Forced Placed Insurance | Big Banks Face Inquiry Over Home Insurance

Big Banks Face Inquiry Over Home Insurance

A New York State financial services agency is investigating several large banks to see whether they fraudulently steered homeowners into overpriced insurance policies.

The investigation centers on so-called force-placed insurance that has become increasingly common since the downturn of the housing market began and homeowners had trouble keeping up with payments on their home insurance.

JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are among the major companies involved in the inquiry by the office of Benjamin M. Lawsky, the superintendent of New York State’s Department of Financial Services, according to a person briefed on the investigation who asked to remain unidentified because the matter was private.

Mr. Lawsky’s office issued 31 subpoenas or other legal notices related to the case in early October, just as the state’s insurance and banking departments were merged under his new agency. His office has already turned up instances where mortgage servicing units at large banks steered distressed homeowners into insurance policies up to 10 times as costly as the homeowners’ original plans.

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5 Responses to “Forced Placed Insurance | Big Banks Face Inquiry Over Home Insurance”
  1. Imanda Waldon says:

    We had flood insurance through State Farm at one time. After Hurricane ?????, we filed a claim. The Insurance Adjusters came out an assessed the damage and told us the check would be in the mail within 3 weeks. The Insurance Adjusters also took off our hands (that is how they put it) and to save us dumping fees most of the flooded items. Items were things like….boat motors, freezer, go cart, grills, tools…..basically everything with value. After 4 weeks and still no reimbursement check, I called State Farm only to find out there was no claim filed what so ever. They tried to dismiss us. I called back and stated to them,”How can there be no claim”? Your Adjusters took all of our stuff. Well later that day, someone within State Farm higher up the chain called to verify our claim. Well, to make a long story short, that day at 5pm the same Insurance Adjusters showed back up at our house with ALL of our flooded items. (I am talking about a truck full of stuff they took and of course, with our blessing…..it was after all no good anymore according to the adjusters) Well the look on the faces of the two individuals made me very nervous. But I want to state that I done nothing wrong except to trust the adjusters and when we did not recieve payment, I just called to find out why. The adjusters dropped off our items……State Farm sent another adjuster……the claim went from just over $10,000.00 to less than a thousand and State Farm dropped our insurance. It was the only claim we ever had with State Farm. So folks, its not just Forced Placed Insurance through the banks that are making big profits…..you have to watch them all. Good Luck to all. Our mediation is Jan. 19, 2012. We have been fighting over 72 months to save our home. CitiMortgage has steadily tried to ruin our lives; We are FIGHTING the GOOD FIGHT and standing up for ALL OUR RIGHTS! I will post outcome of mediation. Pray for us.

  2. pamelag says:

    GMAC (aka) duetsch force placed insurance on me altho I had plenty, they used BALBOA whom they own and sucessfully stoled my home. many knew….

    • To Tell The Truth says:

      Pam, we should talk…they tried the same with me and I did not know until I needed some information on my homeowners which I had part with State Farm and part with bank…when they tried to find out about my insurance, Balboa name came up , they have so many other insurance companies, they could not find my records…now I keep getting insurance with this Balboa again and I have been paying my own insurance and taxes for a few years now…go figure…they also do a large group policy which should be much cheaper than the individual policy so they are raking in billions again off us…and they insurance for double or more of the remainder of the mortgage…they sure know how to make money off us…and I think that they also get some credit with the IRS..this is what I am trying to find out…interestingly enough they have not tried to send me any bills since the attempted foreclosure only disclosures of insurance. Somehow we are not hearing much about Deutch these days and what proof do we have that GMAC are connected with them? And what happen to Homecomings which used to service the loans and belonged to GMAC, no advertising themselves as Ally…

  3. Gordon Brooks says:

    This article doesn’t mention the situation where servicers force-place insurance because the homeowner’s coverage is “inadequate.” AMC Mortgage (the servicing arm of Ameriquest) tried to pull this on us by claiming we were required to buy flood insurance. We checked the federal flood maps and found that we weren’t in a flood zone. The made a “new determination” and decided that we weren’t required to have it after all.

    It’s another trick by servicers, not only to get kickbacks from insurance companies, but to tip the balance toward default, on which they, of source, make much more money.

    • see says:

      Wells tried to force-place insurance on us. Our paperwork specifically stated that we were not in a flood zone. Our house was up on a hill and no way unless there was another Noah’s Arc flood would we ever be flooded. But first they tried to say we had no insurance, we paid our own insurance premiums. When our insurance became due we would pay for the whole year all at once instead of payments. When they said we had no insurance and if we don’t get any they would gladly inflict us with their high premium insurance,the war started. So my phone calls to them started, said we had insurance with Allstate, said premuim was paid for the year and the check cleared the bank. Sent them a copy of the policy, copy of the bill and canceled check. Still they whinned about no insurance. Had our insurance agent call them and he had a hard time convincing them yes there was insurance coverage. Finally cleared up but then we got the letters about not having flood insurance. Finally got that cleared up after several weeks. Wasted time that did not have to happen. It’s all about making money and taking the deed.

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