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GFE of Borrowers with Forced Place Insurance

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  • #4003
    tstrait
    Participant

    We use a service to manage our insurance. We recently got a notice that said:

    “The new regulation requires a Good Faith Estimate (GFE) of the borrowers force placed insurance premium be included in the second warning notice.” (starting January 2014)

    Perhaps I have missed this in all the informaiton I have been getting lately, but this is the first I have heard of this. I am assuming that they are using “GFE” as a general term and not as a term that is generally referenced in RESPA.

    #4007
    rcooper
    Keymaster

    I believe they are probably referring to the new mortgage servicing requirement under the new 12 CFR 1024.37(d)(2). You can find it here: https://files.consumerfinance.gov/f/201301_cfpb_final-rule_servicing-respa-amendments.pdf .

    This is effective January 10, 2014.

    #4043
    cjernigan1211
    Participant

    Can you please clarify the exceptions to force-placed insurace in 1024.37(a)(2)? It is my understanding the first exception is for flood insuracne; howerver I am extremely confused about the other two exceptions.

    Also, am I correct these transactions only cover consumer credit transactions covered under RESPA? Thank you so much for your help.

    #4047
    rcooper
    Keymaster

    This is referring to hazard insurance being paid as part of an escrow agreement or other agreement that the borrower and lender have in place for the lender to pay the hazard insurance (perhaps the borrower has requested the lender to make payments, on the borrower’s behalf, for a policy which the borrower had already established, etc.).

    Yes this only applies to consumer loans covered by RESPA.

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