Fannie Mae: Changes Coming For Vacant Properties With Hazard Coverage

Fannie Mae, the leading provider and giant in residential mortgages issued Servicing Guide Announcement SVC-2013-04 on March 6. The announcement covers unoccupied homes and forces servicers to discontinue, both borrower and lender-placed, policies for hazard insurance within fourteen days of being listed on HomeTracker in a Vacancy Report.  HomeTracker is a widely used real estate management software that’s become the most accepted throughout the industry for property management; a home’s vacancy date can be found in the field report. This announcement will affect all loans with foreclosure sales that are set to happen on or after October 1, 2012. If properties are foreclosed on after the set date and still have hazard insurance, their policies are to be cancelled by the servicer before March 20, 2013 at the latest. The date of cancellation is important to the servicers because Fannie Mae has made clear that it should not be discontinued prematurely. No homes are to be grandfathered into the new regulations and if damages are found after the fact, the servicing company will be held responsible for repayment of losses and fees related to property damage.

Changes Coming For Vacant Properties With Hazard Coverage:

What does this mean for you? Well in essence, if you own a home secured with a Fannie Mae loan, and it is vacant, once it hits this Vacancy Report, forced-placed insurance must be cancelled by the servicer. The ground breaking announcement will save borrowers hundreds of millions of dollars on force-placed insurance moving forward.

What is force-placed insurance? Force-placed insurance protects the banks when financially troubled homeowners allow their hazard insurance to lapse. Banks then bill homeowners for the premiums which usually cost way more than their own policies, making their payment sky rocket or adding thousands to their principal balance. Fannie Mae has been working with providers and knows that the policy will be welcomed by homeowners across the country as a way to reduce any future expenses or stop current expenses should they currently be in a force-placed insurance situation.

RKE Law Group has been thoroughly briefed on forced-placed insurance and is familiar with Fannie Mae and the clauses of the new announcement. One of the expert foreclosure attorneys at RKE will be happy to sit down with you and discuss your insurance policy and how the announcement affects you as a property owner. Call the offices in either the Miami or Hallandale Beach location to speak with an attorney during a free consultation with no obligations. Whether you need help implementing the policy or you’re being treated unfairly, RKE Law Group will represent you with the expertise and respect you deserve.




The Servicing Guide Announcement was put in place with the hopes of saving property owners of vacant homes money and to avoid balance increases on their principal owed amount. Keep in mind the dates that the announcement goes into effect and cancel policy additions accordingly. No further action is required on your end from this point forward. 

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