Mortgagee clause and ISAOA/ATIMA: how to write it so the lender accepts it
It is four lines on a binder, and it stalls more closings than the premium does. Here is what each line means, where the right wording comes from, and what happens when it is wrong.
The short answer
A mortgagee clause is the part of a homeowners policy that names the lender and protects its interest in the house. It is written as the lender's legal name, the phrase ISAOA/ATIMA, the lender's insurance mailing address and the loan number, and it has to match what the lender asked for, character for character.
ISAOA stands for its successors and/or assigns, and ATIMA for as their interests may appear. They matter because most loans are sold or change servicers after closing. Fannie Mae's guide requires the lender's name followed by its successors and/or assigns, so the coverage follows the loan instead of staying with the original lender.
Most rejected binders fail on small things: a branch address instead of the insurance center, a missing loan number, a shortened company name or a named insured that does not match the title. The fix is procedural. Ask the lender for the exact clause and send it with the binder request, weeks before closing.
Fannie Mae — Selling Guide B7-3-08
Washington Legislature — RCW 48.18.230
CFPB — 12 CFR 1024.37
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What is a mortgagee clause?
A mortgagee clause is the provision in a homeowners policy that names the lender as having a financial interest in the property. If the house is damaged, the claim check is issued with the lender's name on it, and the lender is told before the policy is cancelled. It is how the house that secures the loan stays insured.
Mortgagee, loss payee and additional insured are not the same thing
They get mixed up on binder requests all the time. A mortgagee holds a lien on real property. A loss payee is the usual term for a lender on personal property, like a car. An additional insured is someone added for liability, which is a different coverage altogether and almost never what a mortgage lender is asking for.
What do ISAOA and ATIMA mean?
ISAOA means its successors and/or assigns. ATIMA means as their interests may appear. The first keeps the protection with whoever owns or services the loan in the future. The second limits each party's claim to its actual financial interest, so a lender is paid up to what is owed and the owner keeps the rest.
Why lenders insist on it
Because the loan rarely stays where it started. A mortgage closed with a local lender may be sold to an investor and serviced by a third company within months. Without the successors and assigns wording, the coverage names a company that no longer holds the loan, and the servicer cannot rely on it.
Is ISAOA/ATIMA the same as writing it out in full?
Yes. The abbreviation and the full phrase mean the same thing, and lenders accept either. What matters is using the form the lender's instructions show. If the instructions spell it out, spell it out.
How to write a mortgagee clause correctly
A correct clause has four parts in a fixed order: the lender's exact legal name, the successors and assigns wording, the lender's insurance mailing address and the loan number. Each part has a specific job, and each one is a common reason a binder comes back from underwriting with a request to fix it.
Illustration — not an actual document
The details that send a binder back
| The mistake | Why it gets rejected |
|---|---|
| A shortened or old company name | The servicer cannot match it to the loan record; banks merge and rename more often than people expect |
| The branch address instead of the insurance center | Notices and checks go to an office that does not handle them |
| No loan number | Payments and notices land in a general queue instead of the borrower's file |
| Missing ISAOA wording | The clause stops protecting the loan as soon as it is sold or transferred |
| Named insured does not match title | Fannie Mae requires all persons holding title to be named insured |
The named insured is part of the same check
Underwriting reviews the clause and the names together. If two people are taking title, both belong on the policy as named insured. A binder with only one buyer's name is a common late condition that has nothing to do with the clause itself.
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Where should the correct mortgagee clause come from?
From the lender, every time. Loan officers and processors usually include it in the insurance request or the loan conditions, and that wording should be copied exactly onto the binder. Online lists of mortgagee clauses look convenient, but they go out of date whenever a lender changes servicers or moves its insurance center.
What we ask for on a binder request
Six fields: the buyer's name and date of birth, the property address, the closing date, the loan number and the clause exactly as the lender wrote it. With those, a binder for closing can go out the same day on most files.
What happens if the mortgagee clause is wrong or missing?
Before closing, the file stalls: underwriting sends a condition back and the binder has to be reissued, which can move the closing date. After closing, the servicer may not see proof of coverage at all, and that starts the process that ends in force-placed insurance on the borrower's account.
Force-placed insurance is the expensive version of this mistake
When a servicer has no evidence of coverage, federal rules require written notice at least 45 days before it can charge the borrower, and a reminder at least 15 days before. If nothing changes, the servicer buys a policy that protects the loan and bills it to the borrower. It usually costs more and covers less of what the owner cares about.
Changing the mortgagee clause after closing
Servicing transfers are routine. When the borrower receives a notice that a new company services the loan, the policy needs that company's clause. The homeowner or the agent sends the new wording to the carrier, and the declarations page is reissued. ISAOA wording protects the loan while that happens.
Refinances work the same way
A refinance replaces the lender, so the new lender's clause goes on the policy before funding. It is the same four parts and the same check. Sending it early avoids the same last-week condition.
If you work with buyers every week
This is the problem our service for realtors and loan officers is built around. Related reading: what hazard insurance a mortgage requires, how loan officers win realtor referrals, reading the declarations page and home insurance in Washington.
Frequently asked questions
What does ISAOA ATIMA stand for?
ISAOA means its successors and/or assigns; ATIMA means as their interests may appear. Together they keep the protection with whoever owns or services the loan later, and limit each party's claim to its actual financial interest.
Who gives me the correct mortgagee clause?
The lender, through the loan officer or processor, usually in the conditions or the insurance request. Copy it exactly. Lists of mortgagee clauses online go out of date whenever a lender changes its servicer or its insurance center address.
Does the mortgagee clause appear on the declarations page?
Yes. Once the policy is issued, the mortgagee and the loan number are printed on the declarations page, and that is the document servicers check every year. On the binder they appear as additional interest before the policy exists.
Can the mortgagee clause change after closing?
Yes, whenever servicing is transferred. The new servicer sends a notice with its own clause, and the homeowner or agent asks the carrier to update it. ISAOA wording is what keeps the coverage valid in the meantime.
What is the difference between a mortgagee and a loss payee?
A mortgagee holds a lien on real property and is protected by the mortgage clause, which can pay the lender even if the owner breached the policy. A loss payee is the usual term for personal property like a car, with narrower rights.
Keep reading
Sources
- Fannie Mae Selling Guide — B7-3-08, Mortgagee Clause, Named Insured, and Notice of Cancellation Requirements — the wording the clause must use.
- Washington State Legislature — RCW 48.18.230, Binders — the 90-day limit on a binder.
- Consumer Financial Protection Bureau — 12 CFR 1024.37, Force-placed insurance — the notices before a servicer charges.
This article is general information about insurance in the state of Washington. It is not legal advice and it is not an offer of coverage. Whether a policy covers a given loss depends on its own wording, its endorsements and its exclusions; read yours, or send it to us and we will read it with you. Anel Galicia is a licensed insurance producer in the state of Washington.