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Force-placed insurance is a necessary tool to protect homeowners, mortgage lenders, investors, and the broader economy. Subjecting force-placed flood insurance to greater federal requirements has the potential to subject lenders and their investors to a significant risk of loss, raising costs for all homeowners.MBA believes that State-level regulations already effectively address the issues highlighted by the proposed Merkley amendment and state insurance regulators have proven themselves very willing to address issues related to force-placed insurance. This is especially true for states that have experienced high rates of force-placed insurance, such as Florida, California, and New York. Additional duplicative federal requirements would only serve to complicate the process and limit the ability of state regulators to implement state-specific solutions. This concern is compounded by the fact that the amendment seeks to subject only one aspect of force-placed insurance to additional federal regulation, meaning that lenders, investors, and state regulators would be forced to implement differing sets of requirements for force-placed insurance in the same state.
While MBA commends the Senate for its efforts in considering flood insurance, we remain concerned that the duplicative oversight of force-placed flood insurance instituted by the Merkley amendment would subject mortgage lenders and homeowners to risk of loss and higher insurance costs.This morning, MBA sent a letter to Majority Leader Harry Reid and Minority Leader Mitch McConnell further explaining why the Merkley amendment would negatively impact the real estate finance industry. You can read MBA’s letter by clicking here; but we still need your help. We need you to reach out to your members of Congress NOW to weigh in and reinforce our industry’s position: adding the Merkley Amendment to the Homeowner Flood Insurance Affordability Act would encroach on the purview of state regulators by subjecting one type of force-placed insurance – flood insurance – to duplicative and unnecessary federal requirements which will hurt mortgage lender and homeowners.
To take action and contact your Senators, click HERE to go to the MAA homepage, and click the “TAKE ACTION” button. If you don’t have, or forgotten, your MAA username and password, click on “forgot password” to get started. Please call Annie Gawkowski at 202-557-2816 if you need assistance.
MAA is the premier grassroots lobbying organization of the real estate finance industry. The mission of the Mortgage Action Alliance is to further build a network of individuals dedicated to strengthening the industry’s voice and lobbying power in Washington, DC and state capitals.
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