That's good news for homeowners. I say that with personal knowledge because I am now dealing with the fact that a very expensive flood insurance policy was force-placed on my unit while I was deployed.
I'm not screaming and yelling, because there are *sort of* two sides to this -- I ignored some fine print, and I did not renew the policy that I took out the last time I went through this consumer nightmare (regardless of the fact that I don't live in a flood zone...or that I'm six stories up)! I think I sort of treated it like the problem that would go away if I just ignored it.
I will fight this, but only as much as time and energy allow. In the meantime, most of my tax refund is about to vanish into thin air.
Here's why I decided to post: If YOU are thinking about buying a home, or just bought a home (or heck, if you own ANY home with an outstanding mortgage held by a bank), take the time to FIND OUT if you might be on the hook for any hazard insurance that could theoretically be force-placed upon you.
Big companies like Wells Fargo are banking (literally) on the fact that a certain percentage of homeowners won't read all the fine print, won't carefully screen every piece of mail that comes from the company, and won't bark loud enough when the Big Squeeze comes.
Trust me when I say it: "Don't be that guy."
ADDENDUM: This excellent New York Times article explains the issues that homeowners face in these situations, including some cost-benefit analysis about fighting the bank. They even have a quote from a homeowner who thought that the issue was a dead one after he didn't hear from his bank when the policy lapsed...until he got the 'retroactive' news, with the concomitant steep bill.