can a mortgage company force you to buy homeowners insurance though a certain insurance company?
Wednesday, October 22nd, 2008 at
10:55 am
mackenzie b asked:
I thought it was legal for them to require you to have homeowners insurance, but not for the mortgage company to decide who you have to buy that insurance through.
I thought it was legal for them to require you to have homeowners insurance, but not for the mortgage company to decide who you have to buy that insurance through.
Tagged with: Buy Insurance • Company Insurance • Insurance Company
Filed under: Homeowners Insurance
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You can pick your own insurer as long as you carry the required coverage. If you fail to maintain coverage, the lender can force-place insurance.
No, you have the right to choose who ever you wish to carry as insurance. Don’t let them tell you that you have to go through their company or their friends company.
I have the best insurance (no to mention cheapest) and there is no way someone is gonna tell me I can’t use them. Especially here in FL
bud68 is 100% correct.
My friend’s insurance company dropped her and she failed to get a new insurance company.
Her mortgage company forced insurance on her – the monthly cost was 4X a homeowners policy and it did not cover her personal property – only the structure (mortgage) in case of fire or other casualty.
They cannot indicate which insurer you use, but they can certainly require certain minimums of coverage on any policy you select, and can also require regular proof that the insurance is in force.
Hi, well you’re absolutely correct! A mortgage lender requiring you to purchase insurance through a particular company or agent is in violation with Truth In Lending Laws, as it’s not disclosed if there is any financial relationship between the lender and the insurer, with the Fair Housing laws requiring a borrower to conduct business with a particular insurance carrier, and probably several State Laws if the mortgage company is a licensed mortgage broker, a federally insured bank or a national bank.
The Deed of Trust used to secure the mortgage, or the Trust Deed, in some areas, usually states that the borrower is required to carry a policy of insurance …acceptable to the mortgagee, this means they may reject a policy if the have a good reason to do so, but they can’t require a particular insurer.
This would be a serious violation and perhaps you misunderstood, if you need to report a violation, contact the State Department of Finance, under Economic Development, or your state Attorney General’s Office. Give them the name of the institution and ask what agency has authpority over them. National Banks would be the Comptroller of Currency, State Banks is Federal Deposit Insurance Corporation, If the lender is an Insurance Company they will also be under the Commissioner of Insurance. Each State also has it’s own Banking Authority.