13 largest homeowners insurers denied nearly half of claims last year

Likely looking to offset the rising costs of climate change, the nation's 13 largest homeowners insurers denied 47.5% of their claims last year, compared with 37.4% for all reporting underwriters, a study from Weiss Ratings alleged. Several factors can lead to a claim being denied, including risks such as flood and windstorm not being covered under standard policies. But for Martin Weiss, founder of Weiss Ratings, there's more to the story. "Instead of maintaining adequate reserves to cover the likely potential damage from storms, floods and forest fires, many insurers distribute the funds to shareholders or move them to other subsidiaries," Weiss said. "Now, to make ends meet, these companies are closing about half of homeowner claims with no payment whatsoever."

READ MORE: 13 largest homeowners insurers denied nearly half of claims last year

FHFA redrafts rules for suspending mortgage companies

Reproposed rules for suspensions and related reporting in the government-related mortgage market are getting a close look from an industry that relies heavily on quasi-public entities to buy its loans. The Mortgage Bankers Association, which spoke out against an earlier version, showed initial relief that the Federal Housing Finance Agency toned down some of the harshest measures. The new draft strikes a previous plan for quick suspensions that would have omitted existing due process in some circumstances, and it requires infractions to meet a certain bar, MBA President and CEO Bob Broeksmit said.

Housing payments just hit a 2024 low

The median payment recorded on new mortgage applications fell to $2,057 in August, the lowest since December 2023, when it was $2,055, according to the Mortgage Bankers Association. The August number decreased 3.9% from $2,140 one month earlier and 5.2% from $2,170 a year ago. Data comes from the association's Purchase Applications Payment Index, which measures home buyer affordability based on various economic factors. August's PAPI reading came in at 160.7, also down 3.9% from July's score of 167.2. A lower reading indicates more affordability.

Newrez's acquired servicer sued for "pay to pay" fees

Specialized Loan Servicing, a mortgage servicer acquired by Newrez in May, allegedly upcharged borrowers for processing mortgage payments over the phone, a recent suit claims. Prior to being bought by Newrez, SLS required borrowers to pay $7.50 for processing mortgage payments made by phone, representing a significantly higher amount than what other servicers charge, litigation filed Sept. 24 in Texas federal court purports. The suit, lodged by borrower Eugenio Alvarez, says that most servicers have all together stopped charging for this service. 

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