What is required in a mortgagee clause?
By the Slatehound team · Last updated
A standard or union mortgagee clause without contribution, naming the lender or servicer, then “its successors and/or assigns,” then the mailing address. Fannie Mae Selling Guide B7-3-08 (12/14/2022) is the conventional rule. A loss payable clause is not acceptable.
This is for the processor or processing manager at an independent mortgage bank on Encompass whose HOI row is still open prior to docs because the mortgagee line came back wrong. The counterparty is the insurance agency. Pull the conditions list, the lender’s legal name, the mailing address, and the loan number before you email the agent.
A loss payable clause is not the mortgagee clause
IRMI (read 2026-10-09) treats a mortgagee clause as a separate contract between the insurer and the named mortgagee. Loss is payable to that mortgagee. The insurer has to give it advance written notice of cancellation. Coverage for the mortgagee can continue even when an act of the insured, such as arson, voids the insured’s own claim.
Fannie Mae Selling Guide B7-3-08 (12/14/2022) requires a “standard” or “union” mortgagee clause without contribution on a one- to four-unit policy, in the form customarily used where the property sits. A loss payable clause in lieu of a mortgagee clause is not acceptable. Those rules apply to individual property and flood policies the borrower maintains. They do not apply to master policies for project developments.
The usual binder is an ACORD 75. Additional-interest checkboxes on that form include mortgagee, loss payee, and additional insured. Checking loss payee and typing the lender’s name still fails B7-3-08. Check mortgagee.
What an insurance binder should include for a mortgage is the rest of the binder. This page is the clause itself.
Three fields are in the Guide
When Fannie Mae is not named, B7-3-08 wants the lender’s name, followed by “its successors and/or assigns,” and the mailing address, shown as the mortgagee. If the lender is not the servicer, name the servicer that way. Instruct the insurer to send correspondence, policies, and bills to the servicer.
| Field | In B7-3-08 | What the desk actually sends |
|---|---|---|
| Lender or servicer legal name | Yes | The name on the conditions list, not a DBA or a branch |
| “its successors and/or assigns” | Yes | ISAOA is the acronym shops print. The Guide spells the phrase |
| Mailing address | Yes | The insurance-processing P.O. box, not the retail branch |
| Loan number | No | Shop overlay so the endorsement hits the right file |
| ATIMA (“as their interests may appear”) | No | Overlay. Harmless if present. Not a Fannie field |
| Named insured: every person who holds title | Yes, as a separate rule | Wrong named insured is a different bounce from a wrong mortgagee line |
The legal name has to match the lender’s own clause. A truncated name is a common agency-system limit. On r/InsuranceAgent in June 2025, producers said a long servicer name overflows the field, and they finish it on the address line. If the underwriter cannot read this lender on the line, it still bounces. Send the full block in the first email.
ATIMA and the loan number are shop overlay
ISAOA means “its successors and/or assigns.” That phrase is in B7-3-08. ATIMA means “as their interests may appear.” It is not in B7-3-08. Freddie Mac Guide 4703.6 (effective 07/09/2025, read 2026-10-09) uses “its successors and assigns,” without “and/or” and without ATIMA.
The loan number is not a Guide field either. Desks still put it on the line so the agency’s endorsement, the invoice, and the eFolder row share one identifier. On X in July 2026, a landlord-lending operator described a review loop whose usual misses were a missing loan number and an incorrect mortgagee clause. Ask for the number. Do not hold a conventional file solely because ATIMA is missing when ISAOA, the legal name, and the mailing address are already there.
What a mortgage lender needs from the homeowners insurance agent before closing is the rest of the HOI packet.
MERS and the GSE names bounce the line
B7-3-08 says Fannie Mae must not be named unless coverage or its interest would be impaired without it. If it is named, the clause must read “Fannie Mae, in care of” the servicer’s name and address, so mail goes to the servicer and not to Fannie Mae.
If the mortgage is registered with MERS and originated naming MERS as the original mortgagee of record, MERS must not be named as mortgagee or loss payee on any property insurance policy. Name the servicer.
Freddie 4703.6 is the same shape: name “(Seller/Servicer), its successors and assigns,” not Federal Home Loan Mortgage Corporation. In deed-of-trust states, add “beneficiary.” If Freddie must be named, show the Seller’s address in care of. MERS must not be named as loss payee. All drafts, notices, policies, and invoices go to the Seller/Servicer, not to the MERS address in the land records.
A refinance still needs this lender’s clause. A prior servicer in the mortgagee field is a bounce.
