Common use of Servicing and Administration of Mortgage Insurance Policies Clause in Contracts

Servicing and Administration of Mortgage Insurance Policies. (a) With respect to each Mortgage Loan covered by a PMI Policy, the Servicer shall, without any cost to the Owner, maintain or cause the Mortgagor to maintain in full force and effect such PMI Policy and shall pay or shall cause the Mortgagor to pay the premium thereon on a timely basis. In the event that such PMI Policy shall be terminated, the Servicer shall obtain from another Qualified Insurer a comparable replacement policy, with a total coverage equal to the remaining coverage of such terminated PMI Policy. Subject to Accepted Servicing Practices and applicable law (including the Homeowner's Protection Act of 1998, as amended, and its implementing regulations), the Servicer may cancel a PMI Policy, provided all requirements of applicable law are met for the cancellation of such policy. If the insurer shall cease to be a Qualified Insurer, the Servicer shall determine whether recoveries under the PMI Policy are jeopardized for reasons related to the financial condition of such insurer, it being understood that the Servicer shall in no event have any responsibility or liability for any failure to recover under the PMI Policy for such reason. If the Servicer determines that recoveries are so jeopardized, it shall notify the Owner and the Mortgagor, if required, and obtain from another Qualified Insurer a replacement insurance policy. The Servicer shall not take any action which would result in noncoverage under any applicable PMI Policy of any loss which, but for the actions of the Servicer would have been covered thereunder. In connection with any assumption or substitution agreement entered into or to be entered into pursuant to Section 6.01, the Servicer shall promptly notify the insurer under the related PMI Policy, if any, of such assumption or substitution of liability in accordance with the terms of such PMI Policy and shall take all actions which may be required by such insurer as a condition to the continuation of coverage under such PMI Policy. If such PMI Policy is terminated as a result of such assumption or substitution of liability, the Servicer shall obtain a replacement PMI Policy as provided above.