The Federal Housing Finance Agency's (FHFA) 2013 Conservatorship Scorecard (Performance Goals) included the following objective: "Develop counterparty risk management standards for mortgage insurers that include uniform master policies and eligibility requirements."
Today, the FHFA announced that Fannie Mae and Freddie Mac have completed a major overhaul of their private mortgage insurance master policy requirements. Among other things, the new changes: 1) require that master policies support various loss mitigation strategies that were designed to help homeowners after the 2008 financial crisis, 2) establish specific timeframes for processing claims; 3) set standards for determining when coverage under the mortgage insurance policy must be maintained, and 4) promote information sharing among mortgage insurers, servicers, and Fannie Mae and Freddie Mac.
Freddie Mac has confirmed that the mortgage insurance companies with which it does business have included the new requirements in their master policies. In the coming weeks, Fannie Mae and Freddie Mac are expected to provide additional guidance to lenders and servicers regarding specific effective dates. ABIA will provide updates on how these new requirements will impact our members, please continue to watch the Bank Insurance Connection for updates.
ABIA will be hosting a Washington Forum for all interested in learning more about the legislative and regulatory issues that affect your institution. Save the date - February 26, 2014.