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Thursday, December 19, 2013

Bank Settles Force-Placed Insurance Class Action Lawsuit

JPMorgan Chase Bank NA, facing a proposed class action suit regarding its practice of requiring mortgage customers to purchase expensive and unnecessary flood insurance policies in excess of government and lender requirements, has agreed to pay $22.1 million to resolve the issue.

Provisions included in the deal:
  • three-year ban against the bank requiring homeowners to carry flood insurance in excess of the federal minimum standard,
  • six-year ban on the bank receiving commissions from "forced-placed insurance",
  • six-year requirement that the bank to attempt to renew a borrower’s chosen flood insurance policy if it lapses, and
  • restricts the banks ability to go after any deficiency balances or judgments on the borrower’s premiums from the beginning of 2007 through July 2012.
Learn more.