F-1-02, Escrow, Taxes, Assessments, and Insurance (12/20/2023)
Introduction
This Servicing Guide Procedure contains the following:
- Instructing Mortgage Insurers to Release Data
- Notifying Fannie Mae of Mortgage Insurance Rescissions, Claim Denials, or Cancellations
- Ordering Property Values for Mortgage Insurance Termination
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 .
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.
|
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 .
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. |
|
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 .
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 | $190 |
| Restricted appraisal one-unit | $450 |
| 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.
Recent Related Announcements
The table below provides references to recently issued Announcements that are related to this topic.
| Announcements | Issue Date |
|---|---|
| December 20, 2023 | |
| December 21, 2022 | |
| Announcement SVC-2022-07 | October 12, 2022 |
| Announcement SVC-2021-09 | December 8, 2021 |
| Announcement SVC-2021-08 | November 17, 2021 |
