Bringing Back Non-QM

Litigation Guard, LLC and Bankers Insurance Service (BIS) have launched an online product for lenders that seeks to revitalize lending in the non-QM market. Litigation Guard and BIS are providing a technology and insurance solution that is aimed at reducing lender risk by providing a valuable defense against “Ability-To-Repay” claims, while also educating borrowers on the mortgage process and terms of their loans.

Litigation Guard provides third-party verification that borrowers have the ability to repay their loans. Litigation Guard uses a proprietary algorithm, along with online assessments, educational videos and other web-based tools that mortgage originators use during the underwriting approval process. This verification system, which takes only minutes for the borrower to complete, gives the mortgage originator confidence that the borrower has the ability to repay the loan and is educated on the mortgage lending process. Importantly, once the loan receives an approval from Litigation Guard and the loan closes, unique E&O insurance applies.

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The insurance program will be administered by BIS, coverholder at Lloyd’s, and underwritten by certain underwriters at Lloyd’s.

Christopher Tiso, Litigation Guard’s CEO, stated, “Our company pioneered technology that reduces the biggest legal risk in non-QM lending. Backing our product with innovative E&O insurance that is underwritten and placed by two pillars in the industry who have been insuring the mortgage lending industry for sixty-plus years is the perfect complement to our product offering.”

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“We are thrilled to be able to place innovative E&O insurance behind Litigation Guard’s cutting edge and robust online risk management tool,” said Tom Delaney, BIS’ Managing Director.

The firms will work together over the coming months to provide clients with tools that will protect both loan originators and investors in the non-QM lending space.

By bringing together these respected firms and approaching risk management challenges from an educational and technology-minded vantage point, mortgage lenders will be able to enter the non-QM lending space equipped with a new tool that will help them manage their exposure to third party liability.

About The Author

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Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.