Alert April 02, 2013

FHFA Issues Proposal Placing Restrictions on Force-Placed Insurance

The FHFA issued a proposal to ban mortgage sellers and servicers from receiving commissions or other remuneration associated with maintaining force-placed insurance with certain insurers and from receiving reinsurance premiums through a reinsurance entity affiliated with the seller or servicer. The FHFA is targeting these practices because it has determined such practices "pose risks to [Fannie Mae and Freddie Mac]." Comment must be received by May 28, 2013.