The Wells Fargo and Assurant lawsuit (case number 3:15cv671, in U.S. District Court for the District of Connecticut) was filed by Jeffrey Navin and John O’Reilly, and seeks to represent similarly situated plaintiffs. In court documents, the plaintiffs allege Wells Fargo and Assurant obtained “improper financial benefits by imposing force-placed insurance policies on properties, some of which are already covered by homeowners insurance policies purchased by the homeowner.”Force-placed insurance is insurance put on a property where the insurance coverage has lapsed to cover the mortgage lender’s stake in the property. But lawsuits allege a variety of complaints against companies involved in force-placed insurance. These complaints include force-placing insurance when the homeowner has a current policy, force-placing insurance for non-existent hazards (such as floods when the property is not in a flood zone), retroactively applying the insurance to periods when no claim was made against the property or there was no risk of loss, charging excessively high fees because the homeowner is not able to purchase commercially available insurance, charging for policies that covered more than the lenders’ stake in the property, and charging high fees to cover illegal kickbacks to lenders.
In some cases, force-placed insurance costs up to 10 times the rate of traditional homeowner insurance, even though force-placed insurance often has limited coverage.
READ MORE FORCE-PLACE INSURANCE LEGAL NEWS
Some companies involved in force-placed insurance have settled lawsuits. According to Gordon Gibb, writing for LawyersandSettlements, in April HSBC agreed to pay $1.8 million to settle a force-placed insurance lawsuit.
READER COMMENTS
Alice W
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We switched homeowner's policies and immediately paid the escrow difference. I believe we could have elected not to do escrow because our credit was very good, but at the time we thought it would be convenient and since the bank we were working with wasn't terrible, we thought, why not?
Well, it's 8 days to the cancellation of our insurance policy because of lack of payment from Wells. They claim the check was sent out 12 days ago. After calling our insurance company we found out that Wells probably "batched" it with others but - they refuse to simply wire the money to the insurance company, and we feel they are purposefully letting time run out in the hopes of then force placing their own policy. Of course this strategy will not work. If worse comes to worse I will make a duplicate payment to the insurance company, and then wait for their payment, and have my premium refunded in 14 days. I know we will lose interest on the money in the interim, but anything to get Wells' insurance away from us.
We are obviously trying to break up escrow but it could be a year. I am really upset the class action lawsuit is over because, if they do try to screw us over in the little remaining time, what recourse do we have? It's horrible dealing with an unethical company.
Terry Floyd
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I have tried to communicate with WFB and it is useless.
It is my firm conviction WFB fabricates documents, manipulates accounting with malintent on milking homeowner equity and making false claims for false accounts.
Debra Smith
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Karen Lavow
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Steven White
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I had my insurance payments in my escrow account. Wells Fargo failed to make the insurance payments and it was canceled. I called them and they reinstated my insurance. 3 months later my insurance was again cancelled for lack of payment. I again called and they reinstated it, but the next day canceled my insurance and instated forced placed insurance without notifying me for 9 months at which time they sent me an outrageous bill.
I made payments on this for over a year. One month I made half a payment and then the rest in a separate payment. 3 months later I was foreclosed upon as they informed me I was behind on my payments because they did not accept partial payments. They did not return the partial payments so that I could make a full payment, but kept them.
I should be going to trial on this matter soon.
JoAnn Kennedy
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James B Dowd
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THIS WEEK OCWEN SENT ME A LETTER, AS OF SEPTEMBER 1, 2015 MY LOAN WAS TRANSFERRED TO JP MORGAN MORTGAGE...BARELY HAD TIME TO STOP THE AUTO PAY TO OCWEN TOO.