Freddie Offers Permanant Flood Relief
Freddie Mac is accustomed to offering relief to homeowners who are victims of natural disasters, but now the secondary market agency is offering some relief to lenders that have been frustrated by its flood insurance requirements.
"Freddie Mac will be reducing our flood insurance requirement," said Al LeQuang, director of credit policy and portfolio management, at the Western States Loan Servicing Conference here, hosted by the California Mortgage Bankers Association last August.
The change will make Freddie Mac's flood insurance requirement consistent with federal banking regulations pertaining to the 1994 flood insurance act, he said.
A bulletin from Freddie Mac on the matter was expected to come out on Aug. 10.
"We believe it will be of very high value to our customers, especially mortgage servicers," Mr. LeQuang said.
However, he said that the minimum flood insurance requirement should not be seen as a ceiling on coverage, urging lenders to explain to their customers that they may want to have more coverage to protect their own financial interest in a property.
(c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com