SunTrust Mortgage Issued Subpoena for Force-Placed Insurance Practices
Force-Placed Insurance (sometimes called Lender-Placed Insurance) is a practice of many big banks, large lenders, and loan servicers, where these institutions forcefully charge a borrower for hazard insurance, wind insurance, and/or flood insurance when lenders, including SunTrust Mortgage, or servicers believe the insurance coverage has either lapsed or is not sufficient. Most standard residential mortgages require borrowers to maintain homeowners insurance, flood insurance, or wind insurance on his or her residence. If the borrower fails to do so, SunTrust Mortgage (or SunTrust Bank) will purchase force-placed hazard insurance, force-placed wind insurance, or force-placed flood insurance to allegedly protect SunTrust’s “financial interest.” The premiums for SunTrust force-placed insurance policies typically cost as high as 10 times the amount of normal insurance policy. SunTrust Mortgage claim these excessive premiums are the responsibility of the borrower and typically tack them onto the borrower’s loan. This is true for force-placed hazard insurance, force-placed flood insurance, and force-placed wind insurance.
Example of SunTrust Mortgage Force-Placed Insurance Practice
In some instances, banks partnering with the major force-placed insurance providers (QBE or Assurant) have forcefully charged borrowers for force-placed insurance policies (or lender-placed insurance) in excess of their property’s value. For example, an American Banker article shows QBE forced a SunTrust Mortgage Inc. borrower to buy a $230,000 force-placed insurance policy on a house that the Broward County, Fla., property appraiser lists as worth less than $82,000. Should the borrower eventually fail to pay QBE or SunTrust the $10,000 annual force-placed insurance premium, the government will, in the form of losses to Fannie Mae, which guarantees the mortgage. Further, lenders like SunTrust Mortgage typically unilaterally charge this $10,000 premium to the borrowers’ escrow account, or if the borrowers do not have an escrow account, the bank will create an escrow account with a negative balance.
Legal Help for SunTrust Mortgage Force-Placed Insurance Victims
If you or someone you know has been charged a premium for a SunTrust Force-Placed Insurance Policy, you may be able to recover damages. Please be aware that there are strict time limitations that likely apply to your claim for SunTrust Mortgage Force-Placed Insurance, so contact our Consumer Protection Lawyers immediately to discuss your rights and options. Our consumer protection lawyers are actively litigating numerous force-placed insurance lawsuits, and have been protecting the rights of consumers for over 34 years. Contact our consumer protection attorneys toll free at (888) 252-0048 for a free legal consultation, or complete our Online Free Legal Consultation form for more help with your force-placed insurance claims.