N.Y. Examines Banks for Force-Placed Insurance

New York financial regulators are reportedly investigating several major banks to find out whether they fraudulently steered homeowners into more expensive home insurance. According to The New York Times, the office of Benjamin Lawsky, the superintendent of New York State’s Department of Financial Services, has been making inquiries into some of the biggest banks on Wall Street.

Banks that have been issued subpoenas or other legal notices in the investigation include JPMorgan Chase, Bank of America, Citigroup and Wells Fargo. The report says Lawsky’s office has uncovered cases where mortgage servicing units at large banks steered distressed homeowners into insurance policies up to 10 times as costly as the homeowners’ original plans. These new policies were sometimes offered by the banks’ affiliates, while in other times, there may have been kickbacks between different companies, according to the report.

Topics New York Homeowners