*Loan,banking and credit>>>homeowner insurance

Pros & Cons of Forced Place Homeowners Insurance ?

Does anyone know of a good article/website out there outlining the pro's and con's of forced place homeowner's insurance.

n the event the borrower has not been able to obtain a homeowner's policy for his/her property, it is necessary for the lender to make sure the home is properly insured for a minimum of the mortgage balance to protect the assets of the lender. This process is referred to as force placing insurance.
The requirements for maintaining appropriate insurance are part of most mortgage contracts. Force-placed insurance was designed to be a temporary coverage until the homeowner could obtain their own policy.
Force-placed insurance is not as good as a homeowner policy because it does not cover the contents of your home, only the lender's interest in the property. Force-placed insurance can be more expensive than a regular homeowner's policy. The homeowner is responsible for paying for the force-placed coverage because it is the responsibilty of the homeowner to make sure there is adequate coverage on the home at all times. The premium will be paid from your escrow account, added to your monthly payment or added to your outstanding mortgage balance. However, if you provide us with proof of regular coverage for the period in question, you will not be charged for the force-placed coverage.

The other person answered that it is way more expensive that regular homeowners insurance and offers no coverage for the homeowner the lender is only insuring their own interest. Generally, a lender will not force insurance coverage unless the homeowner does not get coverage or lets their coverage lapse. Source(s): http://oci.wi.gov/pressrel/0502home.htm...
http://www.mlnusa.com/customers/info_faq...
http://www.bankersonline.com/lending/gur...

I don't know of any article or website but I know there are no pros for the consumer. The bank will force place the insurance and pass the cost on to you. If your house burns down, the bank gets the money you don't get anything. It is a huge con to the consumer because it generally costs the homeowner twice as much and they will be out a lot of money if something happens to the house. Also, the bank can still take you to court if something happened to the property.
10 years of force placing insurance
Nope.

I can't really think of a Pro, except for the bank. Cons, well, it doesn't cover the homeowner, only the bank. And it costs a way, way lot more than regular homeowners insurance.

Faye says that this isn't true, but I have WRITTEN these policies on behalf of lenders, and it is. The other person who says it has ALSO written these policies on behalf of lenders. I've never SEEN a force placement policy that offered any coverage to the homeowner.

So in MY experience, Faye is off on this.
agent, 21+ years