Compliance News

Make sure to bookmark this page, because our compliance team monitors any news and updates on legislation related to collateral risk transfer. Whenever anything new surfaces, we post it here.

April 2018


Senate votes to block CFPB auto lending guidance – The Congressional Review Act resolution has passed in a Senate vote which included the support of Senator Joe Manchin (D-WV).  This resolution blocks a 2013 guidance from the CFPB, which aimed to prevent car dealers from making discriminatory markups on indirect loans. Senator John McCain (R-AZ) missed the vote along with other key Republicans.



 February 2018


Trade groups ask Defense Dept. to rescind MLA interpretation on GAP insurance financingWells Fargo hit with class-action lawsuit over auto insurance charges – Trade groups ask Defense Dept. to rescind MLA interpretation on GAP insurance financing – Credit unions join in the call to repeal the section of the MLA Interpretive Rule regarding GAP and other credit insurance products. The National Association of Federally-Insured Credit Unions, the Credit Union National Association, and the Defense Credit Union Council all express concerns that the interpretation will negatively impact service members looking to finance a vehicle purchase.



January 2018


Dealers and Finance Companies Scramble to Comply with Changes to the Military Lending Act – Dealers and Finance Companies Scramble to Comply with Changes to the Military Lending Act – The MLA Interpretive Rule presents very real challenges for auto dealers and financers, particularly because it was effective retroactively to October 2016. Potential options for compliance going forward are presented while appeals are made to repeal that section of the rule.


ABA Calls for Changes to MLA Interpretive Rule Amendments – ABA Calls for Changes to MLA Interpretive Rule Amendments – The American Bankers Association issued a comment letter to the Department of Defense calling for a repeal of the section in the MLA Interpretive Rule regarding credit insurance products such as GAP. They argue this interpretation could limit the ability of service members to access insurance products that could protect them from financial hardship.


New Rule Prompts Liability Concerns for Dealers Who Sell to Military – New Rule Prompts Liability Concerns for Dealers Who Sell to Military – Auto dealers and financers are concerned that the MLA Interpretive Rule could have severe implications for vehicles being sold or that have been sold to service members. Questions arise as to whether they can safely offer protective credit insurance products such as GAP.

September 2017


Here’s why Congress can create bipartisan fix to flood insurance this year – “The program now subsidizes insurance for millionaires, puts low-income families in harm’s way, and keeps people trapped in vulnerable homes by masking the true risk of flooding.”


The government has temporarily reauthorized The NFIP for three months. The politics surrounding the reauthorization have begun. Miniter will be closely following the reauthorization, as it develops. Jim Gilpin’s comment to the article.



July 2017


Wells Fargo hit with class-action lawsuit over auto insurance charges – Wells Fargo said that it will pay $80 million in compensation to the customers, including some 20,000 who had their cars repossessed after the charges for the insurance caused them to default on their loans.



January 2017


CFPB’s Cordray Signals He Has No Intention of Resigning – Consumer Financial Protection Bureau Director Richard Cordray sent his strongest signal to date on Tuesday that he has no intention of resigning ahead of his term expiring next year even if asked to by President Donald J. Trump.

December 2016


The Rocky Road Ahead for the CFPB in 2017 – The Consumer Financial Protection Bureau faces a precarious and uncertain future in 2017 with all eyes focused on two questions: whether President-elect Donald Trump will attempt to fire agency director Richard Cordray and if Congress can successfully restructure the agency by changing its leadership and funding.



October 2016


CFPB’s Cordray Puts Servicers on Notice Ahead of New Rules – The Consumer Financial Protection Bureau will require underperforming servicers to document the technology and process changes used to implement the agency’s recently released servicing regulations.


CFPB Reissues Compliance Bulletin and Policy Guidance – The Bureau is reissuing its guidance on service providers, formerly titled CFPB Bulletin 2012-03, Service Providers to clarify that the depth and formality of the risk management program for service providers may vary depending upon the service being performed—its size, scope, complexity, importance and potential for consumer harm—and the performance of the service provider in carrying out its activities in compliance with Federal consumer financial laws and regulations. This amendment is needed to clarify that supervised entities have flexibility and to allow appropriate risk management.


