Servicing Contractors
The Servicing Contractors Rider extends the definition of “Employee” under the Fidelity coverage (Insuring Agreement A) to include servicing contractors. A servicing contractor is a person, partnership, or corporation (other than a financial institution employee) authorized to:
| 1. |
Collect and record real estate mortgage or home improvement loan payments; |
| 2. |
Establish tax and insurance escrow accounts; |
| 3. |
Manage real property owned, supervised, or controlled by the financial institution; or |
| 4. |
Perform other acts related to the above activities. |
Coverage is provided for losses resulting from dishonest or fraudulent acts committed with intent to cause a loss to the financial institution and to gain a financial benefit for the servicing contractor or another. Coverage includes loss due to a contractor’s failure to forward funds collected on behalf of the financial institution, provided that the contractor is legally obligated to do so. This rider does not provide coverage for losses resulting from a contractor’s failing to collect funds; a contractor’s insolvency or bankruptcy; or loans to servicing contractors.