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Servicing Guide Updates – Hazard and Flood Insurance

Fannie Mae Servicing Guide Updates
Fannie Mae issued SVC-2024-01 Announcement on February 14th to provide clarification for the servicer’s responsibility regarding property insurance requirements along with other miscellaneous updates.


Servicer property insurance requirements**: Fannie incorporated recently issued guidance from their selling guide into servicing guide sections B-2-01, Property Insurance Requirements Applicable to All Property Types (02/14/24) and  B-2-03, Master Property Insurance Requirements for Project Developments (02/14/24).


Servicers must:

  • Have policies and procedures in place to ensure that property insurance is continuously maintained.
  • Verify at least annually that the selected insurer, policy amount, and type of coverage meet Fannie requirements.
  • Obtain lender-placed insurance in response to notification that coverage is being cancelled, non-renewed, reduced, or otherwise modified in a manner resulting in coverage that no longer meets Fannie requirements.
  • Indemnify Fannie in the event of insufficient coverage when the servicer relies on an insurance product it has selected or obtained as an alternative to obtaining a copy of the master property insurance policy to verify adequate coverage.

** Policy change applies only to Home Keeper loans and is not applicable to HECM mortgage loans. Servicers must comply with these clarified property insurance requirements as soon as possible but are required to do so for all loans with insurance policies that are renewed or obtained on or after June 1, 2024.


Flood Insurance*: Fannie incorporated previously issued temporary policies related to servicing mortgage loans requiring flood insurance in the event of a lapse of the National Flood Insurance Program. Further information can be found in the updated servicing guide section B-3-01, Flood Insurance Requirements Applicable to All Property Types (02/14/24)

*Policy change not applicable to reverse mortgage loans


Freddie Mac Servicing Guide Updates:
Freddie Mac published Freddie Mac Servicing Bulletin 2024-2 on February 14th to reiterate that Servicers must comply with the previously announced updates to  Freddie Guide Section 4703.2 and Freddie Guide Section 4703.3 for insurance policies renewed or obtained on or after June 1, 2024. The bulletin also included other miscellaneous announcements.


We encourage all clients to review the announcements and guides in their entirety for additional information and effective dates for other miscellaneous announcements.


Proctor Loan Protector’s Compliance Team is actively reviewing the updates. If Proctor provides tracking services for your entity, your relationship manager will reach out to discuss any changes that may be needed to your business rules.