CFPB Finalizes Strong Federal Protections for Prepaid Account Consumers – The Consumer Financial Protection Bureau (CFPB) today finalized strong federal consumer protections for prepaid account users. The new rule requires financial institutions to limit consumers’ losses when funds are stolen or cards are lost, investigate and resolve errors, and give consumers free and easy access to account information.



September 2016


Major Insurance Company to Refund Massachusetts Homeowners for Improperly Charged Force-Placed Insurance – In the third such settlement in the past year, a company has agreed to provide refunds to Massachusetts homeowners who were improperly charged for force-placed insurance policies.


FDIC Announces New Members for the Advisory Committee on Community Banking – The Federal Deposit Insurance Corporation (FDIC) has announced the selection of eight new members for its Advisory Committee on Community Banking, which has been providing advice and recommendations to the FDIC on a broad range of community bank policy and regulatory matters since it was established in 2009. The Advisory Committee members represent a cross-section of community bankers from around the country.



August 2016


CFPB publishes 900-page final rule on mortgage servicing – The Consumer Financial Protection Bureau finalized new regulations Thursday that it says will ensure homeowners and struggling borrowers are treated fairly by mortgage servicers.



June 2016


House Financial Services Committee Releases Full Text of Dodd-Frank Rollback Bill – The House Financial Services Committee last week released the full text of the Financial Choice Act, a nearly 500-page bill aimed at rolling back the Dodd-Frank Act’s extensive supervisory regime and providing regulatory relief for banks of all sizes.


Guidance to Help Financial Institutions and to Facilitate Recovery in Areas of Texas Affected by Severe Storms and Flooding – The FDIC has announced a series of steps intended to provide regulatory relief to financial institutions and to facilitate recovery in areas of Texas affected by severe weather.



April 2016


House Passes Private Flood Insurance Bill by Unanimous Vote – The House passed a bill Thursday that would authorize state insurance commissioners to approve flood insurance policies for Fannie Mae, Freddie Mac and other federally backed mortgages.



February 2016


More Subprime Borrowers Are Falling Behind on Their Auto Loans – More borrowers with spotty credit are failing to make monthly car payments on time, a troubling sign for investors who have snapped up billions of dollars of securities backed by risky auto debt.


How CFPB’s Auto Enforcement Actions Are Disrupting the Industry – The Consumer Financial Protection Bureau’s use of enforcement actions to try and make broad changes to the auto lending market is fragmenting the industry further and potentially limiting a consumer’s ability to negotiate for a lower interest rate.


Huntington Eyes New Market Opportunities With FirstMerit – Huntington Bancshares Inc.’s merger with FirstMerit Corp. opens up new opportunities in “niche” markets, which the bank plans to capitalize on, Chief Executive Steve Steinour said during the Credit Suisse Financial Services Forum this morning.



January 2016


CFPB’s Auto Finance Push Hurts Consumers – (Editorial) The way the Consumer Financial Protection Bureau is regulating the auto finance industry’s relationships with dealers is simply wrong — both legally and ethically. It’s also directly counterproductive to its goal of protecting consumers.


PNC Bank To Pay $32.3M To End Force-Placed Insurance Suit – PNC Bank NA will pay $32.3 million to settle a Florida federal class action accusing the bank of overcharging homeowners for force-placed insurance, after Bank of America NA, HSBC Bank USA NA and others reached similar deals, a Monday filing said.

December 2015


Assurant to Pay Restitution to Massachusetts Homeowners – The largest force-placed insurer in Massachusetts has agreed to provide refunds to homeowners to settle allegations that it improperly charged for force-placed insurance policies.


