Where Do I Find My Mortgage Clause?

A mortgage clause is a provision within a homeowners insurance policy that protects a mortgage lender’s financial interest in a property. This clause ensures that the lender receives payment if the mortgaged property experiences significant damage or is destroyed.

What a Mortgage Clause Is

A mortgage clause, often called a “mortgagee clause” or “loss payee clause,” is a specific part of a homeowners insurance policy. Its primary function is to protect the financial institution that provided the mortgage. Since the home serves as collateral for the loan, the lender has a financial stake in the property until the mortgage is repaid. This clause safeguards the lender from financial loss if the property is damaged or destroyed by a covered event.

The clause typically names the lender as a “loss payee” or “additional insured” on the policy. In the event of a covered loss, the insurance company will directly pay the lender for their portion of the loss, up to the outstanding mortgage amount. Common elements found in these clauses include acronyms like “ISAOA” (Its Successors and/or Assigns) and “ATIMA” (As Their Interests May Appear), which allow the lender to transfer their rights if the loan is sold. Many mortgage lenders require this clause as a condition for approving a loan, securing their investment.

Where to Locate Your Mortgage Clause

The most direct place to look for your mortgage clause is within your homeowners insurance policy. The declarations page, which summarizes policy details, typically lists the mortgage lender as a mortgagee or loss payee, often including their name and address. The full text of the mortgagee clause will be found within the policy’s conditions or endorsements section.

Another significant source is the loan documents you signed at closing. While the mortgage clause is primarily an insurance provision, its requirement is stipulated in your mortgage agreement, deed of trust, or promissory note. These foundational loan documents outline the borrower’s obligations, including maintaining adequate insurance coverage that protects the lender’s interest.

You may also find relevant information through your mortgage servicer’s online portal or on recent statements. Many lenders provide access to loan documents and insurance requirements digitally, which can include details about their mortgage clause. If you cannot locate the clause through these methods, contacting your mortgage servicer or lender’s customer service directly is an effective step. They can provide the exact wording of their required mortgage clause and confirm how they are listed on your insurance policy.

Why Your Mortgage Clause Matters

The mortgage clause is important because it directly impacts how insurance claims are handled following property damage. In the event of a covered loss, the insurance payout is typically made jointly to you and your mortgage lender, or directly to the lender first. This arrangement ensures that the lender’s financial interest in the property is prioritized, allowing them to recover their investment or ensure repairs are made to protect the collateral.

This clause offers the lender protection even if the damage was intentionally caused by the homeowner, or if the homeowner’s policy would otherwise be voided. The insurance company is usually obligated to notify the lender if the insurance policy is canceled or if premiums are not paid, allowing the lender to take action to protect their interest, such as securing a new policy and adding the cost to your mortgage. While primarily for the lender’s benefit, the clause ultimately helps ensure the property is repaired, which also benefits the homeowner by maintaining the value and habitability of their home.