The Unethical Practices of Force-Placed Insurance: How to Protect and Indemnify the Forgotten Investors of Mortgage-Backed Securities

Authors

Devin Moore

First Page

199

Document Type

Comment

Abstract

In the United States, the media has been attempting to inform homeowners of an abusive insurance policy: force-placed insurance. Force-placed insurance is a type of policy that only protects the interest of the mortgage lender or mortgage servicer, and not the homeowner. While federal and state governments have restricted force-placed insurance policies for homeowners, the laws do not protect investors of mortgage-backed securities with force-placed insurance policies. These investors have an extensive impact on the general population since their investments are funded by retirement savings plans. As a result, the investors could lose the retirement savings of millions without proper protection. To protect investors and the general public, the government must hold the mortgage servicers and force-placed insurance companies accountable through criminal prosecution and strict antitrust scrutiny. Part II of this Comment covers the history of force-placed insurance, Part III analyzes the harmful effects and legal issues present in the force-placed insurance market, Part IV proposes a solution that will create accountability for mortgage servicers and force-placed insurers, and Part V concludes with why justice must be served on behalf of the investors of mortgage-backed securities effected by force-placed insurance.

Recommended Citation

Devin Moore, The Unethical Practices of Force-Placed Insurance: How to Protect and Indemnify the Forgotten Investors of Mortgage-Backed Securities, 37 St. Thomas L. Rev. 199 (2025).
Available at: https://scholarship.stu.edu/stlr/vol37/iss2/4