House of Representatives Votes to Repeal CFPB’s Auto Lending Guidance – The House of Representatives voted to pass H.R. 1737, the Reforming CFPB Auto Financing Guidance Act, which would nullify CFPB Bulletin 2013-02, entitled “Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act.”.



November 2015


Nationstar Becomes the Latest Servicer to Settle Over ‘Force Placed Insurance’ – Nationstar Mortgage has agreed to pay $77 million to settle class-action suits filed byhomeowners over the alleged inflating of homeowner insurance rates.



October 2015


Lawmakers Give CFPB’s Cordray Earful Over Auto Lending Crackdown – Lawmakers from both political parties on Tuesday sharply criticized the Consumer Financial Protection Bureau’s attempt to restrict or eliminate auto dealers’ ability to mark up a loan by citing their partnering lenders, arguing it would result in higher prices for consumers.



September 2015


CFPB’s Outside Expert on Disparate Impact Also Advises Banks – Dr. Bernard Siskin may know more than any other outsider about how the Consumer Financial Protection Bureau cites big banks and other lenders for unintentional discrimination — and he has turned that unique knowledge to his advantage.


CFPB Hits Fifth Third Over Dealer Markup – Fifth Third Bank must pay a total of more than $21 million to settle separate claims by the federal government that the bank’s indirect auto-loan business discriminated against African-Americans and that the bank deceptively signed up customers for a credit card add-on product.



August 2015


Crackdown on Racial Bias Could Boost Drivers’ Costs for Auto Loans – A federal regulator’s campaign to fight bias against minorities is changing the way many car loans are priced, a move that is increasing costs for some consumers.


Final Amedment for Mass Flood Insurance Law: 209 CMR 57.00 – Massachusetts has released the final amendment for the flood insurance regulation 209 CMR 57.00, which is effective September 11th, 2015.



July 2015


QBE Selling Lender-Placed Insurance Business for $90M –  QBE Insurance Group Ltd, Australia’s second-largest insurer by market value, agreed to sell its North American mortgage and lender services business to National General Holdings Corp. for $90 million.


How CFPB’s Auto Enforcement Actions Are Disrupting the Industry – The Consumer Financial Protection Bureau’s use of enforcement actions to try and make broad changes to the auto lending market is fragmenting the industry further and potentially limiting a consumer’s ability to negotiate for a lower interest rate.


Huntington Eyes New Market Opportunities With FirstMerit – Huntington Bancshares Inc.’s merger with FirstMerit Corp. opens up new opportunities in “niche” markets, which the bank plans to capitalize on, Chief Executive Steve Steinour said during the Credit Suisse Financial Services Forum this morning.



June 2015


BB&T to Stop Auto Loan Dealer Markups, Move to Flat Fee Program – BB&T’s auto-finance division will stop dealers from marking up the price on sales contracts, and instead will offer a flat-fee compensation program.


Final Rule Implements Flood Insurance Changes – Regulators finalized a rule Monday requiring banks to escrow flood insurance premiums and fees for loans on real estate located in a flood zone.



April 2015


FEMA’s NFIP Flood Insurance Manual Effective April 1st, 2015 – FEMA has revised The NFIP Flood Insurance Manual, including minor changes to notification requirements.



February 2015


Commentary: CFPB approach on auto loan discrimination is flawed – The Consumer Financial Protection Bureau is using questionable tactics to prevent discrimination in auto lending, and it is overlooking an existing solution, writes Ramesh Ponnuru. The CFPB should try using an approach that the Justice Department and two auto dealers developed, which relies on policies and record-keeping.


Comment Period for Amendments to CFPB’s TILA/RESPA Rules Open Until March 16 -The proposed amendments were first published in the Federal Register on December 15. CFBP’s mortgage rules were first proposed in 2013 and went into effect in January 2014; the proposed amendments to the rules are under the Real Estate Settlement Procedures Act (Regulation X, or REPSA) and the Truth in Lending Act (Regulation Z, or TILA).


