SunTrust Mortgage Issued Subpoena for Force-Placed Insurance Practices
SunTrust Force-Placed Insurance
Force-Placed Insurance (sometimes called Lender-Placed Insurance) is a practice of many big banks, large lenders, and loan servicers, where these institutions forcefully charge a borrower for hazard insurance, wind insurance, and/or flood insurance when lenders, including SunTrust Mortgage, or servicers believe the insurance coverage has either lapsed or is not sufficient. Most standard residential mortgages require borrowers to maintain homeowners insurance, flood insurance, or wind insurance on his or her residence. If the borrower fails to do so, SunTrust Mortgage (or SunTrust Bank) will purchase force-placed hazard insurance, force-placed wind insurance, or force-placed flood insurance to allegedly protect SunTrust’s “financial interest.” The premiums for SunTrust force-placed insurance policies typically cost as high as 10 times the amount of normal insurance policy. SunTrust Mortgage claim these excessive premiums are the responsibility of the borrower and typically tack them onto the borrower’s loan. This is true for force-placed hazard insurance, force-placed flood insurance, and force-placed wind insurance.