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December 22, 2014

FHFA to Stop 'Forced' Homeowner's Insurance

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FHFA to Stop 'Forced' Homeowner's Insurance

The Federal Housing Finance Agency will bar mortgage companies from accepting payments to arrange force-place homeowners' insurance, government officials have announced. 

The housing regulator will ban fees for the coverage, which is often forced on borrowers whose regular homeowners' policy has lapsed, despite industry objections that such a move encroaches on state regulators. Rather than set rules on what insurers can charge for such policies, which is generally the purview of states, the FHFA will prevent mortgage servicers that do business with Fannie Mae and Freddie Mac from accepting certain payments. 

Doing so essentially would block the entire industry from the practice, since Fannie and Freddie back about two-thirds of U.S. mortgages.

Source: "U.S. Takes Aim at 'Forced' Insurance," The Wall Street Journal (Nov. 5, 2013)

Copyright © 2013 Information Inc.

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