Report: Forced-Place Insurance Pushing Homeowners Into Foreclosure

If you've got a mortgage on your home, it needs to be insured. So if you stop paying that insurance premium, the bank will often go out and get insurance for you. Problem is, according to Bloomberg News, those policies cover less, cost more and will likely just end up putting you into foreclosure anyway. Bloomberg takes a look at these policies and finds that the loss ratio on forced-place polices (i.e., what percentage of premiums is paid out on claims) is much lower than expected. Rather than paying out $.55 on the dollar, these policies are only paying out twenty cents, suggesting that insurance companies are charging sky-high premiums. And yet, when the policies do pay out, they often only cover the bank's losses. So that means you can repair your fire-damaged home, but all the stuff you lost in the fire will likely not be replaced. Complicating matters even further, Bloomberg reports that the banks -- which receive commissions on these policies -- often make even more money by reinsuring them. So the bank both takes out a policy to protect the property but is at the same time betting on that policy never paying out. Fannie Mae has issued a directive to mortgage servicers with Fannie-backed loans telling them to bring down the cost of insurance premiums. But the Bloomberg editors believe more can be done to keep this problem in check. First, Freddie Mac needs to also demand that its related servicers get competitive bids on insurance policies. The Consumer Financial Protection Bureau is looking into the matter of forced-place insurance and Bloomberg believes that the CFPB should require servicers, whenever possible, to pick up the homeowner's lapsed policy. When that's not a possibility, then the servicer should be required to get bids for lower-cost options. Also, the Bureau needs to investigate the commissions made by banks on these insurance policies, as they are only an incentive to put already-struggling homeowners into policies they can definitely not afford. From the Bloomberg editors: Many homeowners who experience coverage gaps have severe financial problems that lead them to stop paying their insurance bills. They are already at great risk of foreclosure. Banks and insurers shouldn't be allowed to add to the likelihood of default by artificially inflating the cost of insurance. It's really in the best interest of troubled homeowners to continue to pay the policy they have -- or see if they can find a lower-cost one elsewhere, lest they be saddled with forced-place insurance that will just drag them deeper into the hole. Look Who's Pushing Homeowners Off the Foreclosure Cliff [Bloomberg]

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American Airlines Regrets That Whole Lifetime First Class Pass Thing

Back in the day, American Airlines thought it was a pretty good idea to sell unlimited first-class travel for a lifetime. For a few hundred thousand dollars, travelers could hop on a jet any time, and for an additional fee, so could a companion of their choice. Turns out that costs American a lot of money, and they're trying to shut the whole thing down as a result. The L.A. Times details the very interesting personal stories of a few men who bought tickets that enabled them to go anywhere in the world, basically anytime they wanted to, with the greatest of ease. Some flew for fun, some for business, and some even handed out upgrades to strangers using their companion passes. Each paid more than $350,000 for those privileges. One man has logged almost 40 million miles, another, 30 million. There are 64 other unlimited AAirpass holders, and all together, they've racked up way more miles than American would like. Financial struggles at the company led to it investigating some of its AAirpass holders. A special" revenue integrity unit" was assigned to see if any pass holders had broken the rules of the program. These customers used to enjoy special treatment due to the AAirpass, and then they were investigated. "We thought originally it would be something that firms would buy for top employees," said Bob Crandall, American's chairman and chief executive from 1985 to 1998. "It soon became apparent that the public was smarter than we were." In September 2007, American assigned an employee to root out any AAirpass holders who were violating rules. She calculated that some of those passengers were costing American $1 million a year. After investigating certain AAirpass holders, American revoked their lifetime passes, citing fraudulent behavior. Some fliers were sued by American, and often, they sued back. American spokeswoman Mary Sanderson said the canceled passes are "very isolated and represent an extremely small percentage of our overall AAirpass accounts." "We actively analyze all of our ticketing and program policies for any improper activity," she said. "If we determine that any activity has violated our policies or is fraudulent in nature, we take the actions we deem appropriate." For the entire, somewhat fascinating tale, check out the source link below. *Thanks to Alex and Thom for the tips! The frequent fliers who flew too much [L.A. Times]

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A New iPhone Will Cost You More than Ever Before

