions of
the loan.
32
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
ix. If a portion of the unpaid principal
balance of the loan has been forgiven or
forborne to the end of the amortization
period as part of an approved Workout,
no interest will accrue on the forgiven or
forborne amount.
c. Advances
i. Advances will be included in the Claim
Amount only to the extent that such
Advances were in fact paid by the
Servicer or the Beneciary.
ii. Advances incurred to pay anyone
working for the Insured, Servicer or
Beneciary, or for your own internal
costs, will not be included in the
Claim Amount.
iii. Advances will be included in the Claim
Amount only with respect to the period
for which interest is allowed under this
Policy, as explained in Section 71(b).
d. If we elect the Percentage Option, or the
Percentage Option is used to calculate the
Insurance Benet, and all or any of the
mortgage insurance premium was included
in the original principal amount of the loan,
the following amount will be deducted from
the Claim Amount and added to the Insur-
ance Benet: (x) the original mortgage
insurance premium amount included in
the principal balance, multiplied by (y) a
percentage (not to exceed 100%) equal to
the unpaid principal balance described in
Section 71(a), divided by the original
principal balance of the loan.
72 Options for payment of Insurance
Benefits to settle a Claim
It is our option to choose which method we will
use for settling a Claim:
73 Percentage Option
We will pay you the Claim Amount multiplied by
the percentage of the loan that is covered, as
stated on the Certicate. With the Percentage
Option, you will retain the title to the Property.
74 Third-Party Sale Option
a. If we approve a Third-Party Sale within the
Claim Settlement Period, we will pay you the
lesser of (i) the Claim Amount less Net
Proceeds of such Third-Party Sale and less
any reduction for Physical Damage, as
described in Section 77, or Incomplete
Construction, as described in Section 78, or
(ii) the amount calculated under the
Percentage Option. If we do not settle the
Claim under Section 73 or 75 before the end
of the Claim Settlement Period, you need not
obtain our approval for a Third-Party Sale. If
we settle the Claim based on a Third-Party
Sale after the Claim Settlement Period, the
Insurance Benet will include the applicable
amount of Section 80 interest.
b. If we approve a Third-Party Sale pursuant to
Section 67(e) and the sale does not close
before the end of the Claim Settlement
Period, we may postpone settlement of the
Claim and the Claim Settlement Period will
be extended to the 10th business day after
we have received all of the information
related to the Third-Party Sale, in accordance
with Section 67(e). If the sale does not close
within the 210-day period after the Claim
was initially led, we may settle the Claim
under the Anticipated Loss Option or the
Percentage Option, whichever is less. If we
choose to exercise the Anticipated Loss
Option in this circumstance, the Estimated
Net Proceeds will be determined assuming
a Property value as of the date we approved
such Third-Party Sale.
c. If a Third-Party Sale occurs without our
approval and we determine that the sale
price was below market value, when we
calculate the Claim Amount, we will
substitute the Estimated Net Proceeds for
Net Proceeds when calculating the Insurance
Benet under Section 74(a).
75 Acquisition Option
a. Within the later of 60 days following the
Perfected Claim Date and the date we are
granted access to the Property (as we may
33
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
request under Section 68), we will notify you
if we elect the Acquisition Option. If we do
so, we will pay the Insurance Benet, as
calculated below, following receipt of the
deed conveying good and marketable title
to and possession of the Property. Within 45
days after we notify you of our election, you
must provide us with: (i) a recordable but
unrecorded deed, customary for the Property
location and with customary warranties and
covenants, conveying good and marketable
title; (ii) possession of the Property; and (iii)
any documents necessary to complete the
transfer of title of the Property to us.
b. We will send the deed to the Property to be
recorded within 60 days of our receipt.
c. The amount we will pay you is calculated as
follows: Claim Amount less any reduction for
Physical Damage or Incomplete Construction,
as described in Sections 77 and 78.
d. If we choose the Acquisition Option but you
are unable to convey the title and possession
of the Property within the later of 210 days
of ling the Claim and 45 days after we elect
the Acquisition Option, you will retain title to
the Property and we may settle the Claim
under the Anticipated Loss Option.
76 Anticipated Loss Option
When we settle a Claim under the Anticipated
Loss Option as described in Sections 67(d), 68(b),
68(c), 71(b), 74(b), 75(d), 77(a), 77(b) or 78(b), we
will pay you an Insurance Benet equal to the
amount of our anticipated loss, which may result
in no Insurance Benet being payable by us.
The amount of our anticipated loss is calculated
as follows: Claim Amount less Estimated
Net Proceeds.
