Miami, FLA settlement deal reached in April between defendants in a Lender Insurance lawsuit and homeowners over Force-Place Insurance premiums that were allegedly inflated was formally approved by a federal judge in Florida September 14. The final bill for defendants Ocwen Financial Corp. and Assurant Inc. will be $140 million.
Lenders insurance is a product brought into play when homeowners fail to provide insurance on real property to which a mortgage is registered. On other occasions a policy is allowed to lapse or in the mortgage holder’s view, there is insufficient insurance to cover the asset in the event of a catastrophic loss. In such a situation, a mortgage holder has the authority to force-place insurance coverage in order to protect the mortgaged asset.
The problem, as many homeowners and plaintiffs in Force-Placed Insurance lawsuits can attest, is that lender insurance is often more expensive, with less coverage than standard policies. In many cases, premiums have been found to be wildly inflated.
According to court documents, the defendants admitted that rates for lenders insurance would be higher than those of more traditional policies - but failed to tell homeowners those premiums would not only be up to ten times more expensive, but that the bank would profit from those admittedly inflated premiums.
The Force-placed insurance lawsuit alleged that Assurant, as the insurer, paid Ocwen to inflate the premiums. Several Force-Placed Insurance Lawsuits have alleged the existence of “cozy” relationships between banks and insurance companies as a means to inflate profits on the backs of unsuspecting homeowners. Various states have been cracking down on such force-placed insurance terms, with Attorneys General vowing to eradicate the unfair practice.
The forced-placed insurance class-action settlement, approved through a 70-page decision penned by US Magistrate Judge Jonathon Goodman just days ago, provides compensation to some 400,000 class members who will share in the $140 million settlement. Goodman, in his decision, noted the fairness of the settlement.
“Unlike some consumer class settlements, this is not a low-dollar value or ‘coupon’ settlement,” he wrote. “In many instances, perhaps most, the claim settlement relief will be worth hundreds of dollars to the average Claimant.”
The Force-placed insurance lawsuit is Lee v. Ocwen Loan Servicing LLC et al., Case No. 0:14-cv-60649, in the US District Court for the Southern District of Florida.
If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to an insurance lawyer who may evaluate your Force-Place Insurance claim at no cost or obligation.