Hazard Insurers May Face Suit Over Fees to Fannie-Freddie

The regulator of Fannie Mae (FNMA) and Freddie Mac (FMCC) will consider suing insurers who charged excessive fees for hazard coverage paid by the two government-owned mortgage companies, an auditor’s report said. Fannie Mae and Freddie Mac could have overpaid about $158 million in 2012 alone for lender-placed insurance, according to the report released today by the Federal Housing Finance Agency’s Office of Inspector General. The coverage is purchased by mortgage servicers and billed to borrowers who allow their policies to lapse.