“Anonymous” Whistleblower Charges BofA With Large Scale Force Placed Insurance Scheme With Cooperation of Servicers

Ooh, this is ugly.

The charge made in this Anonymous release (via BankofAmericaSuck) is that Bank of America, through its wholly-owned subsidiary Balboa Insurance and the help of cooperating servicers, engaged in a mortgage borrower abuse called “force placed insurance”. This is absolutely 100% not kosher. Famed subprime servicer miscreant Fairbanks in 2003 signed a consent decree with the FTC and HUD over abuses that included forced placed insurance. The industry is well aware that this sort of thing is not permissible. (Note Balboa is due to be sold to QBE of Australia; I see that the definitive agreement was entered into on February 3 but do not see a press release saying that the sale has closed)

While the focus of ire may be Bank of America, let me stress that this sort of insurance really amounts to a scheme to fatten servicer margins. If this leak is accurate, the servicers at a minimum cooperated. If they got kickbacks, um, commissions, they are culpable and thus liable.

As we have stated repeatedly, servicers lose tons of money on portfolios with a high level of delinquencies and defaults. The example of Fairbanks, a standalone servicer who subprime portfolio got in trouble in 2002, is that servicers who are losing money start abusing customers and investors to restore profits. Fairbanks charged customers for force placed insurance and as part of its consent decree, paid large fines and fired its CEO (who was also fined).

Regardless, this release lends credence a notion too obvious to borrowers yet the banks and its co-conspirators, meaning the regulators, have long denied, that mortgage servicing and foreclosures are rife with abuses and criminality. Here’s some background courtesy Barry Ritholtz:

When a homeowner fails to keep up their insurance premiums on a mortgaged residence, their loan servicer has the option/obligation to step in to buy a comparable insurance policy on the loan holder’s behalf, to ensure the mortgaged property remains fully insured….

Consider one case found by [American Banker’s Jeff] Horwitz. A homeowner’s $4,000 insurance policy, was paid by the loan servicer, Everbank via escrow. But Everbank purposely let that insurance policy lapse, and then replaced it with a different policy – one that cost more than $33,000. To add insult to injury, the insurer, a subsidiary of Assurant, paid Everbank a $7,100 kickback for giving it such a lucrative policy — and, writes Horwitz, “left the door open to further compensation” down the road.

That $33,000 policy — including the $7,100 kickback – is an enormous amount of money for any loan servicer to make on a single property. The average loan servicer makes just $51 per loan per year.

Here’s where things get interesting: That $33,000 insurance premium is ultimately paid by the investors who bought the loan.

And the worst of this is….the insurance is often reinsured by the bank/servicer, which basically means the insurance is completely phony. The servicer will never put in a claim to trigger payment. As Felix Salmon noted,

This is doubly evil: it not only means that investors are paying far too much money for the insurance, but it also means that, as both the servicer and the ultimate insurer of the property, JPMorgan Chase has every incentive not to pursue claims on the houses it services. Investors, of course, would love to recoup any losses from the insurer, but they can’t bring such a claim — only the servicer can do that.

Note there are variants of this scheme where insurance is charged to the borrower (I’ve been told of insurance being foisted on borrowers that amounts to unconsented-to default insurance, again with the bank as insurer; this has been anecdotal with insufficient documentation, but I’ve heard enough independent accounts to make me pretty certain it was real)

One reason I am predisposed toward taking this at face value is I have been hearing widespread complaints from readers about forced place insurance. And the industry experts I consulted with thought BofA was a likely candidate since it already owned a large insurer. The narrative from BankofAmericaSucks is a bit wobbly on the roles of some of the parties:

Balboa Insurance Group, and it’s largest competitor, the market leader Assurant, is in the business of insurance tracking and Force Placed Insurance (aka Lender Placed Insurance, FOH, LPI, etc). What this means is that when you sign your name on the dotted line for your loan, the lienholder has certain insurance requirements that must be met for the life of the lien. Your lender (including, amongst others, GMAC, Aurora Loan Services [a subsidiary of Lehman Bros Holdings], IndyMac Federal Bank [a subsidiary of OneWest Bank], Saxon, HSBC, PennyMac [a collection agency started by former Countrywide Home Loans executive Stan Kurland after CHL and Balboa were sold to BAC], Downey Savings and Loans, Financial Freedom, Select Portfolio Services, Wells Fargo/Wachovia, and the now former owners of Balboa Insurance themselves…Bank of America) then outsources the tracking of your loan with them to a company like Balboa Insurance.

