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#2304888 - 01/10/25 10:00 PM Force Placed Insurance
Anonymous
Unregistered

Is having different force placed insurance plans for different risks of borrowers a fair lending issue?

For example, one insurance policy might cover the vehicle for the borrower and the lender while the other (for a riskier borrower) only provides coverage to the lender?

To me, this seems like a really slippery slope.

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#2304889 - 01/10/25 10:08 PM Re: Force Placed Insurance Anonymous
Scott Chicoine Offline
100 Club
Joined: Jun 2022
Posts: 121
Forced placed insurance or blanket collateral coverage usually only covers the lenders interest.

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#2304893 - 01/10/25 11:15 PM Re: Force Placed Insurance Anonymous
Anonymous
Unregistered

I understand that, but we have one on our non-high risk loans that covers lender and borrower's interest.

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#2304895 - 01/11/25 02:10 PM Re: Force Placed Insurance Anonymous
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 84,928
Galveston, TX
What is a non-high-risk loan if the borrower cannot even insure the collateral?

How and why did this happen? A bank should have a specific policy as to how, when and what agency is used for force placed insurance. How can one loan be treated differently? When you treat one or more loans different than the majority of your loans, then you have fair lending risks.
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