The National Association of Federal Credit Unions wrote to the Federal Housing Finance Agency asking that they rethink certain practices related to lender placed insurance rules.
NAFCU is trying to relieve pressure for credit unions and is continuously requesting the FHFA and other government entities address their member’s concerns.
Currently, NAFCU explains that the FHFA is debating prohibitions in regards to mortgages sold to Fannie Mae and Freddie Mac.
“The FHFA is considering requiring the Enterprises to prohibit sellers and servicers from receiving, directly or indirectly, remuneration associated with placing coverage with or maintaining placement with particular insurance providers,” the letter stated.
The trade association explained that they, as not-for-profit cooperative entities, generally enter into third-party agreements specifically designed to reduce cost for member-borrowers.
However, if the FHFA moves forward with the prohibitions, NAFCU strongly urges the agency to take every precaution necessary to ensure that it does not unintentionally create unwarranted roadblocks to lenders, the letter explained.