Yves here. Um, he names a long list of servicers, not lienholders, but we’ll continue.

Balboa makes some money by charging these companies to track your insurance (the payment of which is factored into your loan). If you do not meet the minimum insurance requirements set by your lienholder, Balboa Insurance places a force placed insurance policy on your loan. You are sent a letter telling you that you do not have insurance, and your escrow account is then adjusted for the inflated premium of a full coverage policy placed by Balboa’s insurance tracking group, run by Steven Ramsthel, Sr Vice President of Loan Tracking Operations & Customer Care at Balboa Insurance Group….

The release also alleges that regulators were complicit (click to enlarge):
Screen shot 2011-03-14 at 1.49.35 AM
And if these allegations are indeed accurate, they make a mockery of the settlement charade underway among 50 state attorneys general, Federal regulators, and what amount to banking industry crooks, aka servicers.

The writing style of the author (some typos, not that yours truly is one to make much of that sort of thing) and the errors regarding the roles of key parties will lead to questions regarding validity. But as indicated, previous abuses in this area, the past behavior of underwater servicers, and the complaints I have been hearing make this all too credible.

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  1. Paul Repstock

    The links are blocked, possibly because of traffic, although I did get to see the first one.

    I could well imagine that there is a lot of money not wanting this aired, if true.

    Perhaps HB Gary still has a job..:)

    1. Paul Repstock

      I got a Screenshot of answer to question, “Is it like a cult?”
      However am not able to post it here. There is a watermark of an Uncle Sam type figure with an “Annonymous” mask, imprinted in the screen.

    2. Yves Smith Post author

      I had to try a few times and still did not get all the images. But if you get the page and you click on those boxes with nothing in them but a Javascript question mark, you can see it in a new window.

      Sadly, the look is not anywhere near as convincing as the diplomatic cables. BofA may be able to stare this down. And the regulators will not acknowledge this exists unless a Congressman or two (or maybe some state AGs) takes it seriously. It’s quite possible BofA trades up on this release unless Anonymous says it has a lot more where this came from (which I understand to be the case…..).

      Also I am very puzzled by the release time chosen. This was well before opening time for the US stock market. This gives BofA a lot of time to do damage control before US markets open. They’d have been much smarter to release this during the US trading day if their purpose was to make life miserable for BofA. Or is Anonymous trying to take some sort of moral high ground and claim that it chose this time precisely so as not to be unduly punitive?

        1. Paul Repstock

          Do you mean because we do not know who is providing the links? Or because they might contain malware?

          KnotRP; I hve gotten to the point where I doubt everything I’m told. This is perhaps the turning point. We can either surrender abjectly, or open the door and let all the crap flow past the filter of our common sense and decency.

          We have one reference point. We all know that every government in the world is behaving in a disgusting manner. Once we know that, as I said above, ‘we have only two choices’. I suppose I am naive, but I will trust in the common sense and decency of the people. This has to stop now.

          The nasty and crooked people are only a small percentage of the population. I think that even the majority of the people working in the financial and corporate offices see it as evil and want to stop the abuse.

        2. Yves Smith Post author

          Why? A ton of people are trying to get to the site, the server is jammed.

          Even if the authorities are taking note of who is looking, it’s a monster list. And a ton will be flacks and attorneys for banks and investors curious as to what its about and mainstream journalists, all from home given the hour. There is so much noise in who is looking that there is no signal. The officialdom will be after Anonymous and the leaker, not the great masses driving by.

