Force-Placed Insurance Class Action Alleges Violations of Truth in Lending Act

Orlando, FLA couple from Florida are not at all happy with their residential loan servicing company and the insurance company their Force-Placed Insurance Bank teamed up with to ram what they view as unnecessary and excessive insurance coverage down their collective throats. To that end, John C. Sekula and his wife, Jacqueline, have filed a class-action Force-Placed Insurance Bank lawsuit, in an attempt to achieve some justice against forces that appear to be motivated by greed.

According to court documents, the Sekulas allege their mortgage provider - Residential Credit Solutions - mandated insurance with coverage limits that exceeded the replacement value of the home, at a value that went beyond the lender’s protectable interest, or so it is alleged. The lawsuit further alleges that were the Sekulas to fail in this demand by their residential loan servicing company, Residential Credit Solutions would force-place an insurance policy that met the lender’s demands and criteria.

The Sekulas have launched a lawsuit with the help of their Force-Placed Insurance Bank attorney, listing Residential Credit Solutions and American Western Home Insurance as defendants. The class-action lawsuit alleges the two defendants teamed up to force-place insurance the plaintiffs deemed as unnecessary and excessive, with defendants benefiting from kickbacks, commissions, discounted services, financial benefits, reimbursements or other compensation, which were concealed from borrowers.

Force-placed insurance indeed has a legitimate place, and represents a defendable right for the mortgage holder of a real property should the property owner fail to provide adequate insurance coverage needed to cover a loss. Some homeowners, due to negligence or out of financial duress, will allow an insurance policy to lapse, leaving real property unprotected against catastrophic loss.

The ability to force-place insurance, as needed, provides to Forced-Placed Insurance Banks the legal means by which to protect their investment.

The problem - as many a Force-Placed Insurance Bank lawsuit has asserted - is when banks collude with insurance companies to profit from the force-placement of insurance that is deemed unnecessary. Numerous plaintiffs have alleged that defendants have forced onto homeowners coverage that is excessive and needless, at rates that far exceed those of standard policies providing more coverage.

The Sekulas seek to represent others similarly situated in their Force-Placed Insurance lawsuit, alleging breach of contract, breach of good faith and fair dealing, unjust enrichment, violations of the Truth in Lending Act, and tortious interference with a business relation. The plaintiffs are seeking actual and statutory damages, refund, interest, and attorney fees and costs, together to exceed $5 million.

The lawsuit is Sekula et al v. Residential Credit Solutions, Inc. et al, Case No. 6:2015-cv-02104, filed December 15, 2015 in Florida Middle District Court.