77 Adjustments for Physical Damage to the Property
a. When we are able to estimate restoration
costs. If Physical Damage was not the
principal cause of the Default giving rise to
a Claim, the Property has not been restored
and we are able to reasonably determine
the estimated restoration costs of Physical
Damage, we may reduce the Claim Amount
by the amount of such costs if we elect the
Acquisition Option or Third-Party Sale
Option. If the estimated Physical Damage
exceeds 10% of the Original Value and there
is no acquisition or approved or closed
Third-Party Sale by the end of the initial
60-day Claim Settlement Period, the Claim
Settlement Period shall be extended until
the earlier of a Third-Party Sale or, if we
notify you that we intend to elect the
Anticipated Loss Option, 210 days following
the ling of the Claim. If no Third-Party Sale
has closed by such 210th day, or if you notify
us before such 210th day that no Third-
Party Sale will occur, we may exercise the
Anticipated Loss Option. The Servicer or
Beneciary is required to use its diligent
efforts to market the Property pursuant to
Section 58(b). In establishing the cost to
restore the Property to a condition no worse
than its condition on the Commitment date,
we may either obtain a complete repair
estimate from an independent third party
of our choosing or rely on third party repair
estimates provided by the Servicer or
Beneciary. Any estimate must be based
on an examination of both the inside and
outside of the Property and dwelling. If we
choose our own third party estimate, we
will provide a copy of it to you upon request.
You have the right to appeal the amount
deducted for Physical Damage in accordance
with Section 91 or choose to restore the
Property yourself.
b. When we are unable to estimate restoration
costs. If we are unable to reasonably deter-
mine the estimated restoration costs of
Physical Damage, we may exercise the
Anticipated Loss Option or settle the Claim
under another option pursuant to Section 72.
78 Clarifications on adjustments
for Incomplete Construction
a. When we are able to estimate construction
completion costs. If we are able to reasonably
determine the estimated costs to complete
construction in the case of Incomplete
34
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
Construction, we may reduce the Claim
Amount by the amount of such completion
costs. In establishing the cost to complete the
Property, we may either obtain an estimate
from an independent third party of our
choosing or rely on third party estimates
provided by the Servicer or Beneciary. If
we choose our own third party estimate, we
will provide a copy of it to you upon request.
You have the right to appeal the amount
deducted for Incomplete Construction in
accordance with Section 91 or choose to
complete construction of the Property yourself.
b. When we are unable to estimate construction
completion costs. If we are unable to reason-
ably determine the estimated costs to
complete construction, we may exercise the
Anticipated Loss Option or settle the Claim
under another option pursuant to Section 72.
79 Amounts added to or deducted
from the Insurance Benefit
a. We will add the following amounts to the
Insurance Benet, or remit them separately,
if applicable:
i. Deciency Expenses you incurred, if
we elect to participate in recovery
of a deciency judgment against the
Borrower;
ii. premiums you paid for the period after
the Default date, which must be remitted
separately to a GSE Beneciary, if any;
iii. the amount calculated in accordance
with Section 71(d).
b. We will deduct any of the following amounts
from the Insurance Benet, if applicable:
i. Insurance Benet payments we have
already made to you, i.e., accelerated
Claims and/or Claims advances;
ii. premiums that were due but unpaid
through the date of Default or that were
previously returned to you, including any
unpaid premium due after an approved
Workout;
iii. our portion of any payment you received
from the Borrower as a condition for
approving a Third-Party Sale by the
Borrower or a deed-in-lieu of foreclosure,
as described by Section 51.
80 Delayed settlement
a. If we do not settle a Claim within the Claim
Settlement Period, we will notify you of any
investigation with respect to the loan or the
Property that is still pending and work
diligently to complete it expeditiously and in
good faith. If we later pay the Claim, we will
include interest on the amount of the
Insurance Benet from the date the Claim
Settlement Period expired to the date we
paid the Claim.
b. We will calculate such interest as follows:
i. for 60 days after the Claim Settlement
Period expires: at the Contract Rate; and
ii. for the 61st day and beyond: at the
Contract Rate plus 10 percentage points.
c. However, we will not add the 10 percentage
points to the Contract Rate if the delay in
paying the Claim is caused by the failure of
payment systems beyond our control.
81 Written Explanation of Benefits (EOB)
We will provide an EOB that explains the details
of any Insurance Benet paid and any decision
we have made to adjust the Claim Amount or
Insurance Benet.
82 Coordination of coverage
The coverage provided under any Certicate
issued under this Policy is primary mortgage
guaranty insurance. The Insured shall not carry
any duplicate policy of primary mortgage guar-
anty insurance on a loan covering the same loss.
In the event of a duplicate policy, we will pay the
loss on a pro rata basis with the duplicate insurer.
Any Insurance Benet that otherwise becomes
payable under this Policy shall be paid by us
regardless of the existence of any supplemental
or second-tier credit enhancement on a loan.
