"In that event, the lender would either have to pay the higher premium or place the insurance with an insurer that will cover the hazard, again with funds from the escrow account. In any event, when the funds are disbursed from the escrow to pay the premium, the insurance is not force-placed and the rules for force-placed insurance do not apply."
I agree with the first part, but if the lender and not the borrower places the insurance with another insurer, explain to me how that is not force placed insurance?? Even the small servicer exemption indicates:
(iii) Small servicers. Notwithstanding paragraphs (k)(5)(i) and (k)(5)(ii)(B) of this section and subject to the requirements in § 1024.37,........
1024.37 are the force placed insurance rules.
I think their blog post is wrong.
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