Fannie, Freddie, FHA, and VA do not share one sentence
| Agency | What the clause has to be | What it must not be |
|---|---|---|
| Fannie Mae | Standard or union, without contribution; lender or servicer plus “its successors and/or assigns” plus mailing address; written cancel notice to insured and mortgagee (B7-3-08, 12/14/2022) | Loss payable in lieu; MERS; Fannie Mae except “in care of” the servicer |
| Freddie Mac | Insurance industry’s standard mortgage clause; at least 10 days’ cancel notice; “(Seller/Servicer), its successors and assigns” (4703.6, effective 07/09/2025) | Freddie named as mortgagee; MERS as loss payee |
| FHA | Evidence of Hazard Insurance in the case binder (HUD Handbook 4000.1, read 2026-10-09). Servicing text names the mortgagee as a “Loss Payee” on hazard insurance | Handbook 4000.1 does not publish Fannie’s union-clause sentence for origination. Shops still send the same legal-name block |
| VA | Amounts payable, including unearned premiums, payable to the holder, or a trustee for the holder (VA Lenders Handbook Chapter 9 Topic 11, change date 07/30/2019, read 2026-10-09) | VA does not publish Fannie’s ISAOA sentence |
FHA’s “Loss Payee” servicing language is why agents check that box. On a Fannie-eligible file, that checkbox still fails B7-3-08. Ask for mortgagee.
The condo master does not take this lender’s clause
B7-3-08’s mortgagee rules apply to the borrower’s individual policy. A mortgagee clause naming Fannie Mae, the lender, or the servicer is not required for a master property insurance policy, an NFIP RCBAP, or an equivalent master flood policy. The master names the HOA as named insured. Put the standard mortgagee clause on the unit HO-6.
On r/loanoriginators in July 2025, a processor needed the bank on an ACORD 28 for a condo master. The producer refused to add the lender to the master, saying banks would fight over it. Another processor said to put the borrower’s name, unit address, loan number, and mortgagee clause on the unit binder, not on the whole master. That is the Fannie split.
What to leave off the line
| Item | Why it delays or fails |
|---|---|
| Loss-payee checkbox instead of mortgagee | B7-3-08 |
| MERS as mortgagee or loss payee | B7-3-08 and Freddie 4703.6 |
| Fannie Mae or Freddie Mac named as mortgagee | Name the lender or servicer |
| Prior lender on a refinance | This lender’s clause |
| Retail branch address | Notices have to hit the insurance P.O. box |
| DBA or truncated legal name | Underwriter cannot match the conditions list |
| Full Social Security number | Last-four if a portal asks |
Pull the binders and declarations pages that still have an open mortgagee-clause condition. Compare the additional-interest block to the legal name, “its successors and/or assigns,” mailing address, and loan number on the conditions list. If the checkbox says loss payee, MERS is in the name field, or last month’s servicer is still there, resend the same block to the agency that afternoon and log the sent date on the file.
Frequently asked questions
Does the mortgagee clause need the loan number?
Fannie Mae Selling Guide B7-3-08 (12/14/2022) does not name the loan number. Desks still put it on the line so the agency's endorsement matches the Encompass file. Send it in the first email. Do not bounce a conventional file solely for a missing number when the legal name, ISAOA, and mailing address are already correct.
Is a loss-payee checkbox enough on a conventional file?
No. B7-3-08 requires a standard or union mortgagee clause without contribution on a one- to four-unit policy. A loss payable clause in lieu of a mortgagee clause is not acceptable. Ask the agent to check mortgagee and write the lender or servicer legal name, its successors and/or assigns, and the mailing address.
Can the agent list MERS as the mortgagee?
No. B7-3-08 says that if the mortgage is registered with MERS and originated naming MERS as the original mortgagee of record, MERS must not be named as mortgagee or loss payee on any property insurance policy. Freddie Mac Guide 4703.6 says the same. Name the servicer.
Who gets named when the originating lender is not the servicer?
The servicer. B7-3-08 says if the lender is not the servicer, the servicer's name, followed by its successors and/or assigns, and mailing address must be specified. Instruct the insurer to send correspondence, policies, and bills to the servicer, not to the originating lender's retail branch.
Does a condo master policy need the unit lender's mortgagee clause?
No. B7-3-08 says a mortgagee clause naming Fannie Mae, the lender, or the servicer is not required for a master property insurance policy. The master names the HOA as named insured. Put the standard mortgagee clause on the unit HO-6.