35
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
Supplemental or second-tier credit enhancement
shall include any policy of mortgage guaranty
pool insurance, supplemental primary mortgage
guaranty insurance, credit insurance, reinsurance,
or any other form of credit enhancement that is
not a duplicate policy of primary mortgage
guaranty insurance covering the same loss.
83 AFTER A CLAIM IS PAID
84 Fulfillment of our obligation
Upon our payment of the Insurance Benet,
including any we may pay after we settle a
supplemental Claim, our liability under the
Certicate is fully and nally discharged.
85 Supplemental Claims
a. The Servicer or Beneciary will be entitled to
submit a supplemental Claim for allowable
Advances actually paid by the Servicer or
Beneciary if such Advances were (1) incurred
prior to the date the initial Claim was submit-
ted, but not included in the initial Claim or (2)
incurred after the date the initial Claim was
submitted and during any period for which
accrued and unpaid interest would be includ-
ed pursuant to the applicable Claim settle-
ment option as described in Section 71(b), or
as described in our Servicing Guide. Nothing
herein will be deemed to entitle the Servicer
or Beneciary to seek a supplemental or
additional payment of anything other than
such Advances. If the supplemental Claim for
Advances and all required documentation
related thereto are submitted within 90 days
after payment of an Insurance Benet, we will
pay any amounts due within 60 days of our
receipt of a true and complete supplemental
Claim. If the Insurance Benet is calculated
pursuant to the Percentage Option, the
Percentage Option will also be used to
calculate the amount of any benet payable
under the supplemental Claim. No exclusion
or deduction that reduced the Claim Amount
or Insurance Benet paid on the initial Claim
shall be included in any supplemental Claim.
b. Section 85(a) does not apply to supplemental
Claims submitted in connection with
accelerated Claims.
86 Required repayments
If any Person redeems the Property after we pay
a Claim, and the sum of the Insurance Benet
paid plus the redemption amount exceeds the
Claim Amount, you must repay us the excess
within 60 days of the redemption. If you fail to
pay us such excess by such date, then (a) interest
will accrue on the amount due but unpaid from
the 61st day after redemption until the date paid
to us, calculated at a rate per annum equal to
the one-year Treasury Bill rate in effect on such
61st day, as published by the Federal Reserve
Board; and (b) you agree to pay all of our
collection costs, including reasonable attorneys’
fees and expenses, that we incur in order to
enforce our rights under this Section 86.
87 Subrogation
a. If we pay an Insurance Benet, we will be
subrogated to your rights with respect to the
loan, Borrower and the Property. Our rights
of recovery against the Borrower or any other
Person are in equal priority to yours. Upon
request, you will provide any information or
documents necessary to transfer or assign
such rights of recovery to us. You will also
take any actions and cooperate with us in any
actions or proceedings we pursue to enforce
our rights or seek other remedies we are
entitled to. Either before or after the payment
of an Insurance Benet, you are prohibited
from taking any action that would affect our
subrogation rights, including providing a
release of liability to the Borrower.
b. The following provision applies with respect
to loans for which the related Property is
located in any of the following jurisdictions:
Alabama, Arizona, Illinois, Iowa, Kansas, New
York, Ohio, Texas, Virginia or Wisconsin: If the
Property consists of a single-family dwelling
occupied by a Borrower, we do not have
subrogation rights against any Borrower
and no Borrower will be liable to us for any
deciency arising from a foreclosure sale.
36
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
88 Pursuit of a deficiency judgment
a. Each of us can elect to pursue a deciency
judgment against the Borrower independently
or jointly. Neither party may pursue a
deciency judgment in an amount greater
than its share of the total deciency amount
established and due after the foreclosure sale
calculated as set forth in Section 88(b).
b. Our share of a deciency judgment is an
amount equal to the Insurance Benet paid,
up to the amount of the total deciency
established and due after the foreclosure
sale. Your share is the amount, if any, by
which the total deciency amount exceeds
the Insurance Benet paid. If we elect to
pursue a deciency judgment jointly with the
Beneciary, or the Servicer acting on behalf
of the Beneciary, we will execute a separate
joint pursuit agreement which will provide
that all expenses (including court costs,
attorneys’ fees and other Advances actually
paid by the Servicer or Beneciary and,
except on that portion of any Insurance
Benet paid on an accelerated Claim, interest
exclusive of delinquency charges and penalty
rates and not compounded) associated with
the preservation and pursuit of the deciency
judgment in excess of those expenses
associated with the normal and customary
foreclosure process in absence of deciency
judgment proceedings, and all amounts
collected pursuant to the deciency judg-
ment will be shared pro rata by the Bene-
ciary and us. Our pro rata share of the
recovery and expenses will be calculated
using a quotient, the numerator of which
shall be the Insurance Benet paid, and the
denominator of which shall be the total
deciency amount.
