This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

DFS Force-Placed Insurance Legislation is a Joke

The Loan Servicer is paid by the Investor to perform any required service on his loan portfolio. They agree on a documented contractual cost to service each loan, along with other parameters in what is called a Service Level Agreement (SLA). The Loan Servicer figures out the most profitable way to utilize its resources and outsources certain specialized functions to third-party vendors. One such process is any operations, customer service, process development, quality control, auditing etc. of insurance and escrow services to an Insurance Tracker company.

The Insurance Tracker has an SLA with the Loan Servicer to provide a lower cost per loan. The Tracker accomplishes this through hidden kickback schemes and by sometimes eating a loss because it doesn't matter. Insurance tracking is less than 10% of Assurant/QBE First's profits. The lion's share comes from their Force-Placed Insurance business. Think about the scenario this creates. These companies are paid $1 to decide whether or not you need their $100 insurance. I can't even blame Assurant/QBE for squeezing every last dime out of the American public at this point.

If you paid me $1 to decide whether or not you owe me $100, I would find the same answer more and more often as the decades pass by too!

A fine won't fix this problem, especially not such an insignificant one. The only way to fix the problem is to disallow Insurance Trackers to act as Force-Placed Insurers. The product of Force-Placed Insurance also needs to be abolished and replaced by a service of Force-Placing Insurance. I'd rather be charged $35 for the convenience of having the bank price shopping insurance for me. They have access to all of the information necessary on the house. They're the ones setting the rules for the insurance companies. They have the market clout. Why is this not happening?

It's only when these types of real changes are implemented that we can truly recover from the crimes the financial sector continues to commit.

Brian Penny is a former business analyst at Bank of America turned whistleblower. He documents his experiences living in a van, working with Anonymous, training to be a yogi, and fighting the banks on his blog.
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.28 -0.45%
FB $103.63 1.70%
GOOG $688.38 0.77%
TSLA $146.22 -2.80%
YHOO $26.89 0.49%


Chart of I:DJI
DOW 15,778.04 +117.86 0.75%
S&P 500 1,843.12 +14.04 0.77%
NASDAQ 4,289.8060 +22.9690 0.54%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs