Single Mom Takes on Banking Giant in Force-Placed Insurance Bank Lawsuit

Dayton, OHIt’s hard enough for a single mother to make a go of it, as she remains the lone person available to pay the mortgage, put food on the table and help children with homework. Now, Jacqueline Barnard must add to her plate the rigors of fighting a class-action lawsuit against the Force-Placed Insurance Bank that lobbed an expensive insurance policy into her corner without her consent.

The lawsuit was filed November 15, 2013 at US District Court in Dayton. According to documents filed with the court, Jacqueline Barnard owns a home in Kansas City, Missouri, with a mortgage held by US Bank valued, as of February 1, 2013, at $77,616.97. A clause in Barnard’s mortgage agreement states that US Bank has the right to place hazard insurance on the asset if the homeowner has shown failure to place the necessary hazard insurance, has insufficient insurance, or has failed to make payments on hazard insurance and thus has allowed the coverage to lapse.

According to Barnard’s Force-Placed Insurance Bank lawsuit, the plaintiff received a letter from US Bank on or about September 17, 2012 informing Barnard that she had insufficient hazard insurance on the property, and thus the Force-Placed Insurance Bank had purchased hazard insurance on her behalf at a value of $132,700, which the plaintiff alleges is far more than US Bank’s financial interest in the property according to the value of the mortgage. The premium cost was identified in court documents as $1,274.00 for a 12-month period.

The plaintiff also notes in her Force-Placed Insurance Bank lawsuit that the insurance placed by US Bank was backdated three months, commencing June 16, 2012 and extending through June 16, 2013. The plaintiff alleges the backdating was not necessary.

The plaintiff also alleges, in a lawsuit drafted with help from her Force-Placed Insurance Bank attorney, that as a result of US Bank purchasing the force-placed hazard insurance from provider American Security Insurance Company (ASIC, and a subsidiary of Assurant Inc.), the latter paid a kickback fee to the former - a fee that was subsequently alleged to have been built into the premium and paid by the plaintiff.

In her lawsuit, Barnard alleges that the kickback is actually part of a standard business practice maintained by ASIC, according to documents which suggest that part of the premium may be used by the insurance company to reimburse the bank.

Barnard alleges through her Force-Placed Insurance Bank lawyer that US Bank is not authorized to pursue reimbursement for charges US Bank did not incur. The plaintiff also alleges that the value of the force-placed policy, referenced in the lawsuit as nearly twice the value of the US Bank’s financial interest in the property, was inflated in order to achieve a larger kickback from ASIC, or so it is alleged. The plaintiff also alleges that US Bank should not be authorized to extend hazard insurance against a period of time - June through August 2012 - during which a hazard cannot occur.

Plaintiffs in the class-action lawsuit are seeking unspecified damages and a jury trial. The Force-Placed Insurance Bank lawsuit is Jacqueline N. Barnard et al v. US Bank, NA Case No. 3:13-cv-00391. The lawsuit was filed in November at US District Court for the Southern District of Ohio, Western Division.