          1. KnotRP

            Why?….sorry, thought it was obvious enough to not require a snark, but apparently not…

            Seriously thought, didn’t anyone teach anyone else good clicking habits? Or are you already reformatting your hard drive and reinstalling your OS from CD, as I type this?

            Kidding…sort of….well, you never know.

            I do agree that those who desire security over liberty
            deserve what they get, but reinstalling an entire machine
            is kind of a pain…. ;)

          2. Paul Repstock

            That anyone would even feel concern about accessing the site is probably a result of the treatment they have done to Bradly Manning. It may be the reason they have allowed the story of that treament to get out?? Not to worry, there are not enough prisons to house all the people with guts. The government probably made a huge mistake, it is one thing to torture and abuse people they label terrorists, it is quite another to torture American servicemen for following their concience.

          3. Paul Repstock

            Well Knot, you have to admit, it isn’t a joking matter. A lot of people are afraid, and a lot more are confused about where they can find some truth in this world. I take it as a very good sign that WikiLeaks is endorsing the release. You should also know that Yves has a very good outfit overseeing the admin for this blog. I’m pretty sure they vetted the links before they were published.

          4. Yves Smith Post author


            I’m on a Mac with decent firewalls. Windows is impossible to make secure, Microsoft lost control of the kernel a long time ago. You have some hope of being secure on a Unix platform (Linux or a Mac, which is basically a proprietary form of Unix). Anything else you are taking risks.

    1. Paul Repstock

      No Tenney. You cannot, “Get into trouble for looking” at this or any other stuff. Besides, what do you want from life? Being afraid or hiding from the truth will help nobody in the end.

      This may or may not be “the truth”, if it is fake, it seems to represent a lot of time and effort on somebody’s part.

      The ‘alleged’ BoA exemployee sounds like a typical disgruntled employee. But, who wouldn’t be unhappy working in that sort of environment and being forced to hurt innocent people, day after day.

      The release does not appear polished like WikiLeaks, but that might be to the good. I think it is real. Any potential leakers may have trouble finding someone they can trust to publish stuff on the internet. Lets hope this shakes out some others for confirmation.

    2. Yves Smith Post author

      This worry about getting in trouble by looking is borderline trolldom. I wonder who started that meme. It’s patently bogus. By putting the stuff on the website, the operator of that site and the person behind it made it public. The people who released it are the ones at risk.

      1. leapfrog

        I agree about the meme. This little old armed-to-the-teeth grandmother of 3 has had ENOUGH; bring it. Come get me IF you can.

      2. Francois T

        “This worry about getting in trouble by looking is borderline trolldom.”

        Tell that to those who contributed to Wikileaks.

      3. Yves Smith Post author


        With all due respect, did a single person who read Wikileaks after they had been MADE PUBLIC get it trouble? The only effort was the pathetic one on behalf of the DoD and State Departments to forbid employees from reading, and that was a week or so after they had been released.

        The laws on confidential information are very clear: you can’t treat them as confidential once a leak or publication has made them non-confidential. You can’t punish people (except, perhaps by firing them, since the US is employment at will) for reading public information.

        Contributing to Wikileaks is not the same as reading it once released. I can’t believe you are feeding this sort of fear mongering, which appears designed to deter people from reading news that breaks through unauthorized channels.

  2. Tenney Naumer

    Who said I was afraid — I’ve already looked at it. I asked a simple question. There was a court decision recently wherein a company was permitted to look at all accounts that had looked at a particular site on a server provider’s site (or something like that).

    1. Paul Repstock

      I wasn’t critisizing Tenny. But, rest assured, a couple of thousand have hit the link through this site alone and the links are out in many places on the net. That is probably why we are having probs accessing the links. Hundreds of thousands of hits..:)

      1. OutsideLookingIn

        For those really concerned about maintaining on-line anonymity, Google the Tor Network. A bit of software on your machine routes your internet viewing through a maze of relays that makes it impossible for ‘the authorities’ to track you.

        Tor has been around a while, and AFAIK, is totally kosher.