Deal Gets Wells Fargo Force-Placed Insurance Suit Tossed – A Washington federal judge on Tuesday tossed a proposed class action targeting Wells Fargo Bank NA over its force-placed insurance practices after the plaintiffs weren’t able to show why their claims weren’t barred under a recently settled class action involving similar allegations.



January 2015


DFS adopts regulation governing forced placed insurance – This week’s state Register included a notice of adoption of a new regulation designed to govern Force-Placed Insurance. The regulation, which adds a new Part 227 (Regulation 202) to Title 11 NYCRR, sets forth rules regarding, among other things, the rating and placement of, and practices related to, force-placed insurance.

December 2014


Amendments to the 2013 Mortgage Rules under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) – The Bureau of Consumer Financial Protection (Bureau) is proposing amendments to certain mortgage servicing rules issued in 2013.



September 2014


Force-Placed Insurance Kickbacks Still Alive – The Federal Housing Finance Agency banned banks and mortgage servicers in June from accepting commissions on force placed insurance policies issued by affiliated companies. But at least one servicer has found a way around the ban by selling an insurance-agent affiliate to a company it has close ties with.



August 2014


NY Investigates Mortgage Firm’s Insurance Deals – New York’s top financial regulator said Monday he will investigate whether the nation’s largest overseer of subprime mortgages, Ocwen Financial Corp., overcharged struggling homeowners on insurance.



July 2014


Bank of America Merrill Lynch concludes Dodd-Frank killed housing – Two analysts at Bank of America Merrill Lynch are celebrating the 4 year anniversary of Dodd-Frank, the financial reform law, by calling it “persistent financial repression.”



May 2014


FEMA Releases Program Changes to Section 5 of The HFIAA – The purpose of this memorandum is to provide notification of program rate changes the NFIP will implement effective October 1, 2014. The October 1, 2014 rate changes revise premium rate tables to comply with Section 5 of the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) Pub.


CFPB makes TILA regulations available in “easy to read” electronic format –  The CFPB is launching eRegulations, an “intuitive, easy-to-navigate electronic format of Truth in Lending regulations.” The CFPB said that it expects eRegulations to make it easier to implement and use the recently adopted mortgage rules.



April 2014


FEMA Releases Grimm-Waters Overview – On March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law. This law repeals and modifies certain provisions of the Biggert-Waters Flood Insurance Reform Act, which was enacted in 2012, and makes additional program changes to other aspects of the program not covered by that Act. Many provisions of the Biggert-Waters Flood Insurance Reform Act remain and are still being implemented.



March 2014


Obama Signs Bill Easing Flood Insurance Rate Hikes – President Barack Obama on Friday signed legislation that rolls back dramatic insurance rate hikes required under 2012 reforms to the troubled National Flood Insurance Program, despite the White House’s earlier criticism of attempts to limit the premium increases.


Senate Approves Bill to Curb Flood Insurance Hikes – The Senate went along with the House of Representatives by passing a bill to reverse flood insurance reforms and curb flood insurance premium increases.


Senate Leaders Seek to Pass House Flood-Insurance Bill – Senate leaders are seeking agreement to quickly pass a House flood-insurance bill to avert steep premium increases for property owners in coastal states such as Florida, Louisiana and New Jersey.


Wells Fargo settles forced placement lawsuit for undisclosed amount –Wells Fargo and two insurance companies agreed to repay homeowners in cash up to 11% of the premiums paid before March 24, 2012, in a settlement reached Thursday.


Flood insurance rate hike delay passes House – The House passed a bill that would delay flood insurance rate hikes and derail reform efforts passed just two years ago with the Biggert-Waters act.



February 2014


Battle over flood insurance bill moves to House – Efforts in the House to delay increases in federal flood insurance premiums face determined opposition from watchdog groups that say taxpayers shouldn’t have to subsidize coverage for homeowners who build or buy in high-risk areas.


