Freddie Mac says it is seeing a “material increase” in mortgage insurer rescissions, cancellations, and denials of coverage. The GSE has issued a notice alerting lenders that they may be forced to buy back the loan if Freddie Mac determines the mortgage does not have the mortgage insurance coverage as required at delivery, or if the mortgage insurance coverage is no longer in force. Freddie requires a primary mortgage insurance policy as protection against default for loans with a loan-to-value ratio of more than 80 percent.
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