NY A04557

Mortgage servicers cannot obtain force-placed insurance unless they have 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 (at least 30 days apart) to borrowers before obtaining force-placed insurance, with the second notice requiring a 15-day response period for proof of existing coverage.

Written notices must inform borrowers of their insurance obligation, state that the servicer lacks evidence of coverage, explain how to demonstrate existing coverage, and warn that the servicer may obtain insurance at the borrower's expense if proof is not provided.

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 coverage during any overlapping period.

Mortgage servicers cannot obtain force-placed insurance from affiliated entities, cannot split fees or accept referral fees, and cannot require insurance coverage exceeding either the last known coverage amount or the outstanding loan balance.