As the Consumer Financial Protection Bureau plans to issue new rules on force-placed insurance in the coming year, State Employees’ Credit Union (SECU) announced that less than 1 percent of its mortgages have needed force-placed insurance.
About 0.6 percent of mortgages require force-placed insurance for more than 60 days at the credit union, according to a release.
Mandatory escrow requirements, direct contact with members upon initial coverage cancellation, and the credit union’s ongoing Mortgage Assistance Program are all credited as reasons for why the company has maintained a low percentage. All SECU lending, servicing and collections officers are also salaried.
“SECU has always been proactive in reaching out to members when any insurance cancellation occurs. The ultimate goal for us as a financial cooperative is to avoid any lender-placed insurance and help members budget for the annual cost of homeowners insurance through a required escrow account,” said Mark Coburn, SECU’s SVP of loan servicing.
According to the release, a review of recent force-placed claims revealed that on average, SECU members’ insurance cost is generally $.435 per $100, compared with a force-placed premium of $.85 per $100.
The North Carolina-based nonprofit is a financial cooperative owned by its members and a servicer for more than 125,000 mortgages with balances in excess of $12 billion.
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