Claims And Issues

NEXT WEEK IS MARCH MORTGAGE MADNESS!

    Mortgage March Madness will be here next week!

    Every article published here next week will take a look at some of the many pressing insurance issues presented by our residential mortgages and Lender Force-Placed Insurance.

    Mortgage March Madness is coming!  Don't be left off the Court!  See you here, next week.

© 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

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MORTGAGE MARCH MADNESS!

    Mortgage March Madness is Coming!

    Next week every article published on this Insurance Claims and Issues Blog will focus exclusively on the latest developments in Lender Force-Placed Insurance issues and residential mortgages.

    Mortgage March Madness is coming next week!

© 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

 Please Read The Disclaimer.

Related articles

Community banks bailing on mortgage lending

 

HELP WANTED: MUST HAVE EXPERIENCE PRACTICING INSURANCE, SETTLING CLAIMS.

Interested parties please apply to the United States Department of Justice.

          Investment banks are increasingly assigning contracts for mortgage servicing to "specialty" servicers, which are businesses which exist for the purpose of servicing mortgages.  In basic and simple terms, a mortgage servicer is a party which stands between the mortgagor-borrower and the mortgagee-lender.

          Borrowers have a lot more contact with the current servicer of their mortgage than they will ever have with the lender or the lender's current stand-in.  The servicer collects the monthly mortgage payments, applies proceeds from escrow toward taxes and insurance, force-places insurance at the borrower's expense and on the lender's behalf, and initiates foreclosure against the borrower on behalf of the lender.

          The spark that set off the so-called National Mortgage Settlement, was certain attention-getting conduct of the 5 investment banks which were released.  The conduct which drew national attention originally was how the 5 investment banks conducted themselves in their roles as mortgage servicers.

           In 2012, an election year, the idea of a national settlement agreement was pushed hard by the United States represented by the Department of Justice and HUD.  See, for example, the articles posted here on January 25, 2012, and the four-part series which concluded on February 2, 2012 on Insurance Claims and Bad Faith Law Blog with  links to the other articles in the series.

          The Department of Justice and HUD pushed an agreement to settle and release potential claims including claims involving lender force-placed insurance, which the Federal Government held against the 5 mortgage servicers.  (The settlement agreement eventually expanded to also include mortgage lending activities by the 5 investment banks.  See the article posted on Insurance Claims and Bad Faith Law Blog on July 26, 2012, for example, in addition to the articles linked above.)  The U.S. Attorney General and the Secretary of Housing and Urban Development pressured many States to join in settling and releasing potential claims held by the States.

          The DOJ, HUD, and the States all were represented by legal counsel in this effort.

          They may have forgotten to require that the settlement agreement should be binding on the released mortgage servicers' successors and assigns.

           The investment banks are selling their mortgage servicing contracts in greater numbers to specialty servicers, as noted above.  The specialty servicers are reportedly now doing the same allegedly bad things that drove the investment banks into the so-called National Mortgage Settlement.  The specialty servicers are not inhibited let alone restrained by that settlement, to which they were not parties and in which they were apparently never foreseen.  See Jessica Silver-Greenberg and Michael Corkery, "Loan Complaints by Homeowners Rise Once More / Old Abuses, New Front / Taking Over For Banks, Mortgage Servicers Sidestep Rules" p. A1, col. 6 (New York Times Nat'l ed., Wednesday, February 19, 2014).

          The reports have it that the successors or assignees to these mortgage servicing contracts are repeating the same alleged abuses as were supposedly settled by the investment banks, "because" the banks are regulated and the specialty servicers are not.  The reporters have it wrong.

          Specialty mortgage servicers are engaging in allegedly bad behaviors, including force-placing insurance abuses on behalf of lenders, simply and completely because they do not see themselves as bound by any agreements the investment banks made with the United States or the States which participated in the "National Mortgage Settlement".

 © 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

 Please Read The Disclaimer.

MORTGAGE MADNESS COMING IN MARCH!

