Profile: eisrael11
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What's Happening Now
August 20, 2012 6:29 pm
Just to let you know…it was the Force-Placed Insurer acting on behalf of your lender that determined your flood zone and placed the policy on your account. They are also the ones you spoke with every time you called your lender.
August 21, 2012 1:33 am
Welcome to Regulation Room, eisrael11, and thanks for your comment. CFPB’s rules for refunding improper force-placed insurance are here. Would standards like these have made your flood insurance situation easier to resolve?
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The rule does not go far enough in terms of protecting the consumer from errors of the bank and allows the bank to put the consumer in a catch22. My lender errorneously determined that I was in a flood area and despite my protests (and documentation) that I was not in a flood area went out and bought flood insurance at very high rates. When they finally evaluated my documentation they agreed to cancel the policy since I was not in a flood area but did not want to refund the cost of insurance for the time the insurance had been in place. It took many hours, calls, and esacalations, and preliminary discussions with attorneys to get the cost of the unnecessary insurance refunded.
The system leaves consumers poorly defended and allows the bank to buy insurance at extremely high rates.
My… more »
1. If the insurance was place erroneously the bank has to refund all insurance payments and pay a penalty.
2. The bank should only be allowed to buy insurance at a rate no greater than the leser of — 10% of competitively priced polices or 10% greater than the rate the homeowner had been paying.
3. The bank should have a time limit on how long it would have to inestigate. « less