CFPB sends warning to mortgage servicers – Describing his message as a “tough one,” CFPB Deputy Director Steven Antonakes told attendees yesterday at the Mortgage Bankers Association’s National Mortgage Servicing Conference that “continued sloppiness” by servicers “is difficult to comprehend and not acceptable.”


Strike three for flood insurance premium hike delay  Republicans stopped an effort to force a vote on H.R. 3370, which would delay pending flood insurance premium hikes under the National Flood Insurance Program.


Citi to pay $110 million in a lawsuit over force-placed insurance  Citigroup Inc has agreed to pay $110 million to thousands of homeowners who were forcibly charged expensive property insurance premiums, a court filing showed, as several U.S. banks and insurers were criticized by regulators over such practices.



January 2014


MBA Voices Opposition to Flood Insurance Bill Force-Placed Insurance Amendment – Ahead of a final vote on flood insurance legislation, the Mortgage Bankers Association urged the Senate to reject an amendment that would overrule state regulators on forced-placed insurance requirements.


MBA, Trade Groups Press Senate on Flood Insurance Amendment – As the Senate moves forward with flood insurance legislation this week, the Mortgage Bankers Association and other trade groups urged senators to approve an amendment that would give lenders more time to implement new escrow requirements.

December 2013


CFPB will be vigilant with new mortgage rules – CFPB Director Richard Cordray defended the regulations at a Consumer Federation of America event on Thursday, and promised that the bureau would be “vigilant“ in enforcing the “back to basics” regulations for mortgage lenders and servicers, according to prepared remarks.



November 2013


RESPA-TILA Final Rule November 2013 – For more than 30 years, Federal law has required lenders to provide two different disclosure forms to consumers applying for a mortgage.  The law also has generally required two different forms at or shortly before closing on the loan.


Cordray Vows “Openness” with Auto Lenders – Consumer Financial Protection Bureau Director Richard Cordray acknowledged concerns Tuesday about how the agency is regulating indirect auto lenders, vowing to be more transparent about its oversight.



September 2013


CFPB Semi-Annual Report – The Consumer Financial Protection Bureau (CFPB or Bureau) presents this Semi-Annual Report to the President, Congress, and the American people, in fulfillment of its statutory responsibility and commitment to accountability and transparency. This report provides an update on the Bureau’s mission, activities, accomplishments, and publications since the last Semi-Annual Report, and provides additional information required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank or Dodd-Frank Act).


CFPB Issues ‘Final’ Amendments to Mortgage Rules – The Consumer Financial Protection Bureaulate last week finalized amendments and clarifications to its January mortgage rules.


J.P. Morgan and Assurant Agree to Settle ‘Forced’ Insurance Suit – J.P. Morgan Chase and Assurant Inc. agreed to a settlement under which they could pay about $300 million total to resolve allegations in a class-action lawsuit that they overcharged borrowers for a type of homeowners’ insurance.



August 2013


NY Goes After Agents, Brokers On Force-Placed Insurance – A New York regulator on Wednesday warned insurance agents and brokers not to offer cheap or free services to mortgage lenders and servicers as part of efforts to lure force-placed insurance business.



July 2013


CFPB Releases 2013 Dodd-Frank Mortgage Rules Readiness Guide – On July 8, the CFPB released the first version of the 2013 Dodd-Frank Mortgage Rules Readiness Guide. The guide is made for use by financial institutions of all sizes to evaluate their preparedness to be compliant and to maintain compliance with the upcoming mortgage rule changes.



June 2013


GOP Seeks Data on What Prompted CFPB Auto Guidance –Republican lawmakers are calling on the Consumer Financial Protection Bureau to explain its rationale behind new fair lending guidelines for auto lenders.


Bankers Hem, Haw on Force-Placed Kickbacks in Closed Meeting – Bankers and specialty insurance executives defended their force-placed insurance practices and dodged questions about alleged industry kickbacks and price gouging at a private but well-attended “working group” hosted by regulators.



