Force Placement of Homeowners Hazard Insurance

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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 place, 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 â€œfoot the billâ€ for that 45 days?

Answer:

There currently are no regulations that address the force placement of hazard insurance other than flood hazard insurance. The DFA provisions regarding hazard insurance have not yet been released, even in proposal form. The force placement of hazard insurance would be governed by your loan agreement and State law at this point.

First published on BankersOnline.com 4/2/12