Insurers Could Drop Fire Coverage in California

California wildfires continue to scorch the Golden State’s southern cities, and now officials in the state fear that some insurers will drop homeowners’ coverage.

Wildfires in Southern California and earlier this fall in northern California have resulted in billions of dollars in claims. In the Sierra Nevada foothills, many homes were dropped after wildfires swept through in recent years, and some northern California homes also have seen their coverage dropped, California Insurance Commissioner Dave Jones told Reuters.

“We may see more of it,” Jones cautions.   Wow, don’t most insurance companies cover more than just California?

PS: Insurers are required to renew fire victims’ policies once. After that, homeowners could then be forced to go to specialty insurers, known as “surplus line carriers.”  Those policies can sometimes cost up to 40 percent more!

Source: “As California Fires Blaze, Homeowners Fear Losing Insurance,” Reuters/CNBC (Dec. 18, 2017)

Report raises questions over “Racial Lending Disparities?”

Seven consumer advocacy groups say their analysis of mortgage data raises questions about whether lenders are steering minority borrowers into government-backed loans that are slightly more expensive than conventional mortgages.

The report looked at data disclosed by banks under the 2010 Home Mortgage Disclosure Act. “The findings indicate persistent mortgage redlining and raise serious concerns about illegal and discriminatory loan steering,” according to a recent report.

The majority of government-backed loans are issued by the Federal Housing Administration, allowing borrowers to make down payments of 3.5% and remains virtually the sole source of low down-payment mortgages for homeowners today.

FHA loans require borrowers to pay mortgage insurance premiums no matter how much equity they have. Conventional loans, meanwhile, typically require mortgage insurance when borrowers have less than 20% in equity. Insurance premiums vary depending on the borrowers’ credit score and other risk factors.

“It’s not that the [FHA loan] isn’t a good product,” said Spencer Cowan, vice president at the Woodstock Institute, a Chicago-based research organization. The problem, he said, is that “to the extent that a borrower who could qualify for conventional financing is instead offered an FHA product, that person is being disadvantaged.”

More information at source: http://blogs.wsj.com/developments/2012/07/19/report-raises-questions-over-racial-lending-disparities/