        1. diddywa

          Better yet, _scroogle.org._ the project. Google tracks your every move, and never deletes it, and releases it or sells it on request, is my understanding.

  3. Tenney Naumer

    While I can sympathize with Anon’s aversion to Bernanke and certain things that go on at the Fed, I get the impression that Anon do not have a very sophisticated picture of the financial world. There are many other bugaboos out there, ones with which the public has already become familiar. This new one will require a rather steep learning curve — I wonder if anyone will show up to protest.

    1. Jessica6

      That was my thought too when reading some of their manifestos and reminds me of the saying “the road to hell is paved with good intentions”.

      It’s also the age of question of if you are going to take down a system what are you going to replace it with? I’ve known a lot of activists in my time who were long on grandiose idealism and short on clear, pragmatic ideas about what to set up in place of what exists now – and learn from history so as not to repeat similar mistakes (like people who insist on a return to a gold standard for instance).

      1. Jessica6

        I mean, ‘age old’…

        The other blunder is releasing this information when so much media attention is directed to what’s going on in Japan. They are lucky to be getting the coverage they are but really should have waited a week if they wanted to make a bigger impact.

      2. nonclassical


        neocons, for example, are intent upon destroying what IS-
        there was never an attempt to provide an alternative to..
        (as defined by “Project For A New American Century” dogma.

    2. Cogneclecticism

      As for this type of movement having a steep learning curve, and wondering if anyone will show up to protest, I actually have to disagree. It can be easily explained to the average person, and we are doing our best here http://www.USuncut.org Help us out. This is working, and it’s already made plenty of people’s head spin. We just need more media attention, and more people to help us with research. We aren’t very old, and we don’t have all the years of market experience all of you do. Again, please come help us out if you can.

      —Jackson, MS

      1. nonclassical

        USuncut-yes, as depicted in “The Nation”=effort to confront
        corporations not paying taxes, as successfully mounted in Britain..

  4. Expat

    It’s just a few bad apples who did a few questionable things. BOA is is good, solid, well-run company that is essential to the American economy and American democracy. I am sure a small fine to a few clerks at Balboa (the CEO surely could not have know or he would have not allowed such a thing) will set an example and prevent this kind of rare financial shenanigans from happening again.

    Luckily this kind of behavior is rare and small. God forbid we should see this on Wall Street at major institutions like GS or Citi. If that were the case, then I would be worried about the integrity and purpose of our financial system.

    1. Paul Repstock

      Absolutely right Expat! The only reason the bulk of the money the government is printing goes into the bank accounts of a very small number of people is that the ordinary people are too narrow minded and too weak to take their fair share.

      1. Expat

        I worked for Citi a while back. We had to spend a few days every quarter in anti-corruption/anti-money laundering/anti-cheating seminars. Basically, they were so busy stealing and cheating at the top that they were worried the peons would get caught and bring attention to the entire scheme.

        The guy who ran the seminar always showed the same picture of Chuck “Dancin’ Fool” Prince bowing to Japanese authorities as part of his penance for some pension mis-selling by by Citi Japan. After the third time, I finally said to the guy “Chuck Prince got paid $15 million the same year he bowed to a bunch of Japanese bureaucrats. For $15 million, I would have sucked their cocks.”

        I was fired from Citi a few months later for undisclosed reasons…maybe that was why!

    2. chris

      A few bad apples? more like try to find a few good apples in that bushel! Bank of American is anything but solid. Rember BOFA owns a servicing company, blamed the government for forcing them to buy companies, robo signing, misrepresentation, perjury etc

      I guess you were joking.

  5. Michel Delving

    Re: “this sort of insurance really amounts to a scheme to fatten servicer margins” . . . along with even fatter profits for subprime shorts. Servicers were well compensated for their complicity in rigging these billion dollar bets.

    1. Paul Repstock

      If you want to sink a ship, you need to pay the guys doing the dirty work of opening the valves??

      1. Paul Repstock

        I see WikiLeaks is giving credence to the story, so they must have some faith in it.


