Servicing Guide

Published June 13, 2018

B-4-03: Mortgage Loan or Credit Life Insurance (11/12/2014)

If the servicer acts as a broker or agent in the sale of mortgage loan (or credit) life insurance, or similar types of insurance, to the borrower, the following apply:

  • A credit life insurance policy must require separately identified premium payments on a monthly or annual basis.

  • The servicer must agree to reimburse Fannie Mae for attorney’s fees or any costs that Fannie Mae incurs if it brings an action on a defaulted mortgage loan, and

    • the borrower defends against Fannie Mae’s foreclosure or acts to enjoin Fannie Mae from liquidating the mortgage loan, and

    • the defense or the action for injunction is based on an obligation of the servicer (as broker or agent) or the insurance carrier.