If you have a mortgage and you let your homeowner’s insurance lapse, or the bank servicing your loan (“the servicer”) lets it lapse, that very same bank can legally order new insurance called “force-placed insurance” for you. And surprise. It’s not cheap. Just ask Hilda Sultan, of Florida, who was billed $33,000. (see video below)
As a mortgage loan originator for almost a decade, I have never dealt with this in my practice until it happened to one of my past clients. I tried to research the subject objectively, but the further I got, the more examples I found of this inherently abhorrent scam.
Are you getting that itch to buy a home? Or maybe you are in the other camp, and can’t even think of buying until the market truly changes course, and homes start to appreciate. Maybe you are one of many Californians who don’t have a job and buying a home is not an option for you. Thankfully, the long-standing myth that it is better to own than rent has been finally silenced. Just like the horror stories of the great depression told by our grandparents, we too need to share our experience of the currentgreat recession to future homebuyers. We need to remind them that buying a home is based on careful research, hard numbers, and not the buying frenzy mind-set that blinded so many leading up to the crash.
We have been lulled into a false sense of comfort with rates being so low, and now that they are starting to rise, we pretend it’s not happening and look the other way. I can’t tell you how many clients have asked, “when are rates going back down?” I have one client who insists the 30 year fixed rate will soon go to 4% at which time he is going to refinance his current 6% mortgage. We have a good relationship. I tell him he’s nuts and should have refinanced a year ago, but he is adamant – rates will go down. The mantra, the customer is always right echos in my head, but this time it’s just noise. It’s OK to take your chips off the table and to say I’m done gambling. Continue reading →