        What they didn’t say is that this as the BoA release the WikiLeaks has been holding for some months. It will be interesting to see if WL puts out their own information in the next few days.

    2. Yves Smith Post author


      You need to read up on our posts on this. You are incorrect about servicer economics. It’s a low margin business you can run at a decent profit if you are an efficient operator and you have a portfolio with few defaults. A portfolio with a high rate of defaults hemorrhages cash.

  6. anon

    I wonder whether there is not a “superinjunction” gag order on Julian Assange (and whatever media partner(s) he may have for the issue – I seem to recall he claimed to be working with the Financial Times but I can’t find a link now) regarding the banker’s hard drive he has claimed to possess.

    At first I thought that perhaps his lawyers had advised him not to begin a new release, especially one involving banking, while his extradition case is unresolved. But then it was leaked that Fred Goodwin of RBS had such a superinjunction preventing the press even from calling him a banker (!):
    Fred Goodwin gets superinjunction to stop him being called a banker

    And that, along with the idea that it would be silly for Assange to make idle threats involving a TBTF bank and the self-incriminating actions of Bank of America in the HBGeary debacle (which suggests the bank thought they had reason to worry), and, well, it really is curious.

    It will be interesting to see where this new leak leads. Even if there seems to be no immediate result, I can’t help but think that it’s part of a larger erosion. As some point, someone up there is going to have to realize that the price to enforce the world as it is today is too great. As in:

  7. FPG

    This is not new. Check out facebook and youtube. (Meridious99) An actual victim posted what happened to her. I tweeted it, but I guess everyone thought I was a spammer, so no one looked. Maybe our money is safer under the mattress, with the dog sleeping on it.

  8. h

    If this is even real and not a psych campaign by BOFA to discredit wikileaks/anonymous vis a vis dan rather

    1. chris

      Very well said Tao jonesing.

      You know they are all laughing at all the protests because they are beyond punishment. I can’t belive Bernie M is the only one in jail. What surprises me is that this crap has been going on for years. 15 years ago servicers and banks did the same thing. They always forced placed insurance and if you were lucky and the weren’t crooks you could get it changed without a fee. I have never heard of the 33,000 kind but I am sure many times homes have gotten liened to pocket the servicer come sale time.

  9. Tao Jonesing

    Please change “mortgage servicing and foreclosures are rife with abuses and criminality” to “mortgage servicing and foreclosures are rife with abuses that might get somebody fined but probably won’t.”

    When it comes to financial institutions, there is no such thing as “criminality” any more. They just get to do whatever they want.

    1. Yves Smith Post author

      The NY Supreme Court is, confusingly, its run of the mill trial court. And to keep your even more confused, its “supreme” court is the Court of Appeals.

      So this ruling is by one judge. He ruled MERS could transfer the note. A BK judge (Federal) in NYS has ruled otherwise.

      Pretty much no one buys that MERS can transfer the note. And MERS has started settling cases where it looks like a decision will go against it.

      So this probably reflects not so hot borrower defense.

  10. jal


    There goes another way of making money, (scamming), without doing honest work.

    If this keeps up capitalism will be killed.


  11. sgt_doom

    Yves says, “..Microsoft lost control of the kernel a long time ago.”

    Sorry, must disagree. When the sold the kernel documentation to the Chinese Totalitarian Capitalist State, they sold away control of the kernel.

    Big difference!

    Wisconsin weenies keep saying, “They’ve awakenedd a sleeping giant.”

    Give it a rest already. First, you were all brain dead, next you are still friggin asleep!

    In examining the demographic data after that vote for Gov. Wanker of Wisconsin, it is evdident that a number of union members voted for him. Remarkable, given his already established record of privatizing government & union jobs!

    1. Yves Smith Post author

      One of my former clients was one of the very top IT guys on Wall Street (also happens to have won a very important physics award and has some important inventions to his name) and choses to deal with Microsoft because it’s such a mess (but still widely installed) that he has no dearth of clients (Microsoft also involves him on some of their major projects at very considerable expense).

