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Protective Advance Considered Forced-Placed?

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Question: 
When it comes to the rule of force placed insurance notification. Is doing a protective advance on a loan considered forced-placed?
Answer: 

If you are placing the coverage because your borrower has failed to provide it, and are passing the cost along to the customer either by separately billing the borrower for the premium (with or without an administrative fee) or adding the premium to the principal balance of the loan (again, with or without a fee), and you don't have an explicit request from the borrower to do so, I'd describe your actions as force-placement of insurance.

First published on 05/26/2014

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