In what I’m sure is a big disappointment to some, the only lender to require borrowers to purchase sinkhole activity coverage, U.S. Bank, has just announced it will no longer do so.
Activists used the false threat of foreclosure as a tool to limit Citizens sinkhole rate increase. That’s done and over with but, the damage from it’s doing is not.
While this new announcement is good for consumers going forward, it’s apparent U.S. Bank still doesn’t get it, not really. In its rescission U.S. Bank says when an appraisal reveals “settlement deficiencies” it might trigger an inspection which could re-trigger the requirement.
Hmm…seems to me whatever triggers the inspection would be a pre-existing condition which would either not be covered, or would make sinkhole activity coverage unavailable or unaffordable. Which means U.S. Bank is continuing its irrational approach to this issue–and, for what it’s worth, reminding me of why I’m grateful to be free of any dealings with large national lending institutions.
Isolated, unresponsive and without a clear understanding of the coverage or the impact of its mandate, U.S. Bank gave wings to the movement reducing Citizens sinkhole rate increase from 400% to only 32% statewide. It, alone, gave Sean Shaw, Senator Fasano, Bill Newton, Ginny Stevans and others, the false, but none the less compelling argument, that mortgage holders must buy sinkhole activity coverage when, in fact, they do not and never did. Even U.S. Bank, for those who could get its attention, waived the requirement.
U.S. Bank is, therefore, not only responsible for thousands of people purchasing something they probably don’t need and, in sinkhole alley, can’t afford; it’s also responsible for the unfair subsidy that flows to those purchasers from millions who don’t want to pay…and shouldn’t have to.
Despite doing everything I could to get Sean Shaw to simply be honest about the potential for foreclosures, I failed. And, I suspect, words of acknowledgement, certainly of apology, will not be forthcoming; even with this latest revelation from U.S. Bank; and that’s too bad.
Keep in mind, anyone who looked into it knew U.S. Bank was errant. Even the secondary mortgage market didn’t require the purchase of sinkhole activity coverage. If it did, 80% of those insured in sinkhole alley with Citizens could not have gone without the coverage. The false advocates new this, but didn’t say anything. They were making millions off of sinkholes and all they really wanted was for struggling homeowners to struggle even harder to buy the coverage their firms profited from. What a shame!
SB-408 made it clear that proceeds from a sinkhole claim must be spent on repairs; repairs made in accordance with the recommendations of the insurers’ expert. That didn’t make any difference to the false prophets. Their silence caused more and more homeowners to spend thousands of dollars on an “optional” coverage that, in a best case, could only restore them to the position they were in prior to a loss.
I’ve said it before. If I was in sinkhole alley, I would not purchase sinkhole activity coverage.
And, regardless of where I lived, I certainly wouldn’t rely on the advice of law firms and politicians who can’t admit when they’re wrong!
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