      This is his reading, and I strongly suspect his IT credentials and access to the guts of Microsoft’s code trump yours.

  12. pjwrites


    “If you do not meet the minimum insurance requirements set by your lienholder, Balboa Insurance places a force placed insurance policy on your loan. You are sent a letter telling you that you do not have insurance, and your escrow account is then adjusted for the inflated premium of a full coverage policy… ”

    In the early ’80’s, I worked for Barnett Bank in Florida. I was a Visa/MC merchant acct. exec, meaning I went to businesses and set them up to accept credit cards from their customers and negotiated the rate they would pay.

    I had been working at the bank for about a year when I got a notice that this had happened to me, due to Barnett Bank receiving notice from my insurance company that I had been canceled for non-payment. I went to my boss in shock, because I was fully insured and was worried I had done something wrong.

    He referred me to the dept. in the bank that was responsible and I walked right over to them to show my ins. papers. The gal explained, very matter-of-factly, how this “error” had happened.

    At the time, this was known in banking circles (or, at least, at BB) as “barging the account”. It was done at random and it was done every single day and it was done without any notification whatsoever from any insurance company.

    If the customer didn’t take action or thought they had made a mistake, sometimes they didn’t do anything about it. If it went past 30days without the customer complaining, then the bank “earned” the commission from the insurance company and the customer was S.O.L.

    I remember being very surprised at the time (it has happened to me twice since then, once on a car loan and once on a mortgage) that it was “allowed”, but I simply accepted it, because I was very young, naive, and trusting.

    I’m none of those things anymore.

  13. snickdog

    I would easily believe the same sort of thing has been happening across the board with BofA. I’ve been trying to get some help with my mortgage for over a year now (due to unforseen circumstances, I fell behind) and I can’t begin to count the number of times I faxed in supporting documentation, only to be told to fax it again as it didn’t get “attached” correctly! Soon they started saying that since I wasn’t sending in the documentation (which I was, and had fax receipts to prove it), I didn’t deserve a modification and they put me in the foreclosure track! So now I’m fighting foreclosure…and wondering what happened to the papers I sent in every month — including multiple copies of tax returns, etc. The stress of this whole mess is killing me. I asked a BofA rep today if they did this in order to drive people off the deep end so they’d just hand over their houses. Interestingly enough, I did not get an answer to that question.

    1. pjwrites

      Funny snickdog, I was told to keep my paperwork in a file close to my fax machine and also to scan and continually update all documentation to be e-mailed it as well.

      My realtor assured me the bank would ask again and again and again for the same paperwork, in an effort to stall/discourage you until the way was cleared for foreclosure.

      Sure enough, I’ve had to send the material over and over and over again, both by fax and e-mail (the e-mails are easier to send, but they will claim they can’t “open the attachment” or “there was nothing there”.)

      I’ve had enough of these practices over my lifetime. They can have the damn house and the thousands I invested in it. I’ve got my money stashed in a credit union now (and real assets, not phony ones), and have a simple savings acct earning not much of anything at all. But at least it hasn’t been taken stolen . . . yet. Inflation, taxes, and fees will get it eventually, of course. Right before I am supposed to collect SS no doubt, at which time SS will become “insolvent”.

      “Insolvent” in the same way that the “documentation was not received by the bank”, of course.

  14. Mildred Wilkins

    For any of you who:
    a. don’t believe that this is an industry wide practice
    b. are aware that it is used as a regular part of business
    and c. could happen to you tomorrow if you have a mortgage;

    I can attest to the truthfulness of all 3 comments above.

    I do foreclosure intervention training and counseling. Over the past 7-10 years I cannot count the number of consumers who have experienced a financial crisis leading to foreclosure not because they had some terrible thing like death, illness or unemployment occur but because their insurance spiraled out of control, their house payment got jacked up and they went into default–without clearly making the connection to the fact that their insurance had been switched–without their permission–to a company associated with their lender–for some crazy amount.

