On August 15, 2018, Fannie Mae announced its new “streamlined” process for settling mortgage insurance claims—a new algorithm called MI Factor. Fannie Mae claims that MI Factor will reduce the time, cost, and complexity of the claim settlement process.
For now, the benefits and terms of the new process will only apply to claims settled with mortgage insurers who have elected to participate in the new program. At least three large mortgage insurance companies have already signed on to participate in the program, but Fannie Mae believes that most providers will eventually opt-in. The process will go into effect for claims filed on or after October 1, 2018.
Participating mortgage insurers must process all submitted claims through MI Factor. For all claims which are paid using MI Factor, (1) servicers will no longer be required to submit supplemental claim submissions and claim appeals to the mortgage insurer, and (2) the MI claim curtailments billing process has been discontinued.
Claims that are settled with mortgage insurers that are not participating in the MI Factor process must continue to: (1) calculate claim expenses in the traditional fashion; (2) require supplemental claims; (3) participate in claim appeals, as needed; and (4) comply with Fannie Mae’s curtailment billing process.
Fannie Mae’s Servicing Guide Announcement regarding MI Factor is available here.