It's always exciting when someone stands up to a bully—unless that results in jacking up of the price of the hottest phone even higher than it already is. That is very unexciting, actually. In fact, it sucks. And that is exactly what's happening in this subsidy war between Apple and its wireless carriers, as these companies stand up to Apple's subsidies, which it turns out, is good for them, but bad for you. Using its ample leverage, Apple has forced Verizon, AT&T, and Sprint into subsidizing the iPhone at around $400 per phone. Apple sells its device to wireless carriers for $600, of which carriers subsidize $400 to bring the price tag of the phone to a more accessible, less-scary $200-$400 range, depending on the device. Sick of writing that $400 check for each phone, these companies have started standing up to Apple, according to The Wall Street Journal's Anton Troianovski. This has investors all excited: "The carriers' latest signs of resistance are drawing applause from investors and analysts. They say the carriers could benefit more from the smartphone boom if they succeed in raising prices for service plans and slowing the rate at which customers buy new phones," Troianovski writes. But all that excitement comes from the potential to make more money off of you.  The overall idea, for carriers, is to entice users away from upgrading to the new iPhone, since each upgrade costs them money. Here are all the extra things you can expect to pay now, on behalf of the wireless company. Verizon charges a $30 upgrade fee; AT&T and Sprint have doubled their upgrade fees to $36 over the last few months Monthly data plans have also gone up, with AT&T charging $5 more per month for some data plans and Sprint raising data by $10/month last year.  In Europe, Vodafone and Telefonica have stopped subsidies for new customers, charging $800 for a new device.  Tallied, that means instead of a $200 iPhone 4S with a $55-$170/month data plan, depending on amount and carrier, users can look forward to a $230-$236 device plus more expensive data plans. And, if Vodafone and Telefonica have any success putting that very expensive burden on the customer, we bet our stateside carriers will notice and follow suit. Like we said, all of this is to discourage people from upgrading their devices. Wireless carriers want to stop shelling out those subsidy checks to Apple and start making money off of data, voice, and text plans. But iPhone fans like their new phones. As we saw with the 4S, which saw bonanza sales-- despite being pretty similar to its predecessor -- the masses want it. We can expect that same lust when Apple comes out with the 5, which the rumormongers say will look very different than the 4 series. The real question is, how much will wireless providers subsidize it?

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Could You Go Offline for a Year? [Reader Poll]

The internet has become such an integral part of our lives, but is that necessarily a good thing? What would your life be like if you couldn't use it anymore? Paul Miller of the Verge decided to find out by signing off for one year. Could you do the same? More »

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Clever Shopping Bag Only Puts a Smile on Kids' Faces When It's Full [Video]

As if kids needed another tool in their arsenal of getting what they want at a toy store, a French chain created this incredibly clever shopping bag featuring kids' faces that go from frowns to smiles when the bag is filled. More »

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Airplane Seats Aren't Safe Enough for Fatter Americans

Decades-old safety standards mandate that airplanes seats be designed to accommodate an average passenger weight of 170 pounds — about 25 pounds lighter than the people who are actually sitting in them. According to the Centers for Disease Control, the average weight of an American man is 194 pounds and average woman in 165. Yet, as The New York Times reports today, airplane seats have been remained essentially unchanged in size and strength for decades, leading some engineers to question whether they can actually protect a large passenger in the event of a crash. The airlines themselves already assume that people riding in their airplanes are much heavier than the 170 pound standard, at least when it comes to calculating the weight of a full craft. Yet, those heavier passengers haven't gotten any extra protection if something actually goes wrong. With no new designs or safety laws on the horizon, we suppose the solution is lose weight or start taking the train. Photo by Kevin Dooley via Flickr

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Facebook Like Can Get You Fired, Says Judge

Your First Amendment rights are probably the last thing you think about when you click the Like button on Facebook. But just in case you were wondering, that innocent little blue thumbs-up logo is not constitutionally protected free speech. At least, not according to a district court judge in Virginia, who was the first to decide such a question in federal court. The case before Judge Raymond Jackson was this: a local sheriff had fired six of his employees, some because their actions “hindered the harmony and efficiency of the office,” according to the New York Times. One of those employees, it turned out, had clicked the Like button on the page of the sheriff’s political opponent. That may sound like a firing offense. But here’s the tricky part — not if the Like button counts as free speech. Public employees in Virginia are free to speak out on political matters, even if that means supporting the guy who wants to replace your boss. SEE ALSO: How Facebook Will Fix Its Like Button Problem So Jackson threaded the needle this way: He said the Like button isn’t the same as expressing yourself verbally. It’s not free speech, in other words. It’s just clicking a button. “Simply liking a Facebook page is insufficient,” the judge wrote. “It is not the kind of substantive statement that has previously warranted constitutional protection … For the Court to assume that the Plaintiffs made some specific statement without evidence of such statements is improper.” That had some legal analysts raising their eyebrows. “It is conveying a message to others,” UCLA law professor Eugene Volokh told the Times. “It may just involve just a mouse click, but a major point of that mouse click is to inform others that you like whatever that means.” The ruling is expected to be appealed, and it’s not outside the bounds of reason that the Supreme Court could soon consider the meaning of that little blue thumbs up. Do you think a Like is protected speech? Should you be fired for liking the wrong thing? Let us know your take in the comments. More About: Facebook, law, Politics, trending

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The Rise of the Mommy Blogger [INFOGRAPHIC]

