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« Debt Ceiling Reached, World Doesn't End, Treasury Yields Flat, Geithner Remains A Fear Mongering Wall Street Stooge | Main | The End of Wall Sreet Accountability: A Response To Roger Lowenstein »
Monday
May162011

New From ANONYMOUS: Mortgage Insurance Fraud 101: How Banks Rip You Off And How To Fight Back

You may remember the Anonymous/BofA leak from a few weeks back.  We covered it here.  Part 1 of the "leak" turned out to be just a few emails from a former Balboa Insurance employee. (Balboa was bought by BofA in the Countrywide acquisition.)  But as an insider to the fraud machine, the leaker gave us a behind-the-scens peak at how banks and servicers use force-placed insurance scams to defraud borrowers.

Recently, the ex-BofA employee put together a post called Insurance Fraud 101, which explains in great detail how the force-placed insurance scams work.  Basically, the servicer does everything possible to screw you over, even when you've done everything right and made every single payment on time.  Some of the possible scenarios include:

  • If the servicer does not receive proof of insurance on a particular form by a certain date, an insurance policy will be force-placed on your home.  They will not call you to ask for proof, they will simply subtract the force-placed insurance premium from your escrow account.  If you don't have an account, they will create one and then bill your account for the amount of the insurance premium.
  • This one is really tricky.  Even if you have an insurance policy, if the policy expiration date is more than 12 months away, the servicer will only list it as a 12-month term.  At the end of the twelve months, unless you have again sent proof of insurance on a special form, guess what -- they will pretend your insurance has lapsed and bill you for the force-placed insurance.  And no, they won't call you to double check beforehand.
  • If you get a random letter saying that the servicer has no record of insurance, you must provide a copy of your policy that is dated before the date of the letter or else the servicer will assume your policy has lapsed.  Most likely the force-placed insurance policy will be back-dated, too.

The article lists a number of other possibile scenarios, but this is the ultimate take-away:

As you can see, without any intervention, miscalculation, or mistake on your part in any way, the banking and insurance regulations set for your bank have now caused your escrow account (whether pre-existing or not) to become negative, even if you already paid off your loan, due entirely to circumstances created by your bank. This occurs tens of thousands of times every single day in our country to honest and hardworking American citizens, causing many to have their home, vehicle, or investment property taken away from them illegally by the bank.

If you are in the position where you may lose (or may have already lost) your property, whether home, auto, or commercial, study any correspondence you have received from your bank. You may have the system-generated written proof of their fraudulent and illegal (per the Gramm-Leach-Bliley Act) activities already in your hand in the form of a force placed policy notification form where the effective date of the policy is older than the print date of the letter itself. Bring this to the attention of an attorney immediately.

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Reader Comments (20)

Hey there Daily Bail...

Obama got Osama and you wondered how they faked the moon landings.

We did get the requisite grainy videos and the media played possum as usual.
May 10, 2011 at 11:36 PM | Unregistered CommenterPatriot Games
We need for this to get more exposure...this would be another avenue for prosecution of the banks as well as grounds for another monetary settlement...only this time let's not let the state AGs run the talks...
May 11, 2011 at 1:17 AM | Registered CommenterDailyBail
These ass hats are really full of themselves, I think the longest line going to hell will be banksters..
May 11, 2011 at 1:59 AM | Unregistered CommenterS. Gompers
BoA charges me six bucks to cash a check drawn on their bank! A government check no less!! Just because I don't have an account with them. Scoundrels.
May 11, 2011 at 3:21 AM | Unregistered CommenterFlorida
http://www.haaretz.com/news/diplomacy-defense/obama-to-lay-out-new-middle-east-strategy-as-early-as-next-week-1.361119

Note: Gaddafi has not been heard from since April 30. Osama has not been heard from since May 1. Just sayin........
May 11, 2011 at 12:53 PM | Unregistered Commenterjohn
I currently work for a bank and am not part of the mortgage division, rather the insurance division. The fact is that force placed insurance is there as a protection for the lender in the event the homeowner does not maintain insurance on their own property, which in my opinion is absolute insanity...moreso with the current natural disasters on the rise. It is designed to protect the money the bank has loaned on the property in the event the home is destroyed by fire, etc. You still owe $200k, no insurance, the home is lost, now the bank is out. With that being said, I am not saying that ill-will is never present as that is life and every organization has it's level of greed. However; to say this is illegal makes it very apparent the author is uninformed as every person signs a release when they complete their loan documents allowing the bank to perform this function. If you don't want the bank to protect their investment at your cost, save the money yourself and purchase the home outright. If you can't do that as most, including myself cannot, maintain your homeowners insurance properly and ensure your bank is aware of the insurance. If you can prove you had insurance the entire time - absolutely no lapse..any lapse will cost you - you will receive a full refund of any charges related to the force-placed insurance. It's not a scam, it's not illegal, and it only happens to irresponsible homeowners. Wake up America and protect your own investment without the necessity of someone forcing you to do so. Do you also let your car insurance lapse? Same scenario. The states will not only fine you, but likely take away your driver's license and rightfully so. Understand? If not, sell your home, rent an apartment, and get Renters insurance for God's sake.
May 11, 2011 at 1:48 PM | Unregistered CommenterBank Employee - Not in Mortgage Dept
so what about when a bank, say BofA buys an insurance sub (like balboa) and then starts to use force-placed insurance as a tactic to gouge mortgage holders...read the story more closely...
May 11, 2011 at 2:02 PM | Registered CommenterDailyBail
Bank Employee,

