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#2254046 - 05/18/21 04:51 PM Collateral Protection Insurance Question
Mel in WA Offline
Diamond Poster
Joined: Mar 2013
Posts: 1,113
When a borrower is not providing collateral insurance and we are required to force place, the premium is added to the principal balance. This is clearly outlined in our Agreement to Provide Insurance. However, we have found mistakes during this process and the force-placed premium had to be reversed. I have concerns regarding consumer harm and UDAAP, since the borrower paid interest on the increased principal amount. Is it a standard practice to add force-placed premiums to the principal balance?

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#2254067 - 05/18/21 06:53 PM Re: Collateral Protection Insurance Question Mel in WA
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 76,979
Galveston, TX
If you do and you make a mistake, then the reversal transaction would be backdated to the original force placement and date and subsequent transaction would then be reapplied.
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