New CFPB Rule Clamps Down On Force-Placed Insurance

Law360, New York (January 18, 2013, 6:15 PM ET) -- The Consumer Financial Protection Bureau released rules Thursday to protect borrowers from being slapped with charges for unnecessary force-placed insurance, regulations that a consumer group criticizes for not protecting borrowers from steep retroactive fees.

Under the new rules, mortgage servicers need a reasonable basis for believing that borrowers lack homeowners insurance required by a mortgage before they can impose force-placed insurance, which typically cost borrowers much more than standard policies. Servicers must make this call on a case-by-case basis, and they have to notify borrowers before...
To view the full article, register now.