We appreciate your taking time to comment. I don't know which bank you work for, and you probably don't want us to know, but the author of the piece we reference worked for Balboa, which was bought by BofA in its acquisition of Countrywide. What the author alleges here and elsewhere (as we understand it, he has been working closely the past few months with state AG's and foreclosure attorneys) is that Balboa's practices were both sloppy and intentionally deceptive. What he alleges happened in his department amounts to common-law fraud and is indeed illegal.

We are well aware of the legitimate purpose of force-placed insurance. Of course it is legitimate and lawful, but not when it's used to deceive and defraud people. There have been a number of well-documented cases where force-placed insurance was used fraudulently.

So, just to be clear, the author of the piece is NOT saying that force-placed insurance is illegal -- he himself worked in that business for a number of years. However, he is alleging, in some detail, how fraud is nonetheless perpetrated through shoddy and deceptive practices.
May 11, 2011 at 2:07 PM | Registered CommenterDr. Pitchfork
What I would like to know is who is not ripping us off these days. I used to have mortgage insurance and dropped it. My health insurance company takes money from my checking account every month but when it comes to reimbursing me, they find all kinds of excuses and delays. Out of $10,000 in health expenses from last summer, they only reimbursed me $69
May 11, 2011 at 3:37 PM | Unregistered CommenterAlice
I offer to your attention a film about six priorities of the generalized instruments of management by countries and people of Earth.
Six Principles of Global Manipulation
http://www.youtube.com/watch?v=0fF3TQ0lJnU

and:

Anti-Qur'an Strategy of the Bible Project Wheeler-Dealers
http://www.youtube.com/watch?v=_1wXgXwj3MI
May 11, 2011 at 3:40 PM | Unregistered Commentertank
Dear Bank Employee-Not in the Mortgage Department- I will personally pay you in real hard currency assets-meaning GOLD- THE SUM OF $100,000.00 if you can provide to me evidence-meaning the actual accounting and ledgering which would establish that your bank-does in fact really LEND money, rather than a simple, yet fraudulent series of bookkeeping entries based upon what??? A MONETIZED SIGNATURE UPON A PROMISSORY NOTE. Please post your response and a place and time to present your information and collect on the prize. Thank you and good luck, YOUR GONNA NEED IT:)
May 12, 2011 at 2:18 AM | Unregistered CommenterBank Loan Scam Buster
My bank and FEMA conspired to force place flood insurance on my property even though when I bought it, it was not in a flood zone. Only one square foot of my land is below 14'. My actual house is above 20'. I can't even use that one square foot in that it is an easement controlled by the city. I refused to pay, and they conspired with the credit rating company to destroy my credit and they raised my interest rates on my credit cards to 30%.

The jokes on them. I stopped paying my credit cards, mortgage payments and insurance. I found, with a good lawyer, there is nothing they can do to you. A bank I had never done business with foreclosed (Wells Fargo) but they couldn't produce the note. Their Jewish gangster (Ben Ezra-Katz) lawyers provided reams of fraudulent robo-signed documents that could easily be picked apart and proven that they never owned the loan. They did this to of tens of thousands of homeowners and got busted. They fired their gangster lawyers and now they think they get a "do over," but they are terribly mistaken. They will never overcome the fraudulent evidence that was introduced for the record.

I haven't made a payment in three years and my lawyer says after 5 years, I will own my house free and clear. Meanwhile, without a valid mortgage, I don't need to pay over $8,000 a year in insurance extortion. My lawyer charges $3,600 a year, my mortgage and forced insurances were $54,000 annually, do the math.
May 12, 2011 at 7:50 AM | Unregistered CommenterMiguel Grande
The insurance protection at the state level is often lacking. The states have set up consumer protection organization which gets people to put complaints into government organization which often can do nothing. Insurance commissioners who could order correction to "bad" things that can happen are never informed. I had a situation in connecticut when the insurance company denied a claim and stated I could take it to the consumer protection. THe policy had been canceled for nonpayment when my sister in law was in the hospital. The house was damaged when the oil ran out and the pipes froze. The insurance department understood the fact that the freezing happened during the time the policy was in effect. The insurance commissioner ordered the insurance company to immediately honor the claim.
In the case of buying insurance in the story the insurance commissioner will make a determination as to who let the policy lap and if it did not then order the bank to refund any money collected. The problem is they are never informed by the consumer.
May 12, 2011 at 8:39 AM | Unregistered Commentertom dee
Miguel Grande - I'd like the name and number of your lawyer!!!!!
May 13, 2011 at 10:24 AM | Unregistered Commentergringa
It's amazing someone hasn't gone all willy-nilly and put a 185g. slug in one of these bastards heads.
May 17, 2011 at 1:16 AM | Unregistered Commenterstevein Iowa
America........bend over and grab your ankles! Sharia Law is now going world wide:

