MDPCE is investigating potential actions against major banks and insurance companies for steering mortgage customers to overpriced force-placed insurance plans. Companies being investigated include but are not limited to HSBC, Wells Fargo & Co., JP Morgan Chase & Co., Citigroup and Bank of America.
Normal mortgages include an agreement to maintain a homeowner’s insurance policy on the house. What many homeowners do not realize is that if they let that insurance lapse, banks and other lenders re-insure their home loan by buying insurance to replace it and make the homeowner pay for it.
Many banks, including the other banks listed above, take advantage of this mortgage provision and use it as an excuse to increase the fees they charge to borrowers. Force-placed insurance policies are almost always more expensive than insurance coverage you can purchase yourself and there have been many instances when HSBC, Wells Fargo and other banks have forced these policies on borrowers who do not need them, simply to increase their profits. The high cost of these force-placed insurance policies only adds to struggling homeowners’ debt.
If you are a victim of your bank obtaining force-placed insurance on your property and charging excessive premiums to your loan or escrow account, please contact us to discuss your legal rights.