c. If your pursuit of a deciency judgment
would increase the costs associated with a
foreclosure, you will contact us before
starting the foreclosure proceeding.
d. If the Beneciary, or the Servicer acting on
behalf of the Beneciary, elects to pursue a
deciency judgment and we elect not to
participate, we will not be subrogated to any
of the Insured’s rights of recovery against the
Borrower or any other Person relating to the
loan or the Certicate with respect to which
we have paid an Insurance Benet. The
Beneciary, or the Servicer acting on behalf
of the Beneciary, will be responsible for all
costs associated with pursuing the deciency
judgment. We will reimburse only the interest
and expenses associated with the normal
and customary foreclosure process in the
absence of the deciency judgment
proceedings and will not reimburse any
additional expenses associated with
obtaining the deciency judgment.
e. Other than formally seeking deciency
judgments from the court, you and we are
both free to pursue collection activities
against the Borrower independently, as
allowed by applicable law.
89 Preservation of rights; return
of Insurance Benefit
a. Paying an Insurance Benet under this Policy
does not affect our rights against the
Borrower or anyone else who has made a
misrepresentation.
b. If we pay any Insurance Benet and within
180 days thereafter we determine that the
Insurance Benet should not have been paid
because a condition precedent to submitting
the Claim or paying the Insurance Benet
was not satised or we miscalculated the
amount of the Insurance Benet, then within
60 days of such determination the Servicer or
the GSE Beneciary (if the GSE Beneciary
elected to receive the Insurance Benet)
shall repay the Insurance Benet or the
excess amount, as applicable.
90 YOUR RIGHTS AFTER A CLAIM
91 Right to appeal
You have the right to appeal any Claim curtail-
ment, Claim denial, Certicate cancellation or
rescission within 90 days of our decision. If your
request for reconsideration, and all information
37
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
required under our Servicing Guide is not
submitted within such 90-day period, your
request will be denied. If you appeal before the
deadline, we will reach a decision within 90 days
after we receive your appeal.
92 Reinstatement after appeal
If as a result of your appeal we reverse our
decision to deny or curtail a Claim that is a
Perfected Claim, or cancel or rescind coverage,
we will (i) in the case of Claim denial or curtail-
ment of a Perfected Claim pay any additional
Insurance Benet due within 10 business days of
our determination to reverse our initial Claim
decision, and (ii) in the case of a cancellation or
rescission, reinstate coverage on the Certicate.
If a Claim pending at the time of the cancella-
tion or rescission of coverage was a Perfected
Claim, the reinstatement date will be considered
the new Perfected Claim Date and we will then
settle the Claim within the Claim Settlement
Period determined on the basis of the new
Perfected Claim Date. A Claim that was not a
Perfected Claim at the time of the denial or
rescission or cancellation of coverage must be
perfected upon reinstatement of coverage as
required by Sections 66, 67 and 68, as applicable.
93 Arbitration
Any dispute related to this Policy may be settled
by binding arbitration, as long as all parties
involved in the dispute agree in writing to do so,
with each party paying their own costs and for
common costs to be shared equally. If so, the
arbitration will follow the applicable rules of the
American Arbitration Association, or other rules
that all parties mutually agree to. The decision
of the arbitrators will be nal and binding, and
will be enforceable in any court in the U.S.
No party is required to submit to arbitration. A
decision made by an arbitrator will not apply to
any GSE Beneciary who had not consented in
writing to the arbitration.
94 Limitation of actions
a. Any dispute or legal action, brought by or on
behalf of the Insured, Servicer, or Beneciary
arising out of this Policy must be commenced
within two years after the right to bring the
claim, dispute, or any other legal action starts
to accrue. Such right in connection with any
Claim, coverage dispute, or Insurance Benet
starts to accrue upon the earlier of the
following: (i) our rescission or cancellation of
coverage under a Certicate; (ii) the Insured’s
acquisition of title to the Property; (iii) the
closing of a Third-Party Sale; (iv) our denial
of a Claim; or (v) our payment of any
Insurance Benet. Such right in connection
with any event that is unrelated to any Claim,
coverage dispute, or Insurance Benet starts
to accrue at the time that the event that
caused an alleged liability is deemed to have
occurred. Any dispute or legal action arising
out of this Policy commencing after the two
year limitation of actions period will be
barred as untimely.
b. However, you cannot initiate any legal action
related to a Claim until the Claim Settlement
Period has ended, unless the action is related
to a rescission of coverage.
c. In the case of rescission, cancellation of
coverage, denial of a Claim, or a reduction
of the Claim Amount or the Insurance Benet,
the applicable two-year period will begin
on the date on which we give notice of
such action.
