Fannie Mae Announces Pending Changes for Lender Place Insurance
March 12, 2012
On March 6, 2012, Fannie Mae announced that it will soon implement policy changes to its Lender-Placed Insurance (LPI) requirements. LPI is a hazard insurance policy that is typically purchased by a mortgage servicer if a homeowner cannot provide evidence of sufficient coverage for a mortgaged property. Often, LPI policies are inordinately expensive and can be a barrier to borrowers who are seeking to cure their delinquencies and avoid foreclosure. Fannie Mae says the new policy guidelines will significantly reduce costs to homeowners, taxpayers, and Fannie Mae. Fannie Mae has also issued a request for proposals (RFP) to insurance companies in an effort to increase competition and reduce costs for LPI coverage.