FHFA Announces Overhaul of Fannie Mae and Freddie Mac Mortgage Insurance Master Policy Requirements

FHFA Announces Overhaul of Fannie Mae and Freddie Mac Mortgage Insurance Master Policy Requirements

Washington, DC – December 2, 2013 – (RealEstateRama) — The Federal Housing Finance Agency (FHFA) today announced that Fannie Mae and Freddie Mac have completed the first major overhaul of mortgage insurance master policy requirements in many years. FHFA’s 2013 Conservatorship Scorecard calls for Fannie Mae and Freddie Mac to develop aligned requirements for master policies.

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Through this ongoing effort, Fannie Mae and Freddie Mac, with FHFA oversight, have worked with the mortgage insurance industry to address and update gaps in the existing master policy framework. The new requirements will, among other things, facilitate timely and consistent claims processing.

Key improvements include:

? Loss mitigation – requires that master policies support various loss mitigation strategies that were developed during the housing crisis to help troubled homeowners.

? Claims – establishes specific timeframes for processing claims, including requests for additional documentation.

? Assurance of coverage – sets standards for determining when, and under what circumstances, coverage under the mortgage insurance policy must be maintained and when it may be revoked.

? Enhanced communication – promotes information sharing among mortgage insurers, servicers and Fannie Mae and Freddie Mac.

“Updating the mortgage insurance master policy requirements is a significant accomplishment for Fannie Mae and Freddie Mac,” said FHFA Acting Director Ed DeMarco. “The new standards update and clarify the responsibilities of insurers, originators and servicers and they enhance the insurance protection provided to Fannie Mae and Freddie Mac, which ultimately benefits taxpayers.”

Mortgage insurance master policies specify the terms of business interaction between seller-servicers and mortgage insurers. Mortgage insurers will incorporate the aligned requirements into new master policies, which will be filed with state insurance regulators for their review and approval. FHFA, Fannie Mae and Freddie Mac anticipate that the master policies will go into effect in 2014, pending review and approval by state insurance regulators. In the coming weeks, Fannie Mae and Freddie Mac will provide guidance to lenders and servicers regarding specific effective dates.

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.
These government-sponsored enterprises provide more than $5.5 trillion in funding for the U.S. mortgage markets and financial institutions.

Contact:
Corinne Russell
(202) 649-3032

Stefanie Johnson
(202) 649-3030

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The Federal Housing Finance Agency (FHFA) was created on July 30, 2008, when the President signed into law the Housing and Economic Recovery Act of 2008.  The Act created a world-class, empowered regulator with all of the authorities necessary to oversee vital components of our country’s secondary mortgage markets – Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.  In addition, this law combined the staffs of the Office of Federal Housing Enterprise Oversight (OFHEO), the Federal Housing Finance Board (FHFB), and the GSE mission office at the Department of Housing and Urban Development (HUD).

Contact:

1700 G Street, NW
4th Floor
Washington, DC 20552
Phone: (866) 796-5595

Corinne Russell
(202) 414-6921
Stefanie Mullin
(202) 414-6376

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