Cancellation
95 CANCELLATION OF LOAN
COVERAGE BY YOU
a. You may cancel coverage under a Certicate
at any time by notice to us, specifying the
reason for cancellation and the proposed
effective date of cancellation, which can be
no earlier than 45 days prior to our receipt
of the notice. Cancellation of a Certicate by
the Servicer is binding on the Beneciary
whether or not the Beneciary is notied.
The Servicer is responsible for notifying the
Beneciary of cancellation of coverage. Any
Default that occurs after cancellation of
coverage under a Certicate will not be
covered under this Policy.
38
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
b. Cancellation of coverage under a Certicate
cannot be requested unless the Insured is
the current owner of the loan or is acting on
instructions from the Beneciary. We reserve
the right to collect any unpaid or deferred
premiums due at the time of cancellation.
c. Cancellation of coverage under any
Certicate will not cancel this Policy.
d. You agree that you will not sell a loan for
which coverage under a Certicate has been
cancelled with any implication that it is still
covered under this Policy. In addition, you
agree not to misrepresent the fact that
coverage under a Certicate has been
modied or cancelled.
96 Refund of premium
a. If you cancel coverage under a Certicate
with a refundable premium plan, we will
refund the applicable portion based on
our refund schedule, which is posted on
our website.
b. No premium will be refunded:
i. if a notice of Default was submitted
before cancellation of coverage, unless
you waive your right to any Insurance
Benet under the Certicate for the
loan; or
ii. if it applies to the period more than
45 days before the date we received
your notice of cancellation. If we do not
receive your notice within 45 days of
any required cancellation or termination
date, you will be responsible to return to
the Borrower any premium paid to us for
the period more than 45 days before the
date we received your notice, in addition
to any refunded premium you received
from us, if applicable.
39
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
Annex A
State Variations
If, on the effective date of this Policy, the initial
Insured’s principal place of business is located in one
of the jurisdictions listed below, the provisions listed
below identied for such jurisdiction shall apply.
1. Alaska
a. The denition of “Claim Settlement Period” is
modied to read as follows:
“ ‘Claim Settlement Period’ means the 30 days
following the Perfected Claim Date, except
as described in Sections 67(e), 74(b), and
77(a) of this Policy.”
b. Section 5(a) is modied to read as follows:
“This Policy will be governed, interpreted, and
enforced by and in accordance with the laws
of the State of Alaska, without regard to
conict-of-law principles therein or to the
location of the Property.”
c. The following is added as the second
paragraph to Section 7(a) as follows:
Except as otherwise specied in this Policy,
all notices to the Insured or Third-Party
Beneciary shall be given to the Servicer, and
shall be either (1) mailed by rst class mail to
the last known address of the Insured and
obtain a certicate of mailing from the
United States Postal Service: or (2)
transmitted by electronic means, to the last
known electronic address of the intended
recipient, if the Company can obtain an
electronic conrmation of receipt by the
intended recipient.
d. Section 16(c) is modied to read as follows:
“ If we rescind coverage under a Certicate,
the rescission notice will be effective 60
days after we give notice, or 10 days after
we give notice if our decision to rescind
relates to a Single Loan Fraud (other than
by the Borrower), and in either case we will
refund all premium paid on the Certicate
in accordance with our Servicing Guide. Our
right to rescind coverage under a Certicate
is subject to the provisions of Section 17.”
e. The second paragraph of Section 47 is hereby
deleted and replaced with the following:
If you are aware of a dispute relevant to any
loan or the applicable Property, you must
notify us. We have the right to direct you to
commence legal action if we determine that
it is necessary to protect our rights, but if we
so direct, then we will pay the expenses for
such legal action; provided, however, that this
paragraph shall not apply to Appropriate
Proceedings.
f. Section 65 is modied to read as follows:
“ If you do not le a Claim by the deadline
stated in Section 64, we are not obligated
to include in the Claim Amount any interest
accrued or Advances you paid after the
deadline passed. If the Claim is submitted
more than 120 days after the expiration of
the deadline stated in Section 64, then we
may deny the Claim if we are prejudiced
by the late submission.”
g. Section 67(b) is modied to read as follows:
“ If we have not received information we
requested after 30 days, we will send you
a reminder. Further, we will provide the
Beneciary with a copy of such reminder
if requested by the Beneciary. If a Claim is
not perfected within 120 days of the Claim
ling date, unless we and the Beneciary
have agreed to an extension or an extension
is required by applicable law or an extension
is expressly provided for under the terms of
this Policy in Sections 67(d), 68(a) or 68(b),
we will deny the Claim on that basis if we
are prejudiced by such delay.”
h. Section 85(a) is modied to read as follows:
“ The Servicer or Beneciary will be entitled
to submit a supplemental Claim for
allowable Advances actually paid by the
Servicer or Beneciary if such Advances
were (1) incurred prior to the date the
initial Claim was submitted, but not
included in the initial Claim or (2) incurred
40
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
after the date the initial Claim was
submitted and during any period for which
accrued and unpaid interest would be
included pursuant to the applicable Claim
settlement option as described in Section
71(b), or as described in our Servicing Guide.
