Profile: catfish
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Thank you for your comment, catfish, and welcome to Regulation Room. It sounds as though you have a good understanding of the reasons behind force-placed insurance. Do you think that CFPB has struck a good balance between providing protection to consumers against unnecessary force-placed insurance and limiting the costs to servicers?
All of the new proposals appear to be good and are what small banks have been doing for years. My small bank has over half of their loans in home mortgages and have not forclosed on one in over 10 years. Rules like this one could make it harder on small banks to work with customers and more expensive to make mortgage loans.
The servicers aren’t non-profit organizations. They were hit with an influx of loans tht were defaulting for various reasons from job loss, bankruptcies, medical emeregencies, etc. But recall that some people used their homes as ATM machines and that was another part of the problem. There is definitely enough blame to go around. But going forward, adding “expectations” and regulations doesn’t really add up to a solution. Fair and reasonable enforcement needs to be part of the solution.
Yes, and after calling 3 times and sending 3 emails, they must send 3 singing telegrams. Let’s be realistic here, the borrower needs to take some responsibility since they should know they are delinquent on their loan. I think three phone calls on three separate days is more than a good faith effort. If the consumer fails to notify the bank that they changed their phone number, it once again points to the negligence of the consumer. These rules are so restrictive that new systems and staff training has to be implemented. This is going to drive up the costs and fees associated with getting a mortgage in the first place.
One phone call or contact of some sort should be more than enough effort on the lender’s side. The consumer knows they are delinquent and needs to take… more »
I have read all the previous comments and I agree with some and disagree with others. I agree that if your lender is not helping you, then you should be able to turn them into someone that can get you some help. Enter the CFPB, they are here to help the consumer and that is what they should do.
I disagree with the Lender not being able to force place insurance on a home. Yes, the deed is in the homeowner’s name, but if the home burns to the ground because the homeowner didn’t pay the insurance, what them. Is the bank just supposed to forgive the debt and take just the land, because that is all that would be left. I am pretty sure this is to payoff your mortgage in case of a fire, etc. and the lender is only supposed to place enough insurance on the loan to cover payoff.
If… more »
Maybe the answer is to have the consumer set up their account with an email alert. Most of the larger servicers offer internet access to your account, so set up the alert.
If this is left to the servicer to send emails, I can just see the next round. Say a couple gets divorced, the servicer only has the wife’s email address, she is not happy doesn’t inform husband who is living in the house. Husband sues servicer for no contact via email. We all need to take a deep breath and realize that the consumer has to take some responsiblity here. If you know you house payment is due and the 1st and you don’t pay it – your late! And don’t forget not everyone has a computer or cares to get one, what to do about them, at least sending a notice in writing is keeping the postal service somewhat alive.