Can a mortgage company take money intended for a monthly payment for forced place insurance?

UPDATED: Jun 8, 2009

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Can a mortgage company take money intended for a monthly payment for forced place insurance?

We just paid off a ten year mortgage. Aprox. 4 years ago, we got notices that we were behind in our payments. When I asked why, they told me that our payment was taken for forced place insurance. We never had insurance on this property and were not required at the time we took out the loan. We were never told we needed insurance or given an opportunity to get our own policy. Our money was just gone. They constantly threaten foreclosure. They continue to charge us late fees and monthly “insurance fees” despite the fact that we do now have our own policy. Is this legal? Please help.

Asked on June 8, 2009 under Real Estate Law, Pennsylvania


B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

You need to take the original loan documents, and the correspondence you've gotten from the mortgage company, to a lawyer in your area, who can give you reliable advice based on all of the facts of your case.  One place to find an attorney is our website,

It's not at all unusual for a mortgage lender to require property insurance, and for the loan documents to give the lender the right to buy the insurance itself and bill you for it, if you don't have it.  One thing you can do right now is send the mortgage company proof of your insurance, starting with a photocopy of the page that shows the policy number and the coverage amounts, which should at least stop the charges for continued premiums.

You've let this go for four years.  When you get nastygrams from your mortgage company, it's always best to get all the way to the bottom of the problem, as soon as you can.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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