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Consumer Advocacy Group Questions USAA's Role in Home Foreclosures
Consumer advocacy group The Greenlining Institute has filed a petition with the Commissioner of the California Department of Insurance demanding review of United Services Automobile Association's (USAA) application for a 6.9 percent rate increase on the company's homeowner multi-peril insurance product line.
The group said it is concerned that USAA, which also offers mortgages through its banking operations, may be contributing to the nation's home foreclosure crisis. Greenlining contends that USAA is unwilling to share how many foreclosures originated from USAA mortgages. Samuel S. Kang, the group's legal counsel, said USAA's reluctance to share their data may result in more military families losing their homes.
"The Department of Veterans Affairs has been flooded with calls from our service men and women whose homes are being foreclosed. Tens of thousands of military families may have already lost their homes," he said.
Greenlining is requesting a hearing from California Insurance Commissioner Steve Poizner to examine USAA's proposed rate increase in light of the insurer's reluctance to release its home mortgage data.
Kang suggested that USAA's culpability in the home foreclosure crisis may deserve the level of scrutiny of Countrywide Financial, the nation's biggest mortgage lender whose top executives were recently grilled by Congress. "Countrywide played a big part in the crisis, but they weren't the only ones," Kang said. "For the sake of our men and women in uniform, perhaps it's time for Congress to take a closer look at USAA."
Greenlining said its objection was based on a number of concerns stemming from USAA's treatment of its 5.9 million customers, all of whom are either members or family members of the United States armed forces.
Kang said that the home foreclosure crisis is compromising soldiers' lives. "Some of our troops in Iraq are actually forced to negotiate with their lenders while on the battlefield," he said. "As the leading financial services provider to American military families, I cannot believe USAA is allowing this to continue. The lives of our troops are on the line."
Source: Greenlining Institute
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