Section 413
| 413.01A | |
|
|
|
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure:
- the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is continuously covered by property and liability insurance per Part II, Chapter 5: Property and Liability Insurance;
- all renewal premiums are fully paid on time in:
- an annual lump sum; or
- installments; and
- any BorrowerBorrowerPerson who is the obligor per the Note.
-financing of premiums complies with Part II, Chapter 5: Property and Liability Insurance, Section 501.01F: Payment of Premium, and either:
- the Modifications to Multifamily Loan and Security Agreement (Financing of Insurance Premiums) (Form 6272) was executed on the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. ; or
- prior to the BorrowerBorrowerPerson who is the obligor per the Note. entering into a premium financing agreement, execute and submit through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. an Amendment to the Multifamily Loan and Security Agreement, substantially in the form of the Modifications to Multifamily Loan Agreement (Financing of Insurance Premiums) (Form 6272).
If no insurance escrows are collected, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- obtain annual evidence that all policies were fully paid; and
- for BorrowerBorrowerPerson who is the obligor per the Note.
-financed premiums, retain in the Servicing FileServicing FileYour file for each Mortgage Loan serviced.
:
- receipts confirming timely payments; and
- a copy of the financing agreement.
| 413.01B | |
|
|
|
For each policy renewal, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must comply with the following timeline.
| Timeline | The Servicer must... |
|---|---|
| No later than 60 days before the policy expiration date | Contact the BorrowerBorrowerPerson who is the obligor per the Note. to request an original or duplicate original of each renewal policy within 90 days after the policy’s expiration date. |
|
No later than 15 days after the earlier of:
|
|
| No later than 60 days after notifying the Borrower of any noncompliant renewal policy | Resolve all non-compliant items with the BorrowerBorrowerPerson who is the obligor per the Note. and/or insurance agent (e.g., obtain a compliant renewal policy or endorsement, request a waiver, obtain force place coverage, etc.). |
| If, after 60 days, neither a compliant renewal policy nor an insurance waiver is obtained |
|
| 413.01C | |
|
|
|
With each renewal, but at least annually, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- complete an insurance compliance checklist to review the adequacy of the Borrower’sBorrower’sPerson who is the obligor per the Note.
insurance coverage and ensure compliance with:
- Part II, Chapter 5: Property and Liability Insurance;
- all Fannie Mae-approved modifications; and
- the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- confirm the insurance carrier’s rating per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 413.01E: Ratings; and
- retain in the Servicing FileServicing FileYour file for each Mortgage Loan serviced.
the:
- checklist;
- evidence of the insurance carrier’s rating; and
- if terrorism insurance is required, the analysis when annually confirming insurance compliance.
For an unrated Risk Retention GroupRisk Retention GroupState-chartered insurance company created by the 1986 federal Liability Risk Retention Act, insuring commercial businesses and government entities against liability risks. or Captive InsurerCaptive InsurerInsurance company wholly owned and controlled by its insureds, whose primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer's underwriting profits. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also comply with Part II, Chapter 5: Property and Liability Insurance, Section 501.01C: Risk Retention Groups and Captive Insurance.
| 413.01D | |
|
|
|
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit any insurance exception, including a delegated one, through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , with:
- a Multifamily Exception Request (Form 4638) for each exception signed by the authorizing person;
- a recommendation explaining why any non-delegated waiver request should be approved;
- all supporting documentation; and
- any previous exception not approved for the life of the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. , on an annual basis.
| 413.01E | |
|
|
|
All property and liability insurance carriers for renewal policies must comply with the following.
| If rated by... | Insurance carrier must have a... |
|---|---|
| A.M. Best Company |
|
| Demotech, Inc. | Financial Stability Rating of A or better. |
This rating requirement does not apply to:
- state pools or funds; or
- NFIPNFIPProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. policies.
Per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , even if the policy has not yet expired, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the BorrowerBorrowerPerson who is the obligor per the Note. to immediately obtain replacement coverage with a compliant carrier if the carrier is downgraded below:
- B++, if rated by A.M. Best Company; or
- A, if rated by Demotech, Inc.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor all flood map and community status changes, and take appropriate action when changes affecting Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. it services occur. When a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is remapped into a Special Flood Hazard AreaSpecial Flood Hazard AreaSpecial Flood Hazard Area designated by FEMA. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the BorrowerBorrowerPerson who is the obligor per the Note. to obtain flood insurance, regardless of whether the community is “participating” in the National Flood Insurance ProgramNational Flood Insurance ProgramProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. . The flood insurance must:
- be in place within 45 days after the date the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. was notified of the remapping; and
- have coverage meeting the mandatory purchase requirements identified in:
- the Federal flood insurance statutes; and
- any applicable Federal agency rulemaking and publication.
If the BorrowerBorrowerPerson who is the obligor per the Note. refuses to obtain the required coverage or pay a disputed premium, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the required coverage. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily InsuranceMultifamily InsuranceTeam that can be contacted at [email protected]. if:
- a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is mapped into a Special Flood Hazard AreaSpecial Flood Hazard AreaSpecial Flood Hazard Area designated by FEMA. ;
- the community in which the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is located does not participate in the National Flood Insurance ProgramNational Flood Insurance ProgramProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. ; and
- the BorrowerBorrowerPerson who is the obligor per the Note. cannot obtain the required flood insurance.
To remove a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). /building from an SFHASFHASpecial Flood Hazard Area designated by FEMA. , only an updated FEMAFEMAFederal Emergency Management Agency Standard Flood Hazard Determination Form (SFHDF) based on the following is acceptable:
- Letter of Map Amendment (LoMA);
- Letter of Map Revision (LoMR); or
- Letter of Determination Review (LoDR).
| 413.04 | |
|
|
|
| 413.04A | |
|
|
|
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately:
- obtain the required property and liability insurance, at the Borrower’sBorrower’sPerson who is the obligor per the Note.
expense, if:
- the BorrowerBorrowerPerson who is the obligor per the Note. fails to obtain acceptable insurance coverage; or
- per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , even if the policy has not yet expired, the carrier is downgraded below the required ratings per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 413.01E: Ratings; and
- notify Fannie Mae if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. obtains the required property and liability insurance.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is permitted to collect from the BorrowerBorrowerPerson who is the obligor per the Note. any reasonable out-of-pocket costs and expenses incurred by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to obtain insurance coverage for the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). .