Im glad that Bank Of America was exposed for providing FOrced Place Insurance at A Much Higher Premium that the the Home Owners were paying. I was a receipient of this practice both FLood and Home OWNers Coverage was well over 35% more than my original policies. I compained to the Dept of
Lender Placed Insurance (LPI) typically has a higher premium because there is no underwriting, guaranteed placement and more factors. Whereas the borrower’s policy is underwritten. The problem arises when the lender is receiving KICKBACKS from the LPI vendor.
Im pleased the B of A was finally exposed by providing not only inflated premium cost coverage But Carrier was sub standard and recipient of many complaints regarding their claims practices. I was personally recipient of Forced Place Coverage (Home Owners and Flood) premium was well over 30% that I was paying prior to having the Bank Provide coverage
I’m glad to see this issue has finally been given the attention it deserves. In MA we had many clients subjected to illegal “forced placed” coverage when mortgage companies constantly “sold” mortgages (with tax/insurance escrow accounts) to each other. It seems like everything but the insurance information would be provided to the new lender so they would automatically issued the forced placed coverage. When our clients would call the mortgage company they were always told their monthly increases were because of the insurance costs. They were never told it was forced placed coverage, they would just imply that our homeowners policy had caused the increase. These costs, in MA, often were in the range of $2700 to $3500 per year causing monthly increases of $200-400. It’s too bad that it took this long. Maybe if congress would stop voting on the same bill 50 times (with the same results) perhaps, they could spend time with constituents who could inform them of these grave injustices. Unfortunately, many homes were lost to foreclosure.
So,when borrowers fail to obtain and keep property insurance for the property they have borrowed on (as they have agreed to), the lender is supposed to say no problem and don’t worry about anything?? These SLUGS deserve to pay high prices for insurance!! Why don’t/can’t they get their own property insurance?? No excuses!!
Did you even read the article or just commence to posting about these so-called “slugs” you envision. This is about the banks SCAMMING their customers. I know, it’s a big shock that banks would do that, but there you are.
IF THESE SLUGS WOULD HAVE PURCHASED THEIR OWN PROPERTY POLICIES, THEY WOULDN’T HAVE HAD TO CONTEND WITH FORCED PLACED INSURANCE. WHAT’S SO HARD TO UNDERSTAND ABOUT THIS FACT??
So that makes it OK for the bank to rip them off??? And did you not get the part about banks force-placing coverage when you have perfectly good insurance already in force?
You sure think highly of yourself. It must be due to the fact that you put everyone else down.
Libby—-You obviously do not understand this insurance product and why it’s called force-placed!! Again, if the morons that get this coverage would have gotten their own appropriate insurance coverage, they wouldn’t be put in this position!! DO YOU UNDERSTAND?? Do you read, speak and understand english?? Do you understand logic??
November 1, 2014 at 3:00 pm
kathy says:
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Try living in florida with a 45 year old home and getting home owners insurance.Until you know what you’re up against, don’t make judgement statements
These policies were force placed with no underwriting. They could be and many times were vacant homes or in disrepair. If you write property without underwriting them the premium should be higher. The companies that wrote the insurance could not choose the ones they took and the ones they declined because the agreement with the mortgage company was to insure all properties with lapsed insurance policies. In auto insurance it has always been the case that if someone drives for more than 30 days without insurance and then obtains a policy the premium would be about 60% higher for a number of years because people that are irresponsible enough to drive without insurance are a higher risk class of customers. Statistics prove that and I am sure a similar situation exists with homeowners insurance.
These policies were force placed with no underwriting. They could be and many times were vacant homes or worse. If you write property without underwriting them the premium should be higher. The companies that wrote the insurance could not choose the ones they took and the ones they declined because the agreement with the mortgage company was to insure all properties they needed insured. In auto insurance it has always been the case that if someone drives for more than 30 days without insurance and then obtains a policy the premium would be about 60% higher for a number of years because people that are irresponsible enough to drive without insurance are a higher risk class of customers. Statistics prove that and I am sure a similar situation exists with homeowners insurance.
P&C guy nailed it. If YOU don’t make sure YOUR bank has evid of coverage on YOUR home, it’s YOUR fault you got billed for higher insurance premiums. It’s not the banks job to underwrite and shop YOUR insurance.
“Lawyers for homeowners told a federal judge in February that the Charlotte, North Carolina-based bank had agreed to a deal without providing further information.”
Why do you think that is Renoscs? Because they don’t want the public to know the details of how they’ve been ripping off their customers for years, that’s why!
You’re the type of person that calls ripping people off “working for a living.” What a piece of work.
April 9, 2014 at 12:35 pm
Kevin McGuire says:
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This insurance is not “sold” by the lenders any more than their D&O, General Liability insurance etc.
