Fannie Mae hopes to banish banks from any involvement in the purchase of force-placed insurance under a plan to lower the cost of the product, according to a copy of a request for proposals obtained by American Banker.
The move comes in the wake of reports of widespread self-dealing and kickbacks in the force-placed insurance market. Fannie responded to those reports in March by announcing its intention to replace traditional force-placed insurance on the loans it guarantees with policies acquired from providers of its choosing.
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