If the servicer acts as a broker or agent in the sale of mortgage loan (or credit) life insurance, or similar types of insurance, to the borrower, the following apply:
• A credit life insurance policy must require separately identified premium payments on a monthly or annual basis.
• The servicer must agree to reimburse Fannie Mae for attorney’s fees or any costs that Fannie Mae incurs if it brings an action on a defaulted mortgage loan, and
- the borrower defends against Fannie Mae’s foreclosure or acts to enjoin Fannie Mae from liquidating the mortgage loan, and
- the defense or the action for injunction is based on an obligation of the servicer (as broker or agent) or the insurance carrier.
For more information please see: B-4-03, Mortgage Loan or Credit Life Insurance.