My Father Herschel is largely credited with originating outsourced insurance tracking and CPI in 1971. Prior to that, lenders performed their own tracking and ordered VSI. With outsourcing and the ensuing economies of scale and other factors, the cost to the lender has been greatly decreased. So the notion that lenders need to be reimbursed for their expenses associated with the program is nonsense. Using that rational, does the foreclosure agents, attorneys, real estate agents etc. reimburse the lenders for the cost they incur to recover and sell their collateral? how about the tow truck driver who repo’s the car for the credit union? It’s pure KICKBACKS.
The problem is; the industry has told the lie for so long, its become truth to the unknowing.
June 24, 2014 at 11:16 pm
Whippy says:
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PC–No one twisted the Insurers ARM to Write any of these Policies. These Lawsuits WILL NOT GO TO COURT because the Banksters will loose on the FRAUD.
I previously worked 12 years for an insurance company who specialized in selling forced placed policies to banking institutions etc. Every time I inspected a property claim, I informed the owner about the inflated price they were paying for their policy and advised them to obtain a policy on their own if they could qualify for one. A large percentage of the homeowners had forced placed policies because it was convenient for them to included the premiums with their mortgage payments. This is the line the banks would sell them.
As a 33 year veteran of the lender placed industry, I can tell you with absolute certainty, this is a long standing and widely utilized practice within mortgage lending as well as the auto finance markets.
These settlements aren’t about borrowers who fail to meet their responsibilities. It is about the reverse competition that rewards the insurance vendor with the highest KICKBACK to the lender.
Simply put, “expense reimbursements, commissions, re-insurance pacts, loss contingency payments” are KICKBACKS. Insurance vendors conduct this insidious practice with the sole intention of BUYING the lender’s business.
And while properly fashioned Lender Placed Insurance does serve a legitimate purpose, the added cost of the KICKBACK increases the monthly payment and pushes the borrower closer to the tipping point of default. It seems these lenders don’t connect the dots, because the ill begotten income has impaired their vision.
Oooh! One misspelled word and you cast the entire argument to be false.
Yeah, that’s compelling.
And is my capitalization of the word KICKBACK further deem my position less credible?
Really? Thats all you’ve got?
Lastly, yes a borrower can obtain their own insurance. If they end up with LPI, it is of their own doing. But, to gouge consumers with the cost of the KICKBACKS for the banks and LPI insurers profits is WRONG!
Im glad that Bank Of America was exposed for providing FOrced Place Insurance at A Much Higher Premium that the the Home Owners were paying. I was a receipient of this practice both FLood and Home OWNers Coverage was well over 35% more than my original policies. I compained to the Dept of
Lender Placed Insurance (LPI) typically has a higher premium because there is no underwriting, guaranteed placement and more factors. Whereas the borrower’s policy is underwritten. The problem arises when the lender is receiving KICKBACKS from the LPI vendor.
Im pleased the B of A was finally exposed by providing not only inflated premium cost coverage But Carrier was sub standard and recipient of many complaints regarding their claims practices. I was personally recipient of Forced Place Coverage (Home Owners and Flood) premium was well over 30% that I was paying prior to having the Bank Provide coverage
If that was the case, why didn’t you keep the insurance you bought to avoid forced placed coverage??
Thats NOT what he said numbnutts..
I’m glad to see this issue has finally been given the attention it deserves. In MA we had many clients subjected to illegal “forced placed” coverage when mortgage companies constantly “sold” mortgages (with tax/insurance escrow accounts) to each other. It seems like everything but the insurance information would be provided to the new lender so they would automatically issued the forced placed coverage. When our clients would call the mortgage company they were always told their monthly increases were because of the insurance costs. They were never told it was forced placed coverage, they would just imply that our homeowners policy had caused the increase. These costs, in MA, often were in the range of $2700 to $3500 per year causing monthly increases of $200-400. It’s too bad that it took this long. Maybe if congress would stop voting on the same bill 50 times (with the same results) perhaps, they could spend time with constituents who could inform them of these grave injustices. Unfortunately, many homes were lost to foreclosure.
So,when borrowers fail to obtain and keep property insurance for the property they have borrowed on (as they have agreed to), the lender is supposed to say no problem and don’t worry about anything?? These SLUGS deserve to pay high prices for insurance!! Why don’t/can’t they get their own property insurance?? No excuses!!
Did you even read the article or just commence to posting about these so-called “slugs” you envision. This is about the banks SCAMMING their customers. I know, it’s a big shock that banks would do that, but there you are.
IF THESE SLUGS WOULD HAVE PURCHASED THEIR OWN PROPERTY POLICIES, THEY WOULDN’T HAVE HAD TO CONTEND WITH FORCED PLACED INSURANCE. WHAT’S SO HARD TO UNDERSTAND ABOUT THIS FACT??
So that makes it OK for the bank to rip them off??? And did you not get the part about banks force-placing coverage when you have perfectly good insurance already in force?
