Freddie Mac Single-Family Seller/Servicer Guide 8203.1 — Mortgage insurance terms, warranties and other requirements

Freddie Mac Single-Family Seller/Servicer Guide 8203.1 — Mortgage insurance terms, warranties and other requirements

Effective 2025-07-09 · Freddie Mac's stamp for this section

This section contains information related to: ■ Mortgage insurance defined terms ■ General warranties and covenants and other requirements ■ Pre-HPA Mortgage that is modified ■ Determination of property securing the Mortgage ■ Other conditions for Borrower-requested cancelation of Borrower-paid mortgage insurance ■ Borrowers impacted by an Eligible Disaster (a) Mortgage insurance defined terms The following terms apply for purposes of this chapter: Defined terms related to the mortgage insurance H HPA The Homeowners Protection Act of 1998, as amended HPA Effective Date July 29, 1999, the first date on which requirements of the HPA applied to any HPA Mortgage HPA Mortgage A 1-unit Primary Residence Mortgage with mortgage insurance originated on or after the HPA Effective Date. For purposes of canceling mortgage insurance in accordance with the requirements of Sections 8203.2 and 8203.4(a), an “HPA Mortgage” also includes any second home Mortgage (as defined in Section 4201.12) with mortgage insurance and any Pre-HPA Mortgage HPA Mortgage Annual Notice A written statement that, pursuant to the HPA, the Seller/Servicer must send annually to a Borrower concerning the Borrower’s HPA Mortgage. The statement informs the Borrower of mortgage insurance cancelation and termination rights pertaining to the Borrower’s HPA Mortgage. The HPA requires different notices, the contents of which depend on whether the HPA Mortgage is a fixedrate or ARM. N Non-HPA Mortgage Any Home Mortgage with mortgage insurance, originated on or after the HPA Effective Date, that is not an HPA Mortgage. For purposes of canceling mortgage insurance in accordance with the requirements of Section 8203.3, a “Non-HPA Mortgage” also includes any Pre-HPA Mortgage secured by a 2- to 4unit Mortgaged Premises or 1- to 4-unit Investment Property. P Pre-HPA Mortgage Any Home Mortgage with mortgage insurance originated before the HPA Effective Date Pre-HPA Mortgage Annual Notice A written statement that, pursuant to the HPA, the Seller/Servicer must send annually to a Borrower concerning the Borrower’s PreHPA Mortgage. The statement gives instructions to the Borrower on how to contact the Seller/Servicer to determine if and how mortgage insurance may be canceled. (b) General warranties and covenants and other requirements The Seller/Servicer warrants that mortgage insurance has been obtained as required in Section 4701.1 and agrees and covenants that such mortgage insurance will be maintained unless canceled in accordance with the requirements of Section 4701.1 (for purposes of determining the “value” of Mortgaged Premises located in the State of New York), Sections 8203.2 through 8203.4(c) or pursuant to applicable law. Additionally, some of the requirements in Sections 8203.2 and 8203.4 are derived from, and are in addition to, requirements under the HPA. The Seller/Servicer also warrants that the Borrower has been given, and agrees and covenants to provide, all disclosures required by applicable law, including, but not limited to, the HPA, relating to the terms on which the Borrower-paid mortgage insurance may be canceled. Such disclosures may include an initial HPA-related notice given to a Borrower at the Mortgage closing and an HPA Mortgage Annual Notice or Pre-HPA Mortgage Annual Notice, as applicable. (c) Pre-HPA Mortgage that is modified The modification of a Pre-HPA Mortgage (a fixed-rate, adjustable-rate) does not cause the Pre-HPA Mortgage to become an HPA Mortgage or trigger any new obligation under this chapter relating to the Pre-HPA Mortgage. (d) Determination of property securing the Mortgage For mortgage insurance cancelation purposes, the occupancy of the Mortgaged Premises as stated in the Borrower’s Mortgage application must be used to determine whether the Mortgaged Premises is a Primary Residence, a second home (as defined in Section 4201.12) or an Investment Property. (e) Other conditions for Borrower-requested cancelation of Borrower-paid mortgage insurance When a Borrower requests cancelation of Borrower-paid mortgage insurance pursuant to Sections 8203.2 and 8203.3, except as may otherwise be provided in a Purchase Document, the Seller/Servicer must not request or require that a Borrower make a written certification or any other representation concerning the existence or nonexistence of a Second Mortgage or other subordinate lien on the Mortgaged Premises. If a Purchase Document contains a condition relating to such a written certification or representation by a Borrower, the Seller and the Servicer of the Borrower’s Mortgage must provide to the Borrower all disclosures required by applicable law with respect to the condition set forth in the Purchase Document. (f) Borrowers impacted by an Eligible Disaster When a Borrower impacted by an Eligible Disaster that resulted in the Mortgage being subject to a disaster-related forbearance plan pursuant to Chapter 8404 or other Purchase Documents requests to cancel Borrower-paid mortgage insurance post-forbearance and after the Mortgage has been restored to a current status, any Delinquency that was a direct result of the Mortgage being subject to a disaster-related forbearance plan, and, following the disasterrelated forbearance, transition to a relief or workout option to cure the Delinquency (e.g., repayment plan or Trial Period Plan) in accordance with Section 8404.1(f) or other Purchase Documents, must be considered an exception to the payment history requirements set forth in Sections 8203.2 and 8203.3.

Source: Freddie Mac Single-Family Seller/Servicer Guide 8203.1 — Mortgage insurance terms, warranties and other requirements · source URL · snapshot 4c94f67729042dd6