Job Loss Protection (JLP) = Financial Crisis “First Responder”
The number one reason people fail to meet their financial obligations is the loss of their job or a drastic curtailment of income. Job losses are the first casualty in economic downturns and the employment landscape has changed like no other time in recent history. In the last recession period, the mortgage industry was the biggest looser with nearly 70% of all loan delinquencies and defaults resulting from homeowner job losses.
It is no surprise that lenders, servicers, investors and consumers are looking for ways to protect mortgages and other consumer obligations during borrower job losses during economic downturns. There’s great news: We have the best credit enhancement that directly addresses the number one cause of defaults: A JOB LOSS!
Job Loss Protection is synonymous with “homeowner protection”. Think of JLP as a “first responder” to a homeowner financial crisis caused by a job loss! JLP is the first to step in to make timely and consistent monthly payments —- before the homeowner’s credit is impaired for missed payments. Those critical payments during a job loss helps borrowers stay credit-worthy and have continued access to credit.
Unlike most traditional insurance products, JLP is a lender paid, non-contributory B-2-B Master Policy covering the loan parties’ interest (lenders, Servicers, investors) and to manage risk associated with defaults.
PROTECTION FOR LENDERS, SERVICERS, INVESTORS
Job Loss Protection adds Consumer Confidence! With job loss protection included in lender mortgage services, consumers are more confident in their decision to buy! They feel more secure knowing their lender provided security against foreclosure if they lost their job. Lenders can also eliminate consumer hesitation in a weak employment climate.
Furthermore, job loss protection provides additional security to reduce account delinquency and default costs that would otherwise compromise cash flow, and affect the long-term financial security of your business.
• Increase market liquidity
• Manages Lender risk during Representations and Warrant period
• Strengthens loan quality
• Strengthens Servicer quality, manages Servicer risk
• Strengthens MBS quality
• Optimizes loan performance