May 2013


Force-placed insurance reforms to completely cover New York – The Cuomo Administration announced that its force-placed insurance reforms will cover 100% of the New York market. This came as a result of the New York State Department of Financial Services reaching an agreement with four force-placed insurers, including American Modern Insurance Group, Chubb, Fidelity and Deposit Company of Maryland and FinSecure.


NAIC –The practice Lender-placed insurance has recently attracted increased media coverage. The attention has primarily focused on the rates charged for lender-placed insurance policies and whether insurers and lenders are making “excess” profits on this line of business.


CFPB Issues Proposed Clarification on the 2013 Escrows Final Rule –The CFPB issued a final rule clarifying and making technical amendments to the 2013 Escrows Final Rule issued by the Bureau this past January.


Wells Fargo, QBE to Pay $19M to Settle Force-Placed Lawsuit – Wells Fargo and insurer QBE have agreed to pay $19.3 million to settle claims that they overcharged homeowners in Florida on lender-placed insurance policies.



April 2013


The CFPB takes action against mortgage insurers to end kickbacks to lenders – The CFPB announced four enforcement actions to end what the Bureau believes to be improper kickbacks paid by mortgage insurers to mortgage lenders in exchange for business. The CFPB filed complaints and proposed consent orders against four national mortgage insurance companies in order to stop these practices, which have been prevalent for more than 10 years. The proposed orders require the four mortgage insurers to pay more than $15 million in penalties to the CFPB.



March 2013


U.S. Cracks Down on ‘Forced’ Insurance – The Federal Housing Finance Agency, which regulates mortgage giants Fannie Mae and Freddie Mac plans to file a notice Tuesday to ban lucrative fees and commissions paid by insurers to banks on so-called force-placed insurance.


Assurant settles with New York over “force-placed” insurance– Assurant Inc settled a New York probe of its “force-placed” insurance by agreeing to pay the state a $14 million penalty,refund some homeowner premiums and reform certain business practices.


CFPB using ECOA to go after dealers and dealer mark-up – At the CBA Live conference last week in Phoenix, CFPB Assistant Director for Fair Lending & Equal Opportunity Patrice Ficklin announced that the CFPB will be using ECOA to regulate dealer mark-up.



January 2013


Consumer finance agency finalizes rules to protect mortgage borrowers from runarounds, fees – The government’s consumer lending watchdog finalized new rules aimed at protecting homeowners from shoddy service and unexpected fees charged by companies that collect their monthly mortgage payments.


Force-Placed Insurance Suit Against Citibank, MidFirst Proceeds– A federal judge in New York has allowed a class action lawsuit against Citibank and MidFirst Bank over force-placed insurance practices to proceed, according to a release from lawfirms representing plaintiffs in the case.

December 2012


Force-Placed Insurer Offers 19% Rate Cut in Florida -QBE’s concession, made amid scrutiny of its relationship with major banks, would save investors and homeowners in the state $98 million a year. Part of that money would come from reducing the commissions it pays to banks.



August 2012


CFPB – Released both the TILA and RESPA Mortgage Servicing Proposals that were put out for public comment.  The RESPA proposal details the implementation of the Dodd-Frank Section 1463 force-placed insurance requirement including Notification Form Letters and handling escrow insurance payments for a delinquent borrower.  The TILA proposal does not detail force-placed insurance other than referring to Dodd-Frank.



July 2012


National Association of Insurance Commissioners (NAIC) to Review Force-Placed Insurance – The NAIC, which is the standard setting body for state insurance regulators, announced plans to hold hearings on force-placed insurance.



June 2012


NY DFS Demands Lower Force-Placed Insurance Rates – The result of the May Hearings is that insurance companies providing force-placed insurance products in New York had until July 6th to resubmit rates for NY DFS approval.  Companies included Assurant, the QBE Insurance Group and American Modern Insurance Group.  These companies make up more than 90 percent of the force-placed insurance market in New York.  “The more attention paid to the force-placed insurance issue the better,” says Benjamin Lawsky, the Superintendent of New York’s Department of Financial Services. “Our hearings made clear there is a need for fundamental reform.”



