Everyone knows that if you have a home mortgage you are required to have home insurance. And that makes sense. But are you aware that, depending upon where you live, you may also be required to have certain types of hazard insurance? Most people don’t realize this – and it’s one of several ways that mortgage companies, banks and loan servicers may be getting to your pocketbook.
If you don’t have the required hazard insurance, or if you’re running behind on your homeowners policy, your mortgage company just might “help you out” by buying a policy on your behalf, and then charging you for it. Sounds great but there’s a big catch: you’ll be paying substantially more for the new policy. In fact, not only may your mortgage company be making a commission on the deal but they just may own the insurance firm writing the “forced” policy. To add insult to injury, these insurance policies are often backdated – a sure way for the insurer to have all the reward without any of the risk.
While we respect the fact that homeowners need to properly insure their homes, we think the practice of “forced – place” insurance, often at sky-high rates, needs to be stopped.
If you have experienced this type of mortgage insurance issue, please call 866.844.4487 for a free legal consultation.