Nothing herein will be deemed to entitle
the Servicer or Beneciary to seek a
supplemental or additional payment of
anything other than such Advances. If the
supplemental Claim for Advances and all
required documentation related thereto are
submitted within 90 days after payment of
an Insurance Benet, we will pay any
amounts due within 30 days of our receipt
of a true and complete supplemental Claim.
If the Insurance Benet is calculated
pursuant to the Percentage Option, the
Percentage Option will also be used to
calculate the amount of any benet payable
under the supplemental Claim. No exclusion
or deduction that reduced the Claim
Amount or Insurance Benet paid on the
initial Claim shall be included in any
supplemental Claim.”
i. Section 93 (Arbitration) is hereby deleted.
2. Arkansas
a. Section 93 (Arbitration) is hereby deleted.
3. Connecticut
a. Section 3(a) is modied to read as follows:
“ This Policy applies to all Commitments
and Certicates issued under the Policy
on or after the effective date of the Policy.
This Policy will remain in effect until it is
cancelled. This Policy may be cancelled by
the initial Insured upon 10 days’ prior notice
or by us in accordance with, and upon such
prior notice as is required by, the provisions
of the Connecticut General Statutes, Section
38a-324. If this Policy is cancelled, the
Policy will remain in effect with respect to
any Commitment or Certicate issued
before cancellation, provided that all
required premiums are paid.”
4. District of Columbia
a. Section 93 (Arbitration) is hereby deleted.
5. Georgia
a. Section 3(a) is modied to read as follows:
“ This Policy applies to all Commitments
and Certicates issued under the Policy
on or after the effective date of the Policy.
This Policy will remain in effect until it is
cancelled. This Policy may be cancelled
by the initial Insured for any reason or no
reason, or by us for any reason or no reason
upon 45 days’ prior notice, or as otherwise
required by applicable law. If this Policy is
cancelled, the Policy will remain in effect
with respect to any Commitment or Certi-
cate issued before cancellation, provided that
all required premiums are paid.”
b. Section 5(a) is modied to read as follows:
“This Policy will be governed, interpreted,
and enforced by and in accordance with the
laws of the State of Georgia, without regard
to conict-of-law principles therein or to the
location of the Property.”
c. Section 5(c) (Jury Waiver) is hereby deleted.
d. Section 93 (Arbitration) is hereby deleted.
6. Illinois
a. Section 3(a) is modied to read as follows:
“ This Policy applies to all Commitments
and Certicates issued under the Policy
on or after the effective date of the Policy.
This Policy will remain in effect until it is
cancelled. This Policy may be cancelled
by the initial Insured for any reason or no
reason upon 10 days’ prior notice or by us
upon not less than 60 days’ prior notice and
in accordance with the provisions of 215
ILCS 5/143.16 and 5/143.16a. If this Policy
is cancelled, the Policy will remain in effect
with respect to any Commitment or Certi-
cate issued before cancellation, provided
that all required premiums are paid.”
41
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
b. The following notice is added to the Policy:
“Should any complaint arise regarding this
insurance, the Insured may contact the
Company’s Chief Compliance Ofcer, 2100
Powell Street, 12th Floor, Emeryville,
California 94608. Part 919 of the Rules of
the Illinois Department of Insurance requires
that our Company advise you that, if you
wish to take this matter up with the Illinois
Department of Insurance, it maintains a
Consumer Division in Chicago at 122 S.
Michigan Ave., Chicago, Illinois 60603 and in
Springeld at 320 West Washington Street,
Springeld, Illinois 62767. You may also
contact the Department via their website at
http://insurance.illnois.gov or by phone at
312-814-2420 or 217-782-4515.”
c. Section 5(a) is modied to read as follows:
“This Policy will be governed, interpreted,
and enforced by and in accordance with the
laws of the State of Illinois, without regard
to conict-of-law principles therein or to the
location of the Property.”
d. Insolvency or bankruptcy of the Insured shall
not release us from our duties to pay a valid,
Perfected Claim with respect to a Certicate
under this Policy.
7. Kansas
a. Section 3(a) is modied to read as follows:
“ This Policy applies to all Commitments and
Certicates issued under the Policy on or
after the effective date of the Policy. This
Policy will remain in effect until it is
cancelled. This Policy may be cancelled
by the initial Insured for any reason or no
reason upon 10 days’ prior notice or by us
upon not less than 30 days’ prior notice and
in accordance with the provisions of the
Kansas Insurance Code, Section 40-2, 120.
