HARRISBURG, DAUPHIN CO. (WOLF) \u2014 Pennsylvania has joined financial regulators across the country in a $15.5 million settlement with a Montgomery County-based mortgage servicer accused of improperly charging thousands of homeowners for insurance coverage they already had.<\/p>\n
The Pennsylvania Department of Banking and Securities announced the settlement with NewRez LLC, a Fort Washington-based mortgage servicing company.<\/p>\n
Regulators from 47 states participated in the action.<\/p>\n
According to the department, a multistate examination found NewRez improperly imposed so-called \u201cforce-placed\u201d insurance on more than 4,200 borrowers nationwide despite those homeowners already having active insurance policies.<\/p>\n
The improper charges caused approximately $4.5 million in consumer harm, according to state regulators.<\/p>\n
NewRez has already paid more than $4.5 million to affected borrowers through its own identification and reimbursement efforts. Pennsylvania officials said impacted consumers in the Commonwealth have been reimbursed.<\/p>\n
Under the settlement, the company will pay nearly $11 million in additional penalties and costs and will be required to strengthen its monitoring and controls surrounding force-placed insurance.<\/p>\n
Pennsylvania’s Department of Banking and Securities will receive $211,066.08 from a $9.9 million fine assessed against the company.<\/p>\n
The department will receive another $87,063.15 because Pennsylvania was among the states involved in examining the company, bringing the state’s share of the penalties and administrative costs to approximately $298,129.<\/p>\n
\u201cUnder Governor Shapiro\u2019s leadership, Pennsylvania remains a leader in consumer protections, and this settlement underscores the critical function of state regulators in overseeing financial licenses, demanding industry accountability, and safeguarding consumer rights for homeowners,\u201d Banking and Securities Secretary Wendy Spicher said.<\/p>\n
What is force-placed insurance?<\/p>\n
Force-placed insurance can be purchased by a lender or mortgage servicer when a homeowner’s required insurance policy has expired, been canceled or does not provide sufficient coverage and the borrower has not obtained replacement insurance.<\/p>\n
The coverage protects the lender’s financial interest in the property.<\/p>\n
However, state officials said force-placed insurance is typically significantly more expensive than insurance homeowners obtain themselves.<\/p>\n
In this case, regulators found thousands of borrowers were charged for force-placed coverage even though they already maintained active homeowners insurance.<\/p>\n
As part of the settlement, NewRez must implement enhanced monitoring and other measures designed to prevent similar problems with force-placed insurance.<\/p>\n
Pennsylvania residents who believe they have been harmed by a financial company can contact the Department of Banking and Securities at 1-800-PA-BANKS (1-800-722-2657).<\/p>\n
Consumers can also submit complaints through the department’s online Consumer Help Center.<\/p>\n","protected":false},"excerpt":{"rendered":"HARRISBURG, DAUPHIN CO. (WOLF) \u2014 Pennsylvania has joined financial regulators across the country in a $15.5 million settlement…\n","protected":false},"author":2,"featured_media":266387,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[28,30,29],"class_list":["post-266386","post","type-post","status-publish","format-standard","has-post-thumbnail","category-pennsylvania","tag-pennsylvania","tag-pennsylvania-headlines","tag-pennsylvania-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/266386","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/comments?post=266386"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/266386\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media\/266387"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media?parent=266386"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/categories?post=266386"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/tags?post=266386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}