NMCC Seeks Complaints from Victims of Forced-Placed Homeowners Insurance

Posted in Home Insurance

June 6th, 2011

The National Mortgage Complaint Center (NMCC) is looking to hear from U.S. homeowners who have been the victims of forced-placed homeowners insurance by their bank or loan servicer. The NMCC says this is becoming a growing problem among homeowners, which is why it wants to address all complaints as soon as possible.

What is Forced-Placed Homeowners Insurance?

According to the National Mortgage Complaint Center–a major watchdog for the U.S. mortgage lending industry–forced-placed homeowners insurance is coverage placed on a home that is no longer occupied, likely due to a foreclosure, and vulnerable to vandalism. To avoid liability to the bank, the home is insured.

This type of coverage is known to be three-, four- and sometimes five-times as costly as standard homeowners insurance and is only a necessity while the homes are vacant. But when homeowners finally do occupy homes, the insurance is forced upon them by the bank or loan servicing company. Some are even told they cannot remain in their homes if they don’t pay for the coverage.

In a recent press release by the NMCC, it was noted that “The big banks, and the major loan servicing firms have figured out there are huge profits in forced-placed insurance.” For their own benefit, the complaint center says, the financial institutions are ripping homeowners off.

The NMCC Wants to Hear from You

If you believe you are or have been the victim of forced-placed homeowners insurance, the NMCC wants to hear from you.

The group is beginning a new initiative to help identify U.S. homeowners who are paying for their standard homeowners insurance in addition to this coverage to their bank or loan servicing company.

The NMCC is calling forced-placed insurance a scam and is encouraging all victims to file a complaint as soon as possible. For more information, homeowners can visit the NMCC website at NationalMortgageComplaintCenter.com.