Action 9 has uncovered an insurance nightmare that could strike any homeowner with a mortgage. A Clermont woman claims her lender was making her pay for hazard insurance she did not need --- at sky high rates. It appears to be happening more often. Action 9's Todd Ulrich reports it can be very controversial and costly.

(Todd) "You'll lose your house?" (Karen) "Without a doubt."

Karen Morton was frantic. Her mortgage company notified Karen the house was not insured----so it was buying a policy--- that cost 3 to 4 thousand dollars a year---and she had to pay for. It was a total shock.

"I've done everything i was supposed to do," said Karen.

Records show Karen had paid her mortgage, and the escrow to cover hazard insurance. But last month--her lender announced there was no coverage---so it was forcing her to pay for another policy----at rates that could force her into foreclosure.

"I won't be able to pay anything," said Karen.

It's called forced insurance...because a lender goes and and buys a policy in your name, and then charges whatever it wants.

Lenders have to protect their interests. But Action 9 found complaints to florida regulators have shot up---over lenders who failed to renew policies because of their mistakes ----then forced new insurance on consumers at drastically higher premiums.

"They're going to take the hit." Attorney Mark Nation says his firm has cases like that a couple times a month. He says the forced policies offer bare bones coverage at premium prices.

"It is there to protect the mortgage company, not the homeowners and rates are really sky high," said Mark.

Nation says his clients have won unfair trade lawsuits against the insurance companies.

After Karen contacted Action 9---we reached her lender, US Bank---a week later, the forced policy issue was dropped, her original coverage renewed. Until then, she had felt hopeless.

"I'll be like a lot of other people, I'll just walk away an increase the mortgage crisis," said Karen.

Many consumer groups question forced insurance, because some lenders make commissions on the policies---they force homeowners to buy.

Consumers can complain to Florida's Office of Insurance Regulation.