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FHFA Announces Overhaul of Mortgage Insurance Master Policy Requirements

December 3, 2013

The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac have completed the first major overhaul of mortgage insurance master policy requirements in many years.

The new requirements will, among other things, facilitate timely and consistent claims processing. Key improvements include:

  • Loss mitigation – requires that master policies support various loss mitigation strategies that were developed during the housing crisis to help troubled homeowners.
  • Claims – establishes specific timeframes for processing claims, including requests for additional documentation.
  • Assurance of coverage – sets standards for determining when, and under what circumstances, coverage under the mortgage insurance policy must be maintained and when it may be revoked.
  • Enhanced communication – promotes information sharing among mortgage insurers, servicers and Fannie Mae and Freddie Mac.
“Updating the mortgage insurance master policy requirements is a significant accomplishment for Fannie Mae and Freddie Mac,” said FHFA Acting Director Ed DeMarco. “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, which ultimately benefits taxpayers.”

Mortgage insurance master policies specify the terms of business interaction between seller-servicers and mortgage insurers. Mortgage insurers will incorporate the aligned requirements into new master policies, which will be filed with state insurance regulators for their review and approval. FHFA, Fannie Mae and Freddie Mac anticipate that the master policies will go into effect in 2014, pending review and approval by state insurance regulators.



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