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Volume 17 - Number 19

September 22, 2017

Policing the Flood Insurance Policies, GSEs Say Loans Compliant

Despite reports showing that many homeowners lack required flood insurance policies, Fannie Mae and Freddie Mac said data show that most of their loans do have the appropriate coverage. Recent hurricanes in Houston and Florida revealed that borrowers either never had coverage or let their policies lapse. Flood insurance is a requirement for GSE loans in designated flood areas and the mortgage giants say that servicers are responsible for enforcing the policies. Nevertheless, getting to the root of the disconnect is complicated. Although the GSEs said itís up to servicers to evaluate whether loans meet flood insurance requirements, they said they also have their own systems in place to help ensure compliance.

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Poll

With originations expected to drop in 2018, will your shop turn to non-QM/non-prime mortgage products as a way to bolster volumes?

Yes, definitely. We’re planning a launch.

33%

No. It’s still difficult compliance/regulatory-wise.

20%

Maybe. It’s under consideration.

33%

Not now. But things could change as 2018 progresses.

13%