NY A03066

Mortgage servicers cannot obtain force-placed insurance unless there is reasonable basis to believe the borrower failed to maintain required hazard, flood, or homeowner's insurance.

Mortgage servicers must send two written notices by first-class mail (the second at least 30 days after the first) before obtaining force-placed insurance, and must wait 15 days after the second notice for borrower response.

Written notices must inform borrowers of their insurance obligation, state the servicer lacks evidence of coverage, explain procedures to demonstrate existing coverage, and warn that the servicer may obtain insurance at the borrower's expense.

Mortgage servicers must terminate force-placed insurance and refund all premiums and related fees within 15 days of receiving evidence of the borrower's existing insurance coverage for any overlap period.

Mortgage servicers cannot obtain force-placed insurance from affiliated entities, cannot split fees, and cannot give or accept referral fees in connection with obtaining force-placed insurance; insurance coverage cannot exceed the greater of the last known coverage amount or the outstanding loan balance.