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Fannie Mae and Freddie Mac Postpone Updated Guidance for Property Insurance Coverage

Earlier this year, at the direction of the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac updated their selling and servicing guides to clarify various lender and servicer responsibilities related to monitoring and verifying property insurance coverage.

The updated guidance was set to take effect on June 1 and would have impacted a significant portion of the property insurance market by requiring mortgagors to acquire replacement cost value (RCV) coverage for their property.

Given that the National Association of Realtors estimates that Fannie and Freddie support approximately 70% of the mortgage market, this change would have a real-world impact on the many homeowners who are unable to satisfy the coverage requirements or who are forced to purchase a higher-cost insurance product to do so.

However, on Wednesday, at the request of the Big “I" and other stakeholders, Fannie and Freddie announced that the June 1 implementation of this updated guidance is being postponed indefinitely.

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