Monday, February 11, 2013
FHFA Turns Down Fannie Mae on Lender Placed Insurance
The FHFA announced today it will not accept Fannie Mae's plan to create a consortium of providers of lender-placed insurance (LPI). Fannie had proposed creating a pool of low-cost insurers and sourcing coverage for LPI at a lower rate. The FHFA proposed instead an initiative to gather data on the LPI market but has not yet announced formal plans for such an initiative. ABIA wrote a letter requesting that Fannie's process be made more public and asserting that doing so "would allow Fannie Mae to pick winners and losers among insurers": "We are very concerned about the lack of transparency and the absence of public input regarding this significant initiative, particularly during this unique period of conservatorship and reshaping of the mortgage market..." Read ABIA's letter.