While the FHFA is now considering a solution to lower force-placed insurance costs – a program they previously put off – mortgage servicers need to get ahead of this issue and consider new pricing approaches.
Vienna, VA (PRWEB) March 27, 2013
As a result of regulators’ recent focus on lender placed insurance, Pace Harmon, a leading outsourcing advisory firm, has released a report detailing strategies that mortgage servicers can employ to best position themselves in this new environment. Commissions and non value-added services are under intense scrutiny by Congress, federal and state regulators, and public interest groups, and mortgage servicers should proactively deal with high force-placed insurance premiums now to have better market leverage when their contracts renew.
"While the Federal Housing Finance Agency is now considering a solution to lower force-placed insurance costs for homeowners and taxpayers – a program they previously put off – mortgage servicers need to get ahead of this issue and consider new approaches for pricing and managing force-placed insurance,” said Marc Tanowitz, principal, Pace Harmon. “The end goal is making sure mortgage servicers and insurers are performing value-added services and that investors’ and borrowers’ interests are represented.”
To prepare for the new market dynamics and opportunities, Pace Harmon recommends that mortgage servicers assess their current contracts, benchmark their pricing, and analyze their claim and loss data. Armed with this data, mortgage servicers will be well positioned to stay ahead of the curve by considering alternative approaches to insurance tracking, participating in the bearing of insurance risk and leveraging market competition to reduce force-placed insurance premiums.
About Pace Harmon
Pace Harmon is an outsourcing advisory services firm providing guidance on complex outsourcing and strategic sourcing transactions, process optimization, and supplier program management. Founded in 2003 and headquartered in Tysons Corner, Va., Pace Harmon provides pragmatic and insightful advice that helps its client base of Fortune 500 and other large enterprises maximize the benefits achieved from their mission-critical supplier relationships. For more information, please visit paceharmon.com.