If this Policy is cancelled, the Policy will
remain in effect with respect to any
Commitment or Certicate issued before
cancellation, provided that all required
premiums are paid.”
b. Section 5(a) is modied to read as follows:
“This Policy will be governed, interpreted,
and enforced by and in accordance with the
laws of the State of Kansas, without regard
to conict-of-law principles therein or to the
location of the Property.”
8. Maine
a. Section 3(a) is modied to read as follows:
“This Policy applies to all Commitments and
Certicates issued under the Policy on or
after the effective date of the Policy. This
Policy will remain in effect until it is
cancelled. This Policy may be cancelled by
the initial Insured or by us for any reason or
no reason upon 10 days’ prior notice or as
otherwise required by applicable law. If this
Policy is cancelled, the Policy will remain in
effect with respect to any Commitment or
Certicate issued before cancellation,
provided that all required premiums are paid.
Further to the terms of this Section 3(a), the
State of Maine, pursuant to Title 24-A M.R.S.
Sec 2908(2), requires the following list of
reasons to which a Policy may be cancelled
to be stated in the Policy:
i. Nonpayment of premium;
ii. Fraud or material misrepresentation
made by or with the knowledge of the
named insured in obtaining the policy,
continuing the policy or in presenting a
claim under the policy;
iii. Substantial change in the risk which
increases the risk of loss after insurance
coverage has been issued or renewed,
including, but not limited to, an increase
in exposure due to rules, legislation or
court decision;
iv. Failure to comply with reasonable loss
control recommendations; and
v. Substantial breach of contractual duties,
conditions or warranties.
Notwithstanding the foregoing, the Policy
will only be canceled by us pursuant to the
rst paragraph of this Section 3(a) and other
terms and conditions of the Policy.”
42
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
b. Section 93 (Arbitration) is hereby deleted.
9. Maryland
a. Section 3(a) is modied to read as follows:
“ This Policy applies to all Commitments
and Certicates issued under the Policy
on or after the effective date of the Policy.
This Policy will remain in effect until it is
cancelled. This Policy may be cancelled
by the initial Insured for any reason or no
reason upon 10 days’ prior notice or by us
for any reason or no reason upon 45 days’
prior notice, or as otherwise required by
applicable law. If this Policy is cancelled,
the Policy will remain in effect with respect
to any Commitment or Certicate issued
before cancellation, provided that all
required premiums are paid.”
10. Michigan
a. This Policy is exempt from the ling
requirements of section 2236 of the
insurance code of 1956, 1956 PA 218,
MCL 500.2236.
11. Missouri
a. Section 65 is modied to read as follows:
“ If you do not le a Claim by the deadline
stated in Section 64, we are not obligated
to include in the Claim Amount any interest
accrued or Advances you paid after the
deadline passed. If the Claim is submitted
more than 120 days after the expiration of
the deadline stated in Section 64, then we
may deny the Claim if we are prejudiced by
the late submission.”
b. Section 5(a) is modied to read as follows:
“This Policy will be governed, interpreted,
and enforced by and in accordance with the
laws of the State of Missouri, without regard
to conict-of-law principles therein or to the
location of the Property.”
c. Section 93 (Arbitration) is hereby deleted.
12. Montana
a. Section 5(a) is modied to read as follows:
“This Policy will be governed, interpreted,
and enforced by and in accordance with the
laws of the State of Montana, without regard
to conict-of-law principles therein or to the
location of the Property.”
b. Section 5(c) (Jury Waiver) is hereby deleted.
c. Section 93 (Arbitration) is hereby deleted.
13. New York
a. Section 5(a) is modied to read as follows:
“This Policy will be governed, interpreted, and
enforced by and in accordance with the laws
of the State of New York, without regard to
conict-of-law principles therein or to the
location of the Property.”
14. North Dakota
a. Section 3(a) is modied to read as follows:
“This Policy applies to all Commitments and
Certicates issued under the Policy on or
after the effective date of the Policy. This
Policy will remain in effect until it is
cancelled. This Policy may be cancelled by
the initial Insured for any reason or no
reason upon 10 days’ prior notice, or by us
upon not less than 30 days’ prior notice for
the following reasons:
i. nonpayment of premium; or
ii. misrepresentation or fraud made by
or with the knowledge of the Insured
in obtaining coverage or in pursuing a
Claim under this Policy; or
iii. actions by the Insured that have
substantially increased or substantially
changed the risk insured; or
iv. refusal of the Insured to eliminate
known conditions that increase the
potential for loss after notication by us
that the condition must be removed; or
43
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
v. substantial change in the risk assumed,
except to the extent that we should
reasonably have foreseen that change
or contemplated the risk in writing the
contract; or
vi. a determination by the insurance
commissioner that the continuation of
the coverage could place us in violation
of the insurance laws of North Dakota.
Any cancellation notice from us will include
a specic explanation of the reason for
cancellation.
