Fannie Mae permits servicers to solicit borrowers for MI termination based on current property value

Applies to: Conventional loans serviced for Fannie Mae with mortgage insurance that may be close to or have reached the LTV requirements for termination based on current property value.

Addressed to

All Fannie Mae Single-Family Servicers

Investor

Fannie Mae

Programs

Conventional

Affected areas

Mortgage insurance termination; Mi terminationGuide Section B-8.1-04

Affected documents

MI termination borrower notice

Applicability confidence

Verified: every row above is supported by the source text

What to review: No change is mandatory, so first review Servicing Guide B-8.1-04 to decide whether to use the option, effective immediately, to proactively solicit borrowers on conventional loans serviced for Fannie Mae whose loans may be close to or have reached the LTV requirements for MI termination based on current value, and to notify them of the actions required.

QC implications

• If a servicer chooses to solicit borrowers, QC may sample those solicitations to confirm they went to borrowers whose conventional loans may be close to or have reached the LTV requirements for MI termination based on current value.
• If a servicer chooses to solicit borrowers, QC may check that the notices tell borrowers the actions required to terminate MI, as listed in Servicing Guide B-8.1-04.
• Because the change is optional, QC should not treat a servicer's decision not to solicit as a defect.