... INCLUDING LENDER FORCE-PLACED INSURANCE PRACTICES.
Auto loans are in a category of consumer borrowing that has exploded for two straight months. When taken together, auto loans and student loans rose $14.4 Billion in November and rose again by another $9 Billion in December, 2014. Although total consumer debt increased by 6.9% in 2014, the category including auto loans and student loans rose more during the past year, by 8.2%. These figures reported by the Federal Reserve Board as of Friday, February 6, 2015.
All lenders extend credit to consumers by taking back insurance paid for by the consumer which protects the collateral. This collateral protection insurance clothes lenders with the contract right to force insurance on the borrower-consumer to protect the loan collateral whenever the borrower fails to obtain or maintain it. The practices associated with lender force-placed insurance in residential mortgage loan transactions are finding their way into all other types of consumer loans -- if in fact these practices were not already there. See also Ann Carrns, "Subprime Borrowers Often Lured by High-Fee Credit Cards" (New York Times Nat'l ed., Saturday, February 7, 2015).
The author is at work on a book on "Lender Force-Placed Insurance" which is scheduled for publication in Spring, 2015 by the American Bar Association.
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