Fannie Mae issued Servicing Guide Announcement SVC-2020-03 (Announcement), regarding certain updates to its Servicing Guide, including the simplification of its insurance loss draft disbursement policies while balancing associated risk. Per the Announcement, effective immediately (or at a future date of a servicer’s choosing), the loss draft updates revise a servicer’s responsibilities for managing insurance loss proceeds by making the following changes to the Fannie Mae Servicing Guide:
- Eliminating the requirement that the insurance proceeds be made payable to both the borrower and the contractor in certain circumstances;
- Eliminating the requirement that the servicer determine when a licensed contractor is needed;
- Expressly permitting the use of remote inspections via videotelephony with the borrower or photographs/video submitted by the borrower of current mortgage loans; and
- Eliminating the final inspection for mortgage loans that are current or less than 31 days delinquent at the time of the loss event.
In brief, the Announcement also sets forth changes that (i) remove the requirement to suspend credit reporting for borrowers impacted by a disaster event, and (ii) clarify that a servicer is authorized to not send a payment reminder notice to a borrower during an active forbearance plan. These changes to the Fannie Mae Servicing Guide are effective immediately.
Finally, the Announcement contains several miscellaneous updates to the Servicing Guide, including, for example, changes that promote borrower awareness about Fannie Mae’s Disaster Response Network.