Reducing Monthly Payments

Reducing Monthly Payments

Our mission is to be a partner to the homeowners we serve—whether they’re up to date on mortgage payments or experiencing financial hardship. We wanted to share an example of our team providing customer service that brings our mission to life.

A homeowner’s monthly payment can be made up of more than just principal and interest on their mortgage. When our team is working with a homeowner experiencing hardship, we look at the other costs associated with their payment—such as insurance or taxes.

Every mortgage requires homeowners to maintain property insurance. If the unthinkable happens—a fire, storm, earthquake or other catastrophe damages your home—property insurance will cover the damage. This insurance protects both your and your lender’s financial interest in your home. You can think of your home as an asset that both you and your mortgage lender are invested in—so in the event that your home is severely damaged, the insurance protects everyone’s interest in the property.

Sometimes, homeowners do not get their own insurance and your lender or servicer will have to purchase insurance on your behalf, a process called force-placing insurance. This could be due to you not having adequate coverage, not showing proof of insurance to your servicer, or as a response to property damage.

Force-placed insurance isn’t ideal—the premium will likely be higher than if you had purchased it yourself. This option can be costly for homeowners, and our team has experienced firsthand how frustrating this situation is from the homeowner’s side when we received a call about this exact experience. The homeowner explained they couldn’t afford to keep making their monthly payments, but also weren’t eligible for Mortgage Assistance options.

It turns out that the homeowner had recently experienced property damage, and had force-placed insurance. Alongside their monthly mortgage payments, keeping up with the insurance payments was simply unfeasible. In short, their insurance was so high because they were overinsured. While not common, this can be due to a few reasons:

  • The insurance process can be confusing to navigate.
  • Homeowners may not realize the amount of their payment or be aware they can shop for a better rate.
  • Homeowners are not aware of state-level Fair Plan insurance policies are available to help individuals who are having trouble insuring their property (due to the fact that insurers consider them high risk).

Since this particular homeowner had force-placed insurance, our team decided to find a better option. We also began an investigation on why the homeowner was overinsured in the first place. Here’s what we found:

  • The homeowner previously had insurance, but the prior policy wasn’t active.
  • They were having trouble making payments and didn’t realize their payment was increasing due to the forced-place insurance.
  • They weren’t aware of a state-level Fair Plan option.

Our job is to provide best-in-class service to our homeowners. We take pride in going above and beyond to help solve their financial problems. In the end, our team got the homeowner a much better insurance policy and a refund on the excess premiums paid, reducing their monthly payment by almost 40%. If you have a question about your monthly payment, or would like support with force-placed insurance, don’t hesitate to reach out to our team. We’re only a call away!