Anonymous Emails Accuse BofA With Forced-Place Insurance Scam
I have not been able to get into the Anonymous leak of Bank of America emails so far, but as I understand it, the source of the emails doesn’t work for BofA but Balboa Insurance, which used to be owned by them. And his claim is that BofA operated a large forced-place insurance scandal.
Briefly, forced-place insurance is this: when a homeowner doesn’t pay for homeowner’s insurance for their mortgage, the loan servicer must step in to buy an insurance policy for the homeowner. This policy is supposed to be of comparable worth, but in this scheme, the servicer will purchase insurance for the homeowner that costs ten times as much or more, get a kickback from the insurance company for buying such an expensive policy, and then charge the investors or even the homeowner for the insurance. And the servicer usually reinsures the insurance, which means this expensive policy will never face a claim.
Business Insider describes the content of the emails:
The following codes pertain to the emails, so use as reference:
SOR = System of Record
Rembrandt/Tracksource = Insurance tracking systems
DTN = Document Tracking Number. A number assigned to all incoming/outgoing documents (letters, insurance documents, etc)
The first email asks for a group of GMAC DTN’s to have their “images removed from Tracksource/Rembrandt.” The relevant DTNs are included in the email — there’s between 50-100 of them.
In reply, a Balboa employee says that the DTN’s cannot be removed from the Rembrandt, but that the loan numbers can be removed so “the documents will not show as matched to those loans.” But she adds that she needs upper management approval before she moves forward, since it’s an unusual request.
Then it gets approved. And then, one of the Balboa employees voices their concern. He says,
“I’m just a little concerned about the impact this has on the department and the company. Why are we removing all record of this error? We have told Denise Cahen, and there is always going to be the paper trail when one of these sent documents come back. this to me seems to be a huge red flag for the auditors… when the auditor sees the erroneous letter but no SOR trail or scanned doc on the corrected letter… What am I missing? This just doesn’t seem right to me.”
One reason I am predisposed toward taking this at face value is I have been hearing widespread complaints from readers about forced place insurance. And the industry experts I consulted with thought BofA was a likely candidate since it already owned a large insurer. The narrative from BankofAmericaSucks is a bit wobbly on the roles of some of the parties […]
And if these allegations are indeed accurate, they make a mockery of the settlement charade underway among 50 state attorneys general, Federal regulators, and what amount to banking industry crooks, aka servicers.
The writing style of the author (some typos, not that yours truly is one to make much of that sort of thing) and the errors regarding the roles of key parties will lead to questions regarding validity. But as indicated, previous abuses in this area, the past behavior of underwater servicers, and the complaints I have been hearing make this all too credible.
Just because something has a lot of anecdotal evidence behind it doesn’t necessarily mean the specific case is true. But the forced-place insurance scam has been part of other servicer lawsuits, so it definitely exists. Whether this set of emails shows that taking place is another matter. Apparently this is just the first Anonymous email dump, so there should be more on the way.