May 2012


NY DFS Holds Hearing on Force-Placed Insurance – 5 bank owned insurance agencies, Assurant, QBE, Bank of America, GMAC Mortgage and other servicing companies testified at the NY Department of Financial Services public hearings on force-placed insurance held May 17-21 in New York.


Fannie Mae postpones implementation of SVC-2012-04 – On May 23rd, Fannie Mae released a servicing notice to postpone the implementation of the “Updates to Lender-Placed Insurance and Hazard Insurance Claims Processing originally released in March.  Fannie Mae “encouraged servicers to implement as many of the requirements as practically feasible”.



March 2012


CFPB – Announced that it will issue mortgage servicing rules that will impose new limits on force-placed insurance.  The announcement was made by Richard Cordray at a speech to the National Association of Attorneys General in Washington.


RFP for force-placed insurance – On March 6th, Fannie Mae issued an RFP to major force-placed insurance carriers in an attempt to lower the cost of premiums to the Fannie Mae borrowers and investors.  The goal of the RFP is to:

  • Eliminate servicers from passing on commissions and service fees to Fannie Mae.
  • Eliminate servicers from passing on the cost of insurance tracking.
  • Separate commissions and fees to ensure transparency.
  • Fannie Mae releases Servicing Guide Announcement SVC-2012-04 – On March 14th, Fannie Mae released an update to amend and clarify servicing requirements related to Lender-Placed Insurance.  This announcement addressed the following issues which needed to be implemented by June 1, 2012:
    • Force placing insurance on delinquent accounts prior to and past 120 days.
    • Deductible amounts based on loan balance.
    • Borrower written communications (similar to Dodd-Frank)
    • Insurance carriers must be filed and approved in states where loans are serviced.
    • Borrower refunds must be processed within 15 days.
    • Servicers will no longer be reimbursed for tracking expenses.
    • No co-insurance clauses.



February 2012


Banks Agree to $25B Robo-Signing Settlement – 5 banks agree to the largest joint state-federal settlement in history.  The 5 banks include: Bank of America ($11.8B), JPMorgan Chase ($5.29B), Wells Fargo ($5.35B), Citigroup ($2.2B), Ally Financial ($310M).  The significance of this settlement is that Section III E provides guidance for force-placed insurance.  This guidance is very similar to the Dodd-Frank guidance discussed above with the addition of a requirement to offer Insurance escrow services to the borrower as part of the initial written notice.


Wells Fargo – QBE Insurance Class Action Lawsuit – According to the Harke Clasby & Bushman LLP website, the class action lawsuit alleges Wells Fargo and QBE Insurance conspired to inflate and profit from force-placed insurance when issuing more than 20,000 policies in Florida from 2009 to 2011.


Lawsuits Across the Nation – According to American Bankers, there were at least 10 lawsuits in progress against Bank of America, Wells Fargo, JP Morgan Chase, BRS Citizens and US Bancorp.


New York Department of Financial Services – Begins a probe into force-placed insurance practices in the state of New York.


Dodd-Frank – Section 1463 of Dodd-Frank modifies the Real Estate Settlement Procedures Act of 1974 to include 3 new sub sections under Section 6 to oversee force-placed insurance.  The Dodd-Frank bill enables the attorney generals (AG’s), and later the CFPB to have oversight of force-placed insurance.


Florida Lawsuits – A number of lawsuits were filed by individual borrowers where servicers had force-placed insurance on their properties.  Allegations include excessive rates, placement of redundant coverage, and coverage for perils not required in the loan documentation.  One case I looked into had rates that were more than 3 times higher than the highest rate our company can charge in Florida.


California Class Action Lawsuit – (Hofstetter v. Chase Home Finance, LLC) which challenges the practice to force place flood insurance on HELOCS with a zero loan balance.  The court issued an order allowing class action status in March of 2011