The new requirements will, among other things, facilitate timely and consistent claims processing, the GSE regulator said Monday.
The new master policies address some of the gaps in the existing policies that were exposed during the foreclosure crisis by supporting loss mitigation programs that were developed to help troubled borrowers. The new policies also spell out the terms of business interactive between seller/servicers and mortgage insurers.
As previously reported, the new policies also address the insurers rescission practices.
The new standards update and clarify the responsibilities of insurers, originators and servicers, and they enhance the insurance protection provided to Fannie Mae and Freddie Mac, said FHFA acting director Edward DeMarco.
The private MI companies will submit the master policies to state insurance commissioners for approval.
Mortgage Guaranty Insurance Corp. senior vice president Mike Zimmerman says the updated master policy resulted from a collaborative process and addresses the rights and responsibilities of the servicers, GSEs and MIs. We believe the new policy will provide clarity for how mortgage insurance can continue to support a robust mortgage market.
Meanwhile, the GSEs will provide guidance to lenders and servicers regarding the effective dates of the new master policies.
We look forward to working with our servicers and the nation’s mortgage insurers as they adopt the new master policy, according to Paige Wisdom, executive vice president and chief risk officer at Freddie Mac.