What is Lender-placed or Force-placed insurance? ??

Lender-placed or Force-placed insurance is an insurance policy that a lender places on a property owner's behalf when the property owner's insurance policy has lapsed, been cancelled, or is otherwise insufficient to cover the property's value. The lender or servicer purchases force-placed insurance to protect its investment in the property, as they have a financial interest in the property being properly insured.

If a property owner fails to maintain adequate insurance coverage, the lender or servicer may purchase force-placed insurance and add the cost to the borrower's loan payment. This can result in a significant increase in the borrower's monthly payment, as force-placed insurance is generally more expensive than standard insurance.

It is important to note that force-placed insurance does not provide any coverage for the property owner. It only covers the lender's financial interest in the property. Therefore, it is in the borrower's best interest to maintain adequate insurance coverage on their property to avoid the need for force-placed insurance.

In summary, force-placed insurance is a policy that a lender or mortgage servicer purchases to protect their financial interest in a property when the property owner's insurance policy is insufficient or lapsed. Borrowers should maintain adequate insurance coverage on their property to avoid the need for force-placed insurance, as it can result in increased monthly payments and does not provide any coverage for the property owner. #QuieTrack #Insurancetracking #lenderplaced #forceplaced #insurance