In response to the CFPB's Mortgage Servicing final rules, which includes lender-placed insurance, ABA's senior vice president for the office of insurance advocacy, Kevin McKechnie, offered a statement outlining our concern that the CFPB's rule "goes beyond what the Dodd-Frank Act intended."
McKechnie stated, “The notice provisions in the Dodd-Frank Act were meant to provide borrowers and servicers with a roadmap for avoiding foreclosure and the expense of having hazard insurance placed against their collateral. Rather than defining this as a shared responsibility between borrowers and their bank, the CFPB has chosen to issue a mandate requiring servicers to advance a borrower’s homeowners insurance premium. This prohibits servicers from force placing coverage as long as the servicer can continue the borrower’s insurance policy."
Read the complete statement