The New York state Department of Financial Services yesterday proposed legislative changes to further protect homeowners from mortgage-insurance abuses.
New rules would bar insurers from issuing policies on homes that are mortgaged by a company affiliated with the insurer. Insurers would not be permitted to pay commissions to mortgage lenders or any of their affiliates.
Two years ago, the department looked how banks or mortgage servicers often acquired insurance policies only when financially troubled homeowners failed to maintain required coverage. Such policies generally had higher premiums, the cost for which were passed along to the homeowner. [AP via Crain's] — Mark Maurer