The mommy blogger has been around for several years now, but did you know the army of chatty, tech-savvy mothers was this large — and monied? 14% of all American mothers with at least one child in their household blog about parenting or turn to blogs for advice, according to a recent study by Scarborough Research. About 3.9 million moms in the United States identify as bloggers, but just 500 of them are considered to be influential among among other mothers. The average mommy blogger is 37 years old and 89% of mommy bloggers have kids between the ages of 2 and 11. They’re also socially conscious and are 85% more likely to have supported a politician based on an environmental issue, 88% more likely to buy eco-friendly products and 38% more likely to volunteer than the average mom. SEE ALSO: Is Too Much Tech Bad for the Modern Teenager? [INFOGRAPHIC] Whether by dint of circumstance, hard work or both, mommy bloggers also belong to a pretty elite social set. The average mommy blog’s household income in $84,000 — $14,000 higher than average income for non-blogging moms. Moms who read or contribute to blogs are also 52% more likely to have college degrees than moms who don’t, according to Scarborough. The online tax service H&R Block commissioned the infographic below to create a snapshot of the mom blog world and show who some of the field’s most successful writers are. Check it out below for the full picture. Do you follow any mommy blogs or blog about parenting yourself? Let us know in the comments. More About: blogging, infographics, trendingFor more Business coverage:Follow Mashable Business on TwitterBecome a Fan on FacebookSubscribe to the Business channelDownload our free apps for Android, Mac, iPhone and iPad

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This Huge Ship Just Sailed Around the World Powered by Nothing but Sunshine [Video]

Sailing 60,000 kilometers—more than 37,000 miles—is an impressive feat even aboard modern luxury yachts. It's downright astounding to do it without using a single drop of oil. More »

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Did Scientists Really Just Break the Speed of Light? [Science]

Today, you might read that scientists have developed a way to produce faster-than-light travel. But steady, there: we've been burnt once recently, so let's not let it happen again. Did scientists really manage to break the speed of light? More »

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The Real Reason Why This Year's iPad Is Bigger and Fatter [Ipad]

This year's iPad has a very pretty retina display, but it came at a cost: a massive battery that in turn makes for a thicker tablet. Apparently, though, the original plan was to use a newer display technology that would have made the screen thinner and the battery lighter. So what happened? More »

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Pentagon Quit The Avengers Because of Its 'Unreality' [Avengers]

The Pentagon halted its cooperation with Marvel Studios' blockbuster movie The Avengers because the Defense Department didn't think a movie about superheroes, Norse Gods and intergalactic invasions was sufficiently realistic in its treatment of military bureaucracy. More »

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Here's the (Tethered) iOS 5.1.1 Jailbreak [Jailbreak]

iOS 5.1.1 is out now. While it's mostly usability upgrades and bug fixes, you may as well upgrade if you can. As usual, the Redsn0w jailbreak tool is ready pretty much simultaneously, and Redmond Pie has a walkthrough for how to install it. More »

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15 Ways to Make Yourself a Better Computer User [Productivity]

You know what the slowest part of your computer is, the one that really holds you back? You. Our friends at Laptop Mag are here to teach you how to overclock yourself, including how much time you'll save—down to the second. More »

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There Is a Poisonous Alien Caterpillar Threatening to Invade the London Olympics. Seriously. [Bugs]

The Oak Processionary Moth is a nasty little beast. It's native to Europe, but didn't show up in the United Kingdom until 2006, when a few eggs hitched a ride on oak trees transplanted to London. Since then, it's been causing environmental chaos. Now it's threatening to seriously screw up the Summer Olympics. More »

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GE Figures Out How to Squeeze 100W of Light from a 27W LED Bulb [Lighting]

One drawback of LED lighting is that as the bulb's output wattage grows, so too does the chip cooling system. But GE's new Energy Smart bulb's ingenious cooling design packs a 100W of power at a quarter the energy requirements of a standard A19 incandescent. More »

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Tuna Scrape: The Pulverized Scrap Fish Paste Inside Your Spicy Tuna Roll [Gross]

Just when pescatarians thought they were safe, news come to us of tuna scrape, the pink slime of the sea. After a fish has been filleted, there is often salvageable meat still left on its skeleton. Scrape is the combined chopped mixture of scraps from filleted fish whose leftover meat is still good enough not to waste. More »

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Microsoft Can Detect Your Gestures Using Just Your Computer's Audio [Video]

Kinect has drawn a huge amount of interest, not just from gamers but computer scientists, engineers and artists. Now, it seems Microsoft is branching out, because one of its latest research projects offers gesture control powered by just a computer's speakers, microphone, and some inaudible sound. More »

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How Amazon Aims to Fill Your Wardrobe [Amazon]

Amazon has dabbled in selling clothes online for a while, with limited success. Now, it's pouring money into its fashion division—and it won't be happy until it's filled your wardrobe. More »

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Sunscreen Could Be Giving You Skin Cancer [Science]

If it's not one thing, it's another. While everybody knows that too much time in the sun massively increases the chances of developing skin cancer, new research suggests that a compound found in most sunscreens may also increase the chances of acquiring melanomas. More »

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