© Fannie Mae Single Family Selling Guide
Overview
Lenders must follow the requirements below relative to documenting and retaining evidence of property insurance policies:
The servicer should hold individual insurance policies for first mortgages, unless the servicer is covered by a mortgage impairment or mortgagee interest insurance policy or uses other evidence of insurance that Fannie Mae considers acceptable.
The servicer must be given a copy of any insurance policy covering the common areas of the PUD project when the mortgage covers an individual unit in a PUD and coverage for the unit is provided under an individual policy.
The servicer of a second mortgage does not need to keep the original policy in its possession if it is not responsible for paying the renewal premiums; however, it should retain in its files a copy of the insurance policy, any endorsements to it, and evidence of premium payments.
When the borrower obtains property insurance, the lender must verify the actual existence of a valid policy that meets Fannie Mae’s requirements. Information related to the policy should be passed on to the servicer.
The servicer may store any of the forms used as evidence of insurance in an electronic medium. However, the servicer must be able to provide a legible copy of any particular policy if Fannie Mae requests one.
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