77-Year Old Homeowner Struggles To Keep Roof Over Her Head After Being Shoved By Bankster Into Force-Placed Insurance

In St. Paul, Minnesota, the Star Tribune reports:

• Compared with her neighbors' well-tended homes in St. Paul's historic Cathedral Hill neighborhood, Jean Keeney's 19th-century property looks a bit forlorn.
  
  The lot is overgrown, paint is peeling and two ragged posts are all that's left of the front railing. It has been years since Keeney could afford to maintain her home the way she wants. At 77, an age at which the former stockbroker thought she would be comfortably retired, Keeney is toiling away as a substitute teacher, trying to keep her lender from foreclosing on her home.
  
  "I would rather not be working, but I need the money," she said.
  
  Like thousands of other Minnesotans, Keeney's financial problems involve force-placed insurance, a little-known form of coverage generating billions of dollars in profits for insurers and banks -- but getting little scrutiny from state regulators.
  
  Billed as a policy of last resort, force-placed insurance is routinely imposed on homeowners by lenders when property is not covered against tornados, floods and other hazards. The coverage can cost 10 times as much as typical homeowners insurance despite offering less protection.
  
  Across the country, the high premiums are pushing hundreds of thousands of vulnerable homeowners closer to default as the costs are added to their monthly mortgage.
  
  When Keeney's homeowners policy lapsed, she was pushed into a forced-placed policy at an annual cost of $4,185, well above the $1,655 she used to pay State Farm. "It's ridiculous," she said.
  
  Minnesota officials concede they have no idea whether those rates are reasonable. Unlike most states, Minnesota regulators allow insurance companies to set their own rates on force-placed insurance without requiring either state approval or public disclosure. That means regulators don't check whether insurers have padded the bills.
  
  In an interview, Commerce Commissioner Mike Rothman said he was alarmed by the Star Tribune's findings and pledged to make force-placed insurance "a top priority." The department is reviewing its policies, and has requested current rates and other documents from firms providing force-placed insurance in Minnesota. "We want to make sure we are protecting consumers from inappropriate practices," Rothman said.
  
  Regulators in other states have also begun scrutinizing the industry after consumer advocates complained about alleged price gouging and questionable ties between insurance companies and lenders.
  
  Mortgage lenders typically receive a commission from carriers when they push their clients into force-placed coverage. Those commissions and other payments are big business for banks.
  
  For example, JP Morgan Chase -- one of the nation's biggest mortgage lenders -- disclosed in May that it earned $663 million in the past five years by charging commissions of up to 20 percent on each policy and splitting profits with its insurer.

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• When asked if the $663 million that JP Morgan earned from force-placed insurance created an "incentive" to keep homeowners in such policies, Segnini said "no," but conceded the point. "I can see how somebody would think that."

For more, see Forced insurance policies cripple Minnesota homeowners (Lenders slap struggling homeowners with sky-high insurance rates).