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Borrower's Lapse in Hazard Insurance (Dodd-Frank)

Question: 
This question was asked and answered back in April 2012, but I was wondering if there had been a final proposal to answer this question? If our institution waits the 45 days required after both notices regarding a borrower's lapse in hazard insurance are sent, and then force placed, can we back date the policy so that it is in effect the day of cancellation and still be in compliance with the Dodd-Frank Act? The second part is this: if this is not in compliance, how can we structure force placement of the insurance, and the notices required, so as to be in compliance, and still make sure the home is covered? Basically, would our institution have to foot the bill for that 45 days?
Answer: 

by Randy Carey:

Official Interpretation

37(c) Requirements before charging borrower for force-placed insurance.

37(c)(1) In general.

Paragraph 37(c)(1)(i).

1. Assessing premium charge or fee. Subject to the requirements of § 1024.37(c)(1)(i) through (iii), if not prohibited by State or other applicable law, a servicer may charge a borrower for force-placed insurance the servicer purchased, retroactive to the first day of any period of time in which the borrower did not have hazard insurance in place.

Answer: 

by John Burnett:

Note that the rule allows your charge to be retroactive to the date of the forced coverage. It does not provide a way for you to place back-dated coverage. So you put the coverage in place right away and get reimbursed when you are able to charge the customer for the premium and/or fees.

First published on 01/20/2019

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