Now it turns out some lenders haven’t merely been unhelpful; their actions have pushed some borrowers over the foreclosure cliff. Lenders have been imposing exorbitant insurance policies on homeowners whose regular coverage lapses or is deemed insufficient. The policies, standard homeowner’s insurance or extra coverage for wind damage, say, for Florida residents, typically cost five to 10 times what owners were previously paying, tipping many into foreclosure.
When I bought my truck, my lender tried to pull a stunt like this with my car insurance. Only I had insurance already–I had to show proof of insurance to drive the thing off the lot.
Their policy’s premiumn was four times mine.
It took me three months to get them to stop trying to swindle me. The car salesman, who was a neighbor of mine, later told me that he had heard that this was not an uncommon problem with them.
And they were not some finance company.
They were an old local bank.