FNMA SVC 2012-17 Updates to Hazard Insurance Coverage Policy

On August 22, Fannie Mae issued Announcement SVC 2012-17, entitled Updates to Hazard Insurance Coverage Policy.

Updates to Hazard Insurance Coverage Policy

In Servicing Guide Announcement SVC-2012-04, Updates to Lender-Placed Property Insurance and Hazard Insurance Claims Processing, Fannie Mae amended and clarified its policies regarding lender-placed property insurance and hazard insurance claims processing. Fannie Mae is providing additional guidance to servicers regarding the continuation or cancellation of hazard insurance coverage.

Hazard Insurance Coverage

Servicing Guide, Part VIII, Section 113: Hazard Insurance Coverage

Currently, Fannie Mae instructs servicers to cancel hazard insurance coverage within 14 days after the foreclosure sale. Effective October 1, 2012, servicers must cancel hazard insurance coverage within 14 days after the property has been inspected and is confirmed vacant by the broker, agent, or property management company Fannie Mae may designate to perform post-foreclosure property inspections.

Fannie Mae will provide the vacant property report through HomeTracker®. If the servicer has not acquired access to HomeTracker, instructions (How to Obtain Access to HomeTracker) are available on eFannieMae.com.

If the subject property is located in a redemption state, the servicer must cancel hazard insurance coverage once the redemption period has expired and the property is reported vacant.

If the servicer cancels the insurance policy prematurely and damages are found, the servicer will be required to make Fannie Mae whole for any losses or fees relating to the property damages.

Servicers should contact their Servicing Consultant, Portfolio Manager, or Fannie Mae’s National Servicing Organization’s Servicing Solutions Center at 1-888-FANNIE5 (1-888-326-6435) with any questions regarding this Announcement.

To view the online Announcement, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees  and a handful of contractors performing services in the Midwest, to a national company with nearly 1,000 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

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