413.01

Property and Liability Insurance

413.01A

Generally

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

  • ensure all Potential Red Flags for Mortgage Fraud and Other Suspicious Activity  were considered;
  • report all unresolved red flags per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 310: Compliance ;
  • ensure the Property PropertyMultifamily 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 ; 
  • ensure all renewal premiums are fully paid on time in:
    • an annual lump sum; or
    • installments;
  • collect reserves for the premium allocation obtained from the insurance agent or broker ensuring sufficient reserve funds for the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to pay the premium due for the applicable policy or policies in:
    • an annual lump sum; or
    • installments;
  • pay the premiums for all required insurance when due; and
  • ensure any Borrower BorrowerPerson who is the obligor per the Note. -financing of premiums complies with  Part II, Chapter 5: Property and Liability Insurance, Section 501.01G: 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 Date Mortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. ; or
    • prior to the Borrower BorrowerPerson who is the obligor per the Note. entering into a premium financing agreement, execute and submit through the MAMP MAMPMultifamily 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 Servicer ServicerPrimary 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 Borrower BorrowerPerson who is the obligor per the Note. -financed premiums, retain in the Servicing File Servicing FileYour file for each Mortgage Loan serviced. :
    • receipts confirming timely payments; and
    • a copy of the financing agreement.
413.01B

Policy Renewal

For each policy renewal, the Servicer ServicerPrimary 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 Borrower BorrowerPerson who is the obligor per the Note. to request acceptable evidence of insurance per  Part II, Chapter 5: Property and Liability Insurance, Section 501.01H: Evidence of Insurance .  An original or duplicate original of each renewal policy must be obtained within 90 days after the policy renewal.

No later than 15 days after the earlier of:

 

  • receipt of permanent evidence or temporary evidence of insurance; or
  • the insurance renewal date
No later than 60 days after notifying the Borrower of any noncompliant renewal policy Resolve all non-compliant items with the Borrower BorrowerPerson 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.).

60 days after notifying the Borrower of noncompliant items, if the Servicer has not obtained either a:

 

  • compliant renewal (permanent evidence or temporary evidence) policy; or
  • an insurance waiver
  • Submit a Non-Monetary Default Borrower Request in the MAMP MAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .
  • Immediately send the Borrower BorrowerPerson who is the obligor per the Note. a Reservation of Rights Letter ( Form 4804 ).
413.01C

Compliance Review

With each renewal, but at least annually, the Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

For an unrated Risk Retention Group Risk 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 Insurer Captive 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 Servicer ServicerPrimary 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 501.01D: Risk Retention Groups and Captive Insurance .

413.01D

Exceptions

The Servicer ServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit any insurance exception, including a delegated one, through the MAMP MAMPMultifamily 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 Loan Mortgage 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. Test Notes-SV Test Again Sub-bullet test1 Sub-bullet test2 , on an annual basis.
413.01E

Ratings

All property and liability insurance carriers for renewal policies must have an A.M. Best Company General Policyholder Rating of A- or better.

This rating requirement does not apply to policies issued:

  • through State-sponsored insurance programs; or
  • by insurers participating in NFIP NFIPProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. .