Fannie Mae Force-Placed Insurance Plan Hits Roadblock

Law360, New York (February 12, 2013, 3:17 PM EST) -- A federal agency that oversees Fannie Mae said Tuesday that it disapproved of Fannie's plan to require mortgage servicers to use only approved low-cost insurers, saying it would study ways to cut force-placed insurance costs for both Fannie and Freddie Mac.

For months, regulators have scrutinized the force-placed insurance market, which critics say is plagued with little competition, high rates and scores of kickbacks. Fannie Mae — which can be stuck paying force-placed insurance premiums when borrowers default on their mortgage payments — had planned to...
To view the full article, register now.