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F-1-02: Escrow, Taxes, Assessments, and Insurance (12/08/2021)

Introduction

This Servicing Guide Procedure contains the following:

 

Instructing Mortgage Insurers to Release Data

The servicer must provide instructions as required for an MI company to release information to Fannie Mae in accordance with  B-8.1-01, Conventional Mortgage Insurance Servicer Responsibilities.

The following table provides steps the servicer must follow when instructing the MI company to release details to Fannie Mae.

Step Servicer Action
1

Use the Mortgage Insurance Disclosure Instructions and Release Template posted on Fannie Mae’s website or any other form that is acceptable to the mortgage insurer and that results in the release of the requested data to Fannie Mae.

2

Provide the Mortgage Insurance Disclosure Instructions and Release Template (or its equivalent) to each mortgage insurer as required. Language that accomplishes the same objective may be included in any written authorization agreement between the servicer and mortgage insurer as long as it covers insured mortgage loans being serviced now or in the future by the servicer. 

Note: These instructions do not relieve the servicers of their obligation under the Selling Guide and the Servicing Guide to report mortgage insurance coverage terms completely and accurately to Fannie Mae nor do they imply the mortgage insurer rather than the servicer will be the official source of this data for Fannie Mae.

 

Notifying Fannie Mae of Mortgage Insurance Rescissions, Claim Denials, or Cancellations

The servicer must notify Fannie Mae of MI rescissions, claim denials, or cancellations for all mortgage loans in accordance with  B-8.1-01, Conventional Mortgage Insurance Servicer Responsibilities.

The following table provides steps the servicer must follow for notifying Fannie Mae of MI rescissions, claim denials, or cancellations.

If the mortgage loan is... Then the servicer must...

active

Report to Fannie Mae the Action Code 54 (MI Terminated—High Risk Loan) in the LAR that relates to the month in which the notification was received from the mortgage insurer. The Action Date must be the date of the notification received from the mortgage insurer. If the servicer cannot report the Action Code through the LAR file, then it must do so through SURF.

liquidated

Notify Fannie Mae of MI rescissions, claim denials, or cancellations by sending an email to mi_mail@fanniemae.com.

Note: Notification for active and liquidated mortgage loans must include the Fannie Mae and servicer loan numbers and a description of the rescission, mortgage insurer-initiated cancellation, or claim denial.

 

Ordering Property Values for Mortgage Insurance Termination

The servicer must cancel borrower-purchased MI at the request of the borrower in accordance with Borrower-Initiated Termination of Conventional Mortgage Insurance Based on Original Value of the Property or Borrower-Initiated Termination of Conventional Mortgage Insurance Based on Current Value of the Property, as applicable in  B-8.1-04, Termination of Conventional Mortgage Insurance.

On one-unit properties, the servicer must order an interior and exterior BPO, or appraisal if the servicer determines it is required by law, using Fannie Mae's servicing solutions system. On two- to four- unit properties, the servicer must order an interior and exterior appraisal using Fannie Mae's servicing solutions system.

The BPO or appraisal to determine the current value of the property is at the expense of the borrower and the servicer must only order the valuation after the servicer receives the applicable fee. The borrower must be charged the cost of the BPO or appraisal based on the following table.

Valuation Type Cost
BPO $150
Restricted appraisal one-unit $325
Appraisal two- to four-unit $750

If the borrower is requesting MI termination based on current value of the property because of property improvements made by the borrower since origination, the servicer must include details provided by the borrower of the property improvements to Fannie Mae.

 

Related Announcements

The following table provides references to Announcements that are related to this topic.

Announcements Issue Date
Announcement SVC-2021-09 December 8, 2021
Announcement SVC- 2021-08 November 17, 2021
Announcement SVC-2018-09 December 12, 2018
Announcement SVC-2017-03 April 12, 2017

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