New mortgage servicing rules enacted by the Consumer Financial Protection Bureau go into effect January 10, 2014 to protect consumers from widespread unfair practices related to force-placed mortgage hazard insurance.  Mortgage servicers will now be prohibited from charging excessive fees on force-placed policies. Here is an overview of two major substantive rules regarding force-placed insurance. Excessive Fees Limitations Since the financial crisis, the mortgage industry has reaped millions in profits from force-placing expensive insurance policies on unsuspecting borrowers when their own policies lapsed... Read More

Major mortgage lenders are being sued for forcing homeowners into overpriced homeowners and hazard insurance when the borrowers own policies have lapsed.  JP Morgan recently settled a force-placed insurance lawsuit for $300 million. Force-Placed Insurance Overview What is force-placed insurance? Force-placed insurance is hazard insurance a mortgage servicer obtains on behalf of a borrower.  Essentially, when a borrower’s insurance policy lapses, whether due non-payment, simple error or otherwise, the mortgage lender will “force-place” a new policy on the property in order to protect... Read More