If this Policy is cancelled, the Policy will
remain in effect with respect to any
Commitment or Certicate issued before
cancellation, provided that all required
premiums are paid.”
b. Section 5(a) is modied to read as follows:
“This Policy will be governed, interpreted,
and enforced by and in accordance with the
laws of the State of North Dakota, without
regard to conict-of-law principles therein or
to the location of the Property.”
15. Oklahoma
a. WARNING: Any person who knowingly, and
with the intent to injure, defraud or deceive
any insurer, makes any claim for the proceeds
of an insurance policy containing any false,
incomplete or misleading information is
guilty of a felony.
b. Section 5(a) is modied to read as follows:
“This Policy will be governed, interpreted,
and enforced by and in accordance with the
laws of the State of Oklahoma, without
regard to conict-of-law principles therein or
to the location of the Property.”
c. Section 93 (Arbitration) is hereby deleted.
16. Oregon
a. Section 5(a) is modied to read as follows:
“This Policy will be governed, interpreted,
and enforced by and in accordance with the
laws of the State of Oregon, without regard
to conict-of-law principles therein or to the
location of the Property.”
b. Section 5(c) (Jury Waiver) is hereby deleted.
17. South Dakota
a. Section 3(a) is modied to read as follows:
“ This Policy applies to all Commitments
and Certicates issued under the Policy
on or after the effective date of the Policy.
This Policy will remain in effect until it is
cancelled. This Policy may be cancelled
by the initial Insured for any reason or no
reason upon 10 days’ prior notice or by us
upon not less than 20 days’ prior notice
and in accordance with the provisions
of the South Dakota Insurance Code,
Section 58-33-61. If this Policy is cancelled,
the Policy will remain in effect with respect
to any Commitment or Certicate issued
before cancellation, provided that all
required premiums are paid.”
18. Texas
a. It is hereby understood and agreed that we
may not cancel or refuse to renew this Policy
or a Certicate based solely on the fact that
the Insured is an elected ofcial.
b. The following notice is added to the Policy:
“TEXAS DISCLOSURE OF GUARANTY FUND
NON-PARTICIPATION: In the event the
Company is unable to fulll its contractual
obligation under this Policy or contract or
application or Certicate or evidence of
coverage, the policyholder or
certicateholder is not protected by an
insurance guaranty fund or other solvency
protection arrangement.”
c. Section 5(a) is modied to read as follows if
an Insurance Benet is payable to a citizen
or inhabitant of Texas:
“This Policy will be governed, interpreted
and enforced by and in accordance with the
laws of the State of Texas, without regard to
conict-of-law principles or to the location
of the Property.”
44
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
19. Utah
a. Section 65 is modied to read as follows:
“ If you do not le a Claim by the deadline
stated in Section 64, we are not obligated
to include in the Claim Amount any interest
accrued or Advances you paid after the
deadline passed. If the Claim is submitted
more than 120 days after the expiration of
the deadline stated in Section 64, then we
may deny the Claim. Notwithstanding the
foregoing, your failure to le a Claim within
the time period required under this Section
will not invalidate such Claim if you show
that it was not reasonably possible to le
the Claim within the prescribed time and
that the Claim was led as soon as
reasonably possible.”
20. Virginia
a. Section 5(a) is modied to read as follows:
“This Policy will be governed, interpreted,
and enforced by and in accordance with the
laws of the State of Virginia, without regard
to conict-of-law principles therein or to the
location of the Property.”
b. Section 93 (Arbitration) is hereby deleted.
c. Section 5.c Jury Waiver is hereby deleted.
21. Limitation of actions
Notwithstanding the provisions of Section 94
(Limitation of actions), if upon the issuance of
this Policy, the principal business address of the
initial Insured is located in, and this Policy is
governed by the law of, the state indicated
below, then the following shall apply:
a. Alaska, Maryland, Mississippi, North Carolina,
and Utah: The 2-year period described in
Section 94 is extended to three (3) years.
b. Florida; and Kansas: The 2-year period
described in Section 94 is extended to ve
(5) years.
c. Michigan and South Dakota: The 2-year
period described in Section 94 is extended
to six (6) years.
d. Missouri: The 2-year period described in
Section 94 is extended to ten (10) years.
e. Arkansas: The 2-year period described in
Section 94 is changed to “as required by law.”
f. Texas: The 2-year period described in
Section 94 is extended to two (2) years
and one (1) day.
g. Illinois: The 2-year period described in
Section 94 is extended by the number of
days equal to the number of days between
the date the Insured presents a Perfected
Claim to us with respect to a Certicate and
the date we issue a claim denial with respect
to such Certicate.
45
NATIONAL MORTGAGE INSURANCE CORPORATION | MASTER POLICY
AS08.12.01_01.22
USMI-001 (03/20)
