We currently don't force place hazard insurance because we have an impairment policy that would cover us in the event of insufficient or canceled/expired insurance. My read of the new rules is that we would still have to monitor and force place insurance where needed. I didn't see anything that speaks to a blanket policy that would cover existing loans allow getting us out of this requirement. Does anyone have any insight into that?

Also, if we force place, do we add the premium on to the next 12 months worth of payments or add it as a lump sum to the loan as a payoff fee (trying to avoid a MIRE event, similar to Flood rules)?

The force placed rules apply if you force place. If you don't, you can ignore them. There is no rule that says you must. It is a safety and soundness decision. If you have a blanket impairment policy you can happily go on your way.

I should've said "generally". We only force place hazard insurance if the customer has their insurance escrowed AND we receive notice that their policy has lapsed or cancelled. There are only a few that we currently have force placed insurance on, and they are being tracked.

So, would the same be true- on whatever we force place, we have to follow the rules, but if we in general don't force place, we don't have to follow the new force placement rules? and more importantly, we don't have to start?

For the mortgages on which you do force place, the rules apply. The fact that there is an escrow account in place and either the consumer or insurance company cancelled the original policy, that fact alone does not require you to force place insurance.

This is not a general rule. If you do, you have to follow the rules. If you don't, you don't.

Plus, if you are escrowing - how can a policy lapse?

I clarified with my Loan Ops group, and typically, if it is being force placed, it is because the insurance company has dropped the policy- all of our force placed policies are in this category...

Thanks for clarifying- sounds like we have a very small population of loans on which we have to follow the new force placement rules, which is great news!