You sure think highly of yourself. It must be due to the fact that you put everyone else down.
Libby—-You obviously do not understand this insurance product and why it’s called force-placed!! Again, if the morons that get this coverage would have gotten their own appropriate insurance coverage, they wouldn’t be put in this position!! DO YOU UNDERSTAND?? Do you read, speak and understand english?? Do you understand logic??
Try living in florida with a 45 year old home and getting home owners insurance.Until you know what you’re up against, don’t make judgement statements
These policies were force placed with no underwriting. They could be and many times were vacant homes or in disrepair. If you write property without underwriting them the premium should be higher. The companies that wrote the insurance could not choose the ones they took and the ones they declined because the agreement with the mortgage company was to insure all properties with lapsed insurance policies. In auto insurance it has always been the case that if someone drives for more than 30 days without insurance and then obtains a policy the premium would be about 60% higher for a number of years because people that are irresponsible enough to drive without insurance are a higher risk class of customers. Statistics prove that and I am sure a similar situation exists with homeowners insurance.
These policies were force placed with no underwriting. They could be and many times were vacant homes or worse. If you write property without underwriting them the premium should be higher. The companies that wrote the insurance could not choose the ones they took and the ones they declined because the agreement with the mortgage company was to insure all properties they needed insured. In auto insurance it has always been the case that if someone drives for more than 30 days without insurance and then obtains a policy the premium would be about 60% higher for a number of years because people that are irresponsible enough to drive without insurance are a higher risk class of customers. Statistics prove that and I am sure a similar situation exists with homeowners insurance.
P&C guy nailed it. If YOU don’t make sure YOUR bank has evid of coverage on YOUR home, it’s YOUR fault you got billed for higher insurance premiums. It’s not the banks job to underwrite and shop YOUR insurance.
Its about the KICKBACKS!!!
Please defined kickbacks. Commissions for selling insurance are not kickbacks. Do you expect people to work for free??
“Lawyers for homeowners told a federal judge in February that the Charlotte, North Carolina-based bank had agreed to a deal without providing further information.”
Why do you think that is Renoscs? Because they don’t want the public to know the details of how they’ve been ripping off their customers for years, that’s why!
You’re the type of person that calls ripping people off “working for a living.” What a piece of work.
This insurance is not “sold” by the lenders any more than their D&O, General Liability insurance etc.
My Father Herschel is largely credited with originating outsourced insurance tracking and CPI in 1971. Prior to that, lenders performed their own tracking and ordered VSI. With outsourcing and the ensuing economies of scale and other factors, the cost to the lender has been greatly decreased. So the notion that lenders need to be reimbursed for their expenses associated with the program is nonsense. Using that rational, does the foreclosure agents, attorneys, real estate agents etc. reimburse the lenders for the cost they incur to recover and sell their collateral? how about the tow truck driver who repo’s the car for the credit union? It’s pure KICKBACKS.
The problem is; the industry has told the lie for so long, its become truth to the unknowing.
PC–No one twisted the Insurers ARM to Write any of these Policies. These Lawsuits WILL NOT GO TO COURT because the Banksters will loose on the FRAUD.
I previously worked 12 years for an insurance company who specialized in selling forced placed policies to banking institutions etc. Every time I inspected a property claim, I informed the owner about the inflated price they were paying for their policy and advised them to obtain a policy on their own if they could qualify for one. A large percentage of the homeowners had forced placed policies because it was convenient for them to included the premiums with their mortgage payments. This is the line the banks would sell them.
As a 33 year veteran of the lender placed industry, I can tell you with absolute certainty, this is a long standing and widely utilized practice within mortgage lending as well as the auto finance markets.
These settlements aren’t about borrowers who fail to meet their responsibilities. It is about the reverse competition that rewards the insurance vendor with the highest KICKBACK to the lender.
Simply put, “expense reimbursements, commissions, re-insurance pacts, loss contingency payments” are KICKBACKS. Insurance vendors conduct this insidious practice with the sole intention of BUYING the lender’s business.
And while properly fashioned Lender Placed Insurance does serve a legitimate purpose, the added cost of the KICKBACK increases the monthly payment and pushes the borrower closer to the tipping point of default. It seems these lenders don’t connect the dots, because the ill begotten income has impaired their vision.
It should be outlawed! Period!!
It’s reinsurance, not re-insurance!! It’s obvious you don’t understand the insurance business if you can’t even spell this simple word correctly!!!!
Oooh! One misspelled word and you cast the entire argument to be false.
Yeah, that’s compelling.
And is my capitalization of the word KICKBACK further deem my position less credible?
Really? Thats all you’ve got?
Lastly, yes a borrower can obtain their own insurance. If they end up with LPI, it is of their own doing. But, to gouge consumers with the cost of the KICKBACKS for the banks and LPI insurers profits is WRONG!