Fraudclosure | Banks Under Fire for Prices, Terms of Forced Placed Insurance

Banks under fire for prices, terms of forced insurance

Advocates say lenders often get a cut of ‘excessive’ premiums banks choose to replace lapsed homeowners policies.

An insurance controversy affecting hundreds of thousands of people in Florida and other states never touched Laura Digan’s world — until a $23,287.54 bill rocked it.

The “force placed” homeowners insurance imposed by her mortgage company after a policy lapsed was more than four times as expensive as prior coverage. The single mother of two in Palm Beach County said she was shopping for an alternative to last-resort insurer Citizens when the charge hit.

“I was absolutely appalled, horrified, shocked,” Digan said.

She questioned and contested it for months. Mortgage servicer Capital One agreed to reduce the charges days after The Palm Beach Post inquired, Digan said.

But regulatory and legal battles are only beginning to come to a head for a once-obscure part of the insurance business that is attracting increasing scrutiny around the country. It has become a big moneymaker for the financial interests that benefit from it, producing $5.5 billion in premiums annually.

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Comments
3 Responses to “Fraudclosure | Banks Under Fire for Prices, Terms of Forced Placed Insurance”
  1. Sarah says:

    The CFPB knows all about this hustle. We are seeing the now how “bad faith” equals perfectly legal. Who knew we’d lose certain freedoms faster then our well known civil liberties? Cordray seems to be focused on protecting Banks.

  2. stripes says:

    These investors think they own the place and the truth is, they don’t, because the FED never paid the Treasury back for their original loan their banks took out in our names. What followed the Origination Fraud was the biggest insurance/investing fraud, counterfeiting and forgery scam in history.

  3. Fed Up says:

    This would not be happening if our worthless – do nothing sellout-
    zchumbag legislators and governors did their jobs!!!!!

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