Mortgage Scandal Of The Day: Forced-Placed Insurance
In a dark cranny of the mortgage-servicing world a “force-placed insurance” scandal is brewing. When a homeowner’s insurance lapses, the servicer steps in and buys them a new one, at a price several factors higher than their original. And the company they buy it from is essentially themselves with a different name. Now investors are finding out about the incestuous self-dealing and kickbacks and they’re pissed.
Ties to Insurers Could Land Mortgage Servicers in More Trouble [American Banker via Felix Salmon] (Thanks to Jason!)
Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.