    They received a letter stating they didn’t have insurance–

    1. Mildred Wilkins



      It is simply a ploy by the lender/servicers to get more money off the backs of unsuspecting borrowers who don’t know how the “Bank Game” works and what to do about it when you are confronted with some of the nasty tricks they play.

      All banks do this. Regularly. With the specific goal of generating extra income where none is warranted.

      I for one am glad that the leaks have been made public and encourage any one who reads them to pay attention, share the information with any and everyone in your circle.

      Force-placed insurance is a characteristic of predatory lending. It is illegal in many states. It leads to foreclosure and it more common than the common cold.

      Being forewarned could prove helpful down the road.

  15. James Andersen, Attorney

    If this person who leaked this story is interested in acting as an paid expert witness in a trial against Balboa and GMAC in Texas , please have them contact me at once.
    James Andersen Attorney at Law
    Houston Texas

    1. chris

      This quote seems to be a bit off the mark. Do we actually need this scanal to enlighten us to the fact that the settlement with the 50 ags is a a mockery? I don’t think so, I think that is perfectly clear already on all fronts. AGs bought by bank money and carrots from the White HOuse

      “And if these allegations are indeed accurate, they make a mockery of the settlement charade underway among 50 state attorneys general, Federal regulators, and what amount to banking industry crooks, aka servicers”

      1. Yves Smith Post author

        In case you missed it, the right wing has been screaming the settlement is too HARD on the banks. And that is getting a lot of traction in the MSM.

      2. chris

        do banks even care about insurance on foreclosed or abandoned property? They have gotten paid by the government already.
        I have seen one bank owned property near the mountain get destroyed the past few years as it sits empty. Doesn’t look like any one would insure it now unless it was the banks own money shuffle boogie.


      3. chris

        Yeh I think there is no such think as Main stream media, that actually covers the views of the main stream or main street anymore. Everything is beholden to big money. I saw only one thing left for the little guy create some nice wealth starting from nothing….in real estate, and now the tbtf banks and the government has managed to screw the American dream into the dirt. But for some reason only a few people seem to give rip or even comprehend how much of a cash grab this entire meltdown has been……I am 44 and never thought I would see such blatant elitism and such great efforts to un level the already un level playing field. They have to leave something for the middle class. Something were people can have faith that hard work and persistence can get you the American Dream. Anyone who has seen their real estate investments crushed-especially in vegas- by 60 % or more will have a hard time seeing any free market opportunity left. Where does the little guy go? Certainly not the stock market that is being manipulated more and more every year by the big money. the one golden goose that was good for everyone is now gone, pilaged by Wall Street and TBTF banks. Where is there a feild left where someone can start with nothing and get wealthy with very little cash out of pocket? Real Estate was it, now buying a rental will be like getting your teeth pulled in your kitchen with a pair of pliers…..it won’t easy and it probably will get messy.

  16. LLS

    I worked in this industry for years and I can tell you that the leaker has no idea what he/she is looking at. I cannot attest to BOAs process, but I can tell you that this process is highly regulated and audited. The forced placed servicer not only sends several lettes before placing the new insurance policy, advising the borrower to contact their ins co. and have them send the insurance declarations page, the servicers also have staff devoted to doing nothing but calling the insurance companies themselves to try to get verbal confirmation of the policy, which will stop the forced placed process as long as a hard copy is received by the servicer within 90 days. The requirements that the borrower agreed to when they signed for their loan are simply being enforced, per the investor that agreed to fund the loan. Forced placed policies are expensive because the insurance is placed “sight-unseen”…no risk evaluation. Thus the risk to the insurance entity is higher. In the BOA emails, its clear that a computer/human error caused notices to generate in error, and BOA was trying to stop the erroneous letter history entries from hitting the loans, since the loans were never actually without adequate insurance. Removing the loan numbers would prevent the letter cycle file from placing a letter entry on these loans. (note the email talks about concern that a customer who received the erroneous letter may send an inquiry in on it and without history of a letter, it may cause confusion.)

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