http://creepingsharia.wordpress.com/2011/05/17/world-bank-designates-islamic-sharia-finance-a-priority-area/
May 17, 2011 at 11:30 AM | Unregistered CommenterTaterSalad
@ TaterSalad:

The Jewish Mafia and Zionists are raping you silly while you are distracted by this bullshit "War on Terror." Who controls the government, banking and media in this country?? They will suck this country dry and move on to the next one and laugh all the way while you are still scratching your head. You are playing right into their hands. Wake up and stop being a sucker.
Jul 21, 2011 at 9:14 PM | Unregistered CommenterBrian
Right after our refinance in 2005 Wells Fargo forcepleced insurance, even though we paid for a whole year of insurance and the Title Company, ourselves, and my insurance agent had sent proof of insurance, funny it did this right after we requested that the lender send us missing documents and a copy of the appraisal it used to qualify us.
We sent notice to rescind under TILA in 2008 (within 3 years) because we found fraud and non-disclosure of terms and parties in our paperwork. The notice was ignored, so we stopped paying 3 months later. 4 months after we stopped paying, Wells Fargo, misrepresenting itself to be the lender, filed foreclosure and 30 days later got an affidavit from its own attorneys to be a MERS officer to swear that MERS was acting on behalf of the refinance lender and had transferred the Note and Mortgage, and our property, to Wells Fargo 2 weeks before foreclosure was filed (backdated affidavit), and 8 months after our notice to rescind under TILA. Wells Fargo destroyed our finances by doing so. Wells Fargo is admittedly only a servicer, not our lender and we have no agreements whatsoever with Wells Fargo. The "lender" admittedly transferred the Note to Lasalle Bank (the REAL lender, undisclosed at closing) in 2005, and the Note was securitized (we still do not know who the owner is in spite of years of asking, in and out of court). Which means the affidavit is not only backdated, but entirely false. Yet, Wells Fargo was still force-placing insurance on our property.
In 2009 we filed Federal complaint against all involved and Unknowns. Every single year, Wells Fargo force-places an insurance policy on our home although it is a third-party with no right to do so. The Mortgage (which was rendered void by operation Regulation Z law) makes no mention of Wells Fargo and says nothing about any lender authority being given to a servicer.
Yet, to this day in 2012, Wells Fargo continues to force-place insurance every single year. We have no obligation to give Wells Fargo any information about who our insurer is, but we have told Wells Fargo (and its American Security Insurance) to cancel cease the force-placements. Since 2009 we have also notified them that any fund advances, which Wells Fargo continues to make absent our written agreement with Wells Fargo, will be considered non-taxable gifts to us and by continuing to advance such funds Wells Fargo is agreeing that we are not liable to repay any of those funds.
Our Federal case is ongoing, as is Wells Fargo's Cook County foreclosure case (although it is not a real party). We are pro se in both cases, not by choice but because we cannot afford an attorney and both Judges denied appointed counsel while knowing that we cannot afford an attorney. Early in 2008, no attorney would listen to us, and now that everybody knows what really happened (is still happening) and the shit is hitting the fan, no attorney wants to touch our cases because we have been pro se for over 3 years. And we are going broke and have no future for our kids, to boot.
The Illinois Judges seem to be entirely pro-predatory lender/servicer. The latest order from the Federal Judge basically says we must settle orally or by email, or be deposed.
We will be deposed! Like hell if we are going to agree to an oral/email settlement where all parties and terms are not disclosed or explained to us - we will not be shafted in a settlement just as we were back in 2005 at the refinance.
Something really funny, our case is over 3 years old, but in spite of our noticing the Judge that the Defs have not filed required Rule 7 disclosures and have not named the true owner of an interest in the Note (and even received payment for the Note DURING the case, for an amount IN EXCESS of the original refinance amount), the Judge ignores this and refuses to docket our request to name the Unknown Parties (Bank of America, PNC Bank, others). Fraud in the courts.
I wonder if I can place an insurance policy on the CEO of Wells Fargo - why not? If what Wells Fargo is doing is legal (third party placing insurance policy on our home against our will and without our agreement to allow it to do so), why wouldn't I be able to order an insurance policy against my neighbors house or the CEO of Wells Fargo? What law makes this illegal and a CRIME - pray tell so I can add it to our lawsuit, or file another.
Apr 14, 2012 at 1:50 AM | Unregistered CommenterCindy

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