Guide Bulletin 2013-4 Provides Temporary Property Insurance Claim Requirements for Properties Affected by Hurricane Sandy
February 22, 2013
To continue to best assist borrowers coping with hardships created by Hurricane Sandy, today we are announcing in Single-Family Seller/Servicer Guide (Guide) Bulletin 2013-4 temporary revised property insurance proceeds disbursement requirements.
So that you can quickly release insurance proceeds to help borrowers impacted by the hurricane repair or rebuild, effective immediately:
- We have revised the temporary insurance proceeds disbursement requirements specified in Guide Bulletin 2012-26 and Guide Section 58.10(a) for mortgages that were 30 or fewer days delinquent at the time of the hurricane for properties that suffered losses and are located in a Hurricane Sandy eligible disaster area.
- If an eligible property has not suffered a near total or total loss, you may use your discretion, based upon consistent processes and policies, to determine the amount and timing of insurance proceeds disbursement. There are no limitations on the amount of funds you may disburse. Additional guidelines apply if a property has suffered a total loss or near total loss.
- We have temporarily increased Servicer delegation authority by not requiring you to submit a property insurance claim recommendation to Freddie Mac when a mortgage is in foreclosure or the insured improvements have suffered a total or near total loss.
As a reminder, insurance proceeds for losses related to contents or off-residence living expenses must be released to the borrower without delay.