    Mortgage Madness Coming in March!

    Insurance Claims and Issues Blog will present a series of articles on one and only one subject the first week in March.  Next week every article published here will be devoted exclusively to Lender Force-Placed Insurance issues in residential mortgage situations.

    Be sure not to miss the Mortgage Madness news on Lender Force-Placed Insurance issues!

© 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

 Please Read The Disclaimer.

 

DID MORTGAGE SERVICERS AGREE NOT TO REPEAT PREVIOUS INSURANCE TACTICS?

          "Specialty" mortgage servicers are businesses whose business purpose is to make their money by servicing mortgages. Specialty mortgage servicers are now reportedly engaging in the same allegedly unfair mortgage servicing practices which investment banks settled.  See Jessica Silver-Greenberg and Michael Corkery, "Loan Complaints by Homeowners Rise Once More / Old Abuses, New Front / Taking Over For Banks, Mortgage Servicers Sidestep Rules" p. A1, col. 6 (New York Times Nat'l ed., Wednesday, February 19, 2014).

          Investment banks have settled potential claims over their mortgage servicing activities in the so-called National Mortgage Settlement, and they have settled actual claims in suit in individual litigated cases over their allegedly unfair mortgage servicing practices including lender force-placed insurance.

          Did they agree not to do it again by other means?

          Did they agree to bind the parties to which they sold their contracts for mortgage servicing?

          Putting it another way, did the investment banks agree, when they settled their mortgage servicing practices, that their agreement would be binding on specialty mortgage servicers to which they sold their servicing contracts?

 

          This is a very important issue especially for future mortgage servicing activities involving lender force-placed insurance.  More to come on this subject.

 © 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

 Please Read The Disclaimer.

SANDY MONEY IN NEW JERSEY.

          There were a lot of news reports published on January 13th of this year about the uses to which Federal Sandy relief money is being put in New Jersey.  Federal investigations topped the headlines then.  In the weeks since, the seemingly never-ending parallel story surrounding the lane closures in September on the George Washington Bridge has mostly driven the story of Sandy money out of the public view.

          Things have been developing in the story of Sandy money use in New Jersey, even when most people are looking at other things.  For some reason, the governor's administration in New Jersey chose the next-to-last Wednesday in January, or January 22 to be precise, that they had terminated a Sandy relief contract in December.

          The Sandy contract was with a TPA or third-party administrator apparently to coordinate Sandy relief, or at least to manage the disbursement of Federal relief funds to Sandy victims in New Jersey.   The New Jersey administration awarded the contract to a politically connected company, Hammerman & Gainer, with 7 locations:  4 in Louisiana, 2 in Texas, 1 in Washington, D.C., and None in New Jersey.  At first glance, you might notice as I did that the two States where this company does have  locations have Republican governors, like New Jersey does.  The D.C. location has its own implications.

          However, the company displays its qualifications on its website and it lists some experience following Hurricanes Katrina and Rita as a catastrophic risk manager "managing" claims and inspections.  Further, it says that it "disbursed over $7 billion".  Here is a link to the company's website so that you can see for yourself:   Hammerman & Gainer website self-description.

          The company's Sandy relief contract in New Jersey was reportedly to oversee the distribution of Sandy relief funds of $600 Million.  The contract was reportedly for 3 years when New Jersey signed it, at a cost of $68 Million or some 11% of the Sandy relief money apparently available to New Jersey from Federal Taxpayers.  Bloomberg News, "Pols Call For Probe as Christie Ends Contracts," posted on Crain's New York Business on January 30, 2014.

          As you can see for yourself, this report was published on January 30th.  Nothing else has been reported since January 13th on the issue of how Sandy relief funds are being used in New Jersey.

          Time for some Sandy relief questions.

          Why did the New Jersey administration enter into this contract with this company in the first place?  Was the contract bid, or was it one of those infamous no-bid contracts which are awarded to favored parties?

