Regulatory Alerts2017-09-14
Sale and Financing of Single Premium Credit-Related Insurance
The Office of Financial Institutions clarifies expectations under Act 237 by prohibiting the financing of certain single premium credit-related insurance premiums within residential mortgage loan amounts. This regulatory change targets abusive practices where financed insurance terms significantly exceed the underlying loan duration, ensuring continued examination focus on purchase and refinance transactions under both the RMLA and LCCL. Lenders are encouraged to assess portfolio risks and implement mitigation strategies while the agency collaborates with industry stakeholders to refine future legislative language.
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