NYS Expands National Probe Into Banksters' Force Placed Insurance Racket

The Associated Press reports:

• New York is expanding a national investigation and scheduled public hearings into so-called forced-placed insurance that add costs to homeowners seeking to avoid foreclosure.



• Banks and mortgage holders take out force-placed insurance when a homeowner misses a mortgage payment or fails to maintain homeowners insurance required by the mortgage. But state Financial Services Superintendent Benjamin Lawsky tells The Associated Press that the high cost of forced-placed insurance adds to struggling homeowners' debt and makes escape from foreclosure even more difficult.



• Lawsky also sees questionable profits and possible conflicts of interest. He's targeting several banks and mortgage service companies nationwide and is demanding justification for premiums.



• Lawsky says that even though the insurance costs homeowners more, it often provides less protection for the consumer while protecting the lender's interest.

Source: NY probes insurance in foreclosure.