NY Times | Forced Placed Insurance ONE of the Richest and Most ...

NY Times | Forced Placed Insurance ONE of the Richest and Most Secretive Sources of Profit

Posted by 4closureFraud on January 22, 2012 ? 9 Comments?

?There is a lot to love about force-placed insurance ? if you sell it. The policies typically cost at least three times as much as ordinary property insurance. Some borrowers have been charged much more ? up to 10 times the prevailing rate?

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Hazard Insurance With Its Own Perils

By GRETCHEN MORGENSON

?Force-placed insurance appears to be the dirty little secret of the mortgage industry,? Mr. Lawsky said in an interview last week. ?It is a silent killer harming both consumer and investors while enriching the banks and their affiliates.?

Representatives of PNC and JPMorgan Chase declined to comment. Mark Rodgers, a spokesman for Citigroup, said the bank was working with Mr. Lawsky?s office. ?CitiMortgage does not sell homeowner?s insurance to consumers,? he said. ?If a homeowner does not provide an insurance policy, CitiMortgage secures a policy to protect the interest of the investor. Whenever the homeowner submits proof they have obtained insurance on their own, the lender-placed insurance is canceled.?

A spokesman for Morgan Stanley said its mortgage company ?does not have an affiliated agent, broker or insurance company to procure force-placed insurance.?

Force-placed insurance has exploded during the foreclosure crisis. Once a backwater that generated $1 billion a year, it is now a $6 billion-a-year business. Much of its growth has come on the backs of homeowners.

Full article here?

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Filed under bankruptcy, cdo, cds, Corruption, Fannie Mae, foreclosure, Foreclosure Fraud, Foreclosuregate, freddie mac, MERS, mortgage electronic registration system, Mortgage Fraud, securities fraud

Source: http://4closurefraud.org/2012/01/22/ny-times-forced-placed-insurance-one-of-the-richest-and-most-secretive-sources-of-profit/?utm_source=rss&utm_medium=rss&utm_campaign=ny-times-forced-placed-insurance-one-of-the-richest-and-most-secretive-sources-of-profit

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