- Posted by Hostmaster
- On May 2, 2019
- 0 Comments
Bad News For Homeowners
The purchase of Seterus’ mortgage servicing business by Nationstar, which now does business as Mr. Cooper, which was effective March 1, 2019, has meant bad news for at least one homeowner in Florida. That man was unable to obtain insurance on his home years ago because of its’ age. As a result, Seterus, who was his mortgage servicer at the time, secured insurance for him. In the industry, this is known as forced placed insurance. Because there is no competition between providers, forced placed insurance comes at a higher cost to the homeowner.
Last December, the homeowner received a copy of the policy, renewed for a year. The annual cost was $1,100. Like most homeowners, he paid for the insurance through a monthly escrow. In February, he received notice of the transfer of the servicing of his mortgage from Seterus to Mr.Cooper, effective March 1, 2019, the same day Mr. Cooper bought out Seterus completely.
Shortly thereafter, the homeowner received a letter from Seterus, dated March 1, 2019, indicating that his insurance was cancelled. The reason given was the servicing transfer. Since then, Mr. Cooper has sent him a letter stating that unless he obtained insurance (which he had), it would secure forced placed insurance at an annual cost of $1,400, $300 more than the coverage he had in place. This may not be a lot of money to many people, but to this homeowner who is on a fixed income, it is. We will investigate this matter further, and will report on developments in upcoming articles.