Fannie Mae released a servicing guide announcement on March 14, 2012, updating its lender-placed (or force-placed) insurance requirements.

“Many borrowers are experiencing significantly increased costs for lender-placed hazard insurance premiums,” the announcement said. “Not only are lender-placed hazard insurance premiums more expensive than borrower-purchased hazard insurance premiums, but the cost of lender-placed policies may impact the borrowers’ ability to reinstate their delinquent mortgage loans.”

Fannie Mae said the purpose of the announcement was to amend and clarify its policies regarding force-placed insurance.

The announcement focused on a number of topics including:

• Lender-placed insurance coverage amount and deductible requirements;
• Borrower communications;
• Acceptable lender-placed insurance carriers;
• Lender-placed hazard and flood insurances losses;
• Acceptable lender-placed insurance costs and insurance tracking fees; and
• Hazard insurance claims and remittances to Fannie Mae.

Fannie Mae plans to add the announcement requirements as new sections in Part II, Chapter 6 of its Servicing Guide. The new requirements will be effective no later than June 1.