We have a borrower with 2 loans and 2 separate pieces of collateral. We received a dec page from the insurance company, but they erroneously put the incorrect collateral description and we moved our tickler to a future date based on this.
During this time, the hazard policy lapsed due to non-payment (June 2016) , because our tickler now had the incorrect date (Jan 2017) and we didn't payout.
Now this has been discovered, I'm trying to figure out if we have to a) FP the hazard insurance, pay out of pocket from the cancellation date to today and move on, b) or if we can or should charge the borrower for it, or c) if it matters now because there have been no losses.
it's also a FNMA loan if that adds any complexity. I know if it were flood we would have to FP because we need continued coverage, just not so sure about the hazard. The Ins co also couldn't explain how or why they made that error with the collateral description on the dec page.