          Why did the New Jersey administration choose the last Wednesday in January, 2014 to announce that a month before, it had terminated the contract?

          Is there a new contract that took the place of this contract?

          Who if anyone has been overseeing the distribution of Sandy relief funds from the Federal Taxpayers ever since this company's risk management/TPA contract to perform those services was terminated?

          Where is the Sandy relief money?

 © 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

 Please Read The Disclaimer.

Is There Enough D&O and EPLI For The Whole Football League?

   There is a question whether there is enough Directors and Officers Coverage and Employer's Liability Insurance for professional sports, starting with the football league.  It is pretty clear from the evidence in a report which the owners themselves paid for, that they are going to face claims that they are running some of the most hostile work environments in the world.  See Ben Shpigel, "'A Classic Case' of Bullying Seen in an N.F.L. Team / Miami Abuse Detailed / Report Says Crude Acts Included Racial Slurs and Homophobia," p. A1, col. 1  (New York Times Nat'l ed., Saturday, February 15, 2014).

   So, what made some people think that when the kind of people who are good at nothing else in their lives but playing football get older, that for some reason they necessarily morph into good people if they aren't already a good person to be around?  Or role models?  Or mature adults?  I guess that may be an issue for owners and the coaches they employ.  It certainly seems to be an issue already for sponsors of these professional leagues.  See Juliet Macur, "Sports of the Times / N.F.L. Sponsors Need to Act" p. B9, col. 3 (New York Times Nat'l ed., "SportsSaturday" Section, Saturday, February 15, 2014).  Sponsors who pay money to advertise these groups of people have the pleasant option of conditioning payment on compliance with certain minimum levels of acceptable behavior.

    If the sponsors do not require compliance, others may say that the sponsors are complicit, now that they have to know what they are sponsoring.  Continuing to sponsor the same repulsive behavior without requiring change just may not be acceptable now, either.

© 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

Please Read The Disclaimer.

Computer Models, Catastrophe Predictions, Premiums, and Claims.

    Continuing the trend toward Federal involvement in Insurance issues, the Government Accountability Office ("GAO") was asked by several U.S. Senate and U.S. House Members to prepare a report on what would be involved for private insurance companies to take on the additional risks of Flood Insurance.  (Private insurance companies avoid Flood risks; actually, private insurance companies refuse to cover them.  That is why the National Flood Insurance Program was enacted.)

    The GAO reported back that private insurance companies still do not want to wade into Floods, so to speak.  In general, if private insurance companies were going to take on risks in addition to those which they already cover, then private insurance companies would of course have to evaluate those risks, the GAO reported.  Here is the GAO report:  "Flood Insurance / Strategies for Increasing Private Sector Involvement" (released under date of January, 2014).

   At the same time as the GAO released the report, private insurance companies announced that they are establishing their own computer modeling platforms for evaluating catastrophic risks including Hurricanes and other 'weather events' which cause catastrophic damage including from floods.  Charles E. Boyle, "21 Insurers, Brokers Launch Oasis 'Open Source' Cat Model," posted online in "Carrier Managment", January 29, 2014.  Parenthetically, "Carrier Management" is a relatively new newsletter which apparently belongs to the same publishing group as the more widely known "Insurance Journal" and "Claims Journal" publications. 

© 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

Please Read The Disclaimer.

HOSPITALS SELL PATIENTS HEALTH CARE PRODUCT. COST CONQUERS ALL.

And they sell their product to our Health Insurance Companies, too, of course.

 

“We want to be providing a more coordinated product that delivers health care at a lower overall cost to the community we serve,” *** ****, general counsel at St. Luke’s, told me.

Quoted by Eduardo Porter, "Economic Scene / Health Law Goals Face Antitrust Hurdles" p. B1, col. 1 (New York Times Nat'l ed., "Business Day" Section, Wednesday, February 5, 2014).

 

The moment caring for our health became a product and stopped being a profession, the terrorists won.

 

© 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

Please Read The Disclaimer.

