Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.
Monday, March 25, 2013
NYS Scores $14M Settlement From Underwriter Associated With Force Placed Insurance Racket; Regulator: "Reverse Competition" Drove Homeowners' Premiums "Sky High"
In Albany, New York, Newsday reports:
An insurance company settled New York State allegations that it charged homeowners "unfair and unnecessary costs" and agreed to pay a $14-million civil penalty.
In the settlement announced Thursday, the company, Manhattan-based Assurant Inc., also agreed to change its rate structure for so-called force-placed insurance policies and to refund some homeowners.
"The force-placed insurance industry has for too long been plagued by an intricate web of relationships between insurers and banks that pushed distressed families over the foreclosure cliff," Gov. Andrew M. Cuomo said.
Force-placed insurance is a product that many homeowners will never encounter. Home borrowers take out insurance to protect their property, but the lender has an interest in making sure the house is protected as well. If a homeowner stops paying for insurance -- often due to financial difficulties including foreclosure -- the lender will take out a policy and charge the borrower.
The state Department of Financial Services said that these forced policies can be two to 10 times more expensive than ordinary, voluntary homeowner's insurance, even though they offer less coverage. Voluntary homeowner's insurance pays out an average 63 cents in claims for every dollar collected in premiums. According to the department, one of Assurant's subsidiaries paid out as little as 17.3 cents on the dollar in 2008. The settlement requires the company to charge rates that more closely resemble voluntary homeowner's insurance.
The state said that Assurant engaged in practices that the department called "reverse competition" in which it effectively shared profits with banks and mortgage servicers rather than offering its product at the lowest price.
Benjamin Lawsky, superintendent of Financial Services, said those practices drove premiums "sky high."
In settling, the company neither admitted nor denied wrongdoing. Assurant spokeswoman Shawn Kahle disagreed with the state's characterization that there was a conflict of interest in its activities.
"We do not believe that the relationships that we have historically had with our clients, mortgage servicers, have created anything that would be perceived to be inappropriate," Kahle said. "We recognize that in the state of New York they would like the procedures to be different, and we have agreed that we will follow those procedures and those regulations when they're put in place."
Assurant agreed to change those practices when the state institutes new regulations that apply to all insurers.
CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)
Land Contract/Contract For Deed/Rent-To-Own Rackets
The New York Times: The Housing Trap (In the wake of the housing crisis, low-income families have turned to seller financing to buy homes but these deals can be a money trap)
Beware The Fine Print: Consumers Forced To Sign Away Their Rights To Use Court System
The NY Times: Arbitration Everywhere, Stacking the Deck of Justice(Part 1 in series examining how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court)
Foreclosure Mills' Abysmal Record In Complying With New NYS Foreclosure Requirements
Justice Deceived: How Large Foreclosure Firms Subvert State Regulations Protecting Homeowners
MFY Legal Services Report On Questionable Practices By Process Servers In Debt Collection Cases
Justice Disserved: A Preliminary Analysis of the Exceptionally
Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York
Mortgage Mess Redux: Robo-Signers Return (A Reuters investigation finds that many banks are still employing the controversial foreclosure practices that sparked a major outcry last year)
CNN Video: As Foreclosures Mount, Florida Court Turns To 'Rocket Docket'
The Wall Street Journal: A Florida Court's 'Rocket Docket' Blasts Through Foreclosure Cases (2 Questions, 15 Seconds, 45 Days to Get Out; 'What's to Talk About?' Says a Judge)
"Produce The Note" Strategy When Dealing With Missing Promissory Notes In Foreclosure Actions
ABC Video: Fighting Against Foreclosure (Some homeowners have found a new tactic to keep the banks at bay)
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