CANUTE STOPS THE TIDE AGAIN. For the first time. A POSTSCRIPT.

This is a postscript to an article posted here on January 22, 2014, "CANUTE STOPS THE TIDE AGAIN.  For the first time."

   THE UNRAVELING OF PUBLIC POLICY ON FLOOD INSURANCE, or, FOUR DAYS IN JANUARY.

JANUARY 28-30, 2014:

   The U.S. Congress is poised to repeal the policy reforms that would have made it more expensive for buyers to purchase Flood Insurance coverage for properties in Flood Zones, and less expensive for Federal Taxpayers by reducing subsidies of Flood Insurance in Flood Zones.

  To put it another way, Congress is ready to restore the Federal Taxpayer subsidy in the National Flood Insurance Program for buyers who choose to buy properties located in Flood Zones, and who need Flood Insurance to buy properties there  -- and who will continue to buy their Flood Insurance for properties in Flood Zones using subsidies provided by Congress from the Federal Taxpayers.  See, e.g., Coral Davenport, "Popular Flood Insurance Law is Target of Both Political Parties" (New York Times Online, posted January 28, 2014).

JANUARY 31, 2014:

   The Senate passed the Flood Insurance Premium bill of delay on January 30, 2014 by a vote of 67 to 32.  The bill now goes to the House of Representatives.  "National Briefing," "WASHINGTON Flood Insurance Bill Moves to House," by Coral Davenport, p. A17, col. 5 (New York Times Nat'l ed., Friday, January 31, 2014).

   By the time this article is posted, the House too may have voted for the bill of delay.  Or the House may have delayed voting on the bill, no-one can tell.  Whatever happens, this blog will be here to post the news.

   Is the House in Session before February 5th?

 

Please Read The Disclaimer.

 © 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

 

HOW LONG CAN WE AFFORD THIS?

   "High tides have been getting higher and low tides lower at cities around the Gulf of Mexico, according to a new study produced in part by scientists at the University of South Florida."  Craig Pittman, "Study:  Higher Tides From Climate Change Likely to Make Hurricane Flooding Worse" (Tampa Bay Times Online, Wednesday, January 22, 2014).

   The article you are reading is not about climate change.  That is covered by the article in the newspaper linked above. 

   Instead this article covers the payment of studies about climate change.  The University of South Florida's study of higher and lower tides at Gulf Coast cities is featured in the above article.  The University of South Florida is located in Tampa.  Tampa is a city on the Gulf Coast.  It stands to reason that researchers at the University of South Florida are capable of providing measurements and results from tests on Gulf Coast tides, that researchers located elsewhere cannot match as easily, if at all, simply by USF's location at the Gulf Coast.

   Hurricanes are still being examined at Colorado State University in the Rocky Mountains, however.  The CSU researchers are operating with Federal Taxpayer dollars first awarded in the George W. Bush administration.  (Whether Federal Taxpayer dollars were awarded to CSU before or after Hurricane Katrina is not presently known.)  The Rocky Mountain Gang has predicted the number of hurricanes and named storms every year since, and most every since, they have been wrong.  Further, the United States Taxpayers already pay for a National Hurricane Center located in Florida.  And the National Climatic Data Center located in North Carolina.  These facts have previously been reported under the categories of "Hurricanes" and "Catastrophe Claims," and most recently in this article posted on January 19, 2014 on Insurance Claims and Bad Faith Law Blog.

   How long can we afford to funnel Federal Taxpayer dollars to pay for failed results?  At a time when officials argue that unemployed people should take low-paying jobs which provide no benefits so that favored entrepeneurs can sell products, how long can we afford to use Federal Taxpayer money for these results?  How long can we afford it?

Please Read The Disclaimer.

 © 2014 by Dennis J. Wall.  All rights reserved.  No claim to original U.S. Government works.

 

Related articles

USF: Sharp swings detected in Gulf tides

Tracking Climate Change: Md. Residents Snap Pictures Of High Tides