Force-Place Insurance Legal News Articles & Interviews

Los Angeles, CA: Anyone having trouble believing that their insurance company, or bank could collude in such woeful, self-interested activity as Lender insurance need only look to the alleged activities of State Farm, and Wells Fargo as an indication of behavior unbecoming to their clients, customers and American values.

Washington, DC: There is little doubt that the act of allowing homeowner insurance to lapse on a mortgaged property is not, with little exception, done maliciously. For most, the lapse of property insurance has more to do with human error (forgetting to renew), or financial hardship (“do we pay the insurance this month, or feed the baby?”) There is also little doubt, however that while Lender insurance is a perfectly legal and appropriate response in order to protect the investment of the lender, the extraordinary costs associated with lenders insurance are both mean-spirited and unnecessary.

New York, NY: Yet another Lender insurance class action lawsuit could soon be in the pipeline with investigation into the machinations of Cenlar FSB, identified as a leading provider of mortgages and mortgage servicing suspected of participation in a ‘cozy’ relationship with a provider of lenders insurance.

Chicago, IL: As Americans continue to bring Lender insurance lawsuits against entities that allegedly force-place insurance onto property owners at higher rates, Canadians who own property in the US continue to be warned about the potential for lenders insurance.

Newark, NJ: The Lender insurance lawsuits just keep on a-comin’ as homeowners fight back against alleged profiteering on the part of insurance providers and mortgage companies at the expense of the homeowner.

Toronto, ON: Many a Lender insurance lawsuit has been fought on the premise that not only is Force-Place Insurance sometimes foisted upon an unsuspecting homeowner unnecessarily, but the quality of the product is inferior to standard policies, at increased rates.


This fact is even outlined by the Royal Bank of Canada (RBC), in an online information page directed to Canadian clients who also own property in the United States, such as a winter home. RBC notes that Canadian owners of mortgaged US real estate are required to not only have up-to-date property insurance in force, but that they must also advise their mortgage broker, mortgage provider or financial institution of proof of insurance every 12 months, to coincide with the normal time frame that property insurance policies remain in force (in other words, renewable on an annual basis).


It’s when a mortgage broker does not receive verification, or catches wind that an insurance policy has been allowed to lapse, that Force-Place Insurance comes into play. And the language used in the RBC bulletin suggests lenders insurance that tends to be more costly with less coverage, is more fact than allegation:


“This type of coverage most likely will be more expensive than the coverage you would purchase on your property, and it may provide less coverage than the policy you would have chosen independently,” notes RBC. “For example, forced place insurance policies generally do not cover personal property or owner liability. Moreover, the costs associated with forced place Insurance are added to the balance of the home equity or mortgage loan.


“Before ordering forced place insurance, your lender is required to send you two notices,” RBC, one of the major Canadian banks, goes on. “The first notice is at the time your insurance policy expires. If no proof of insurance has been provided, a second notice is sent 45 days after the insurance expiration. If you do not provide proof of insurance coverage, your lender can, and likely will, force-place the insurance coverage.”


Some Forced-Placed Insurance Lawsuits allege that lenders insurance placed on their property turned out to be a complete surprise, suggesting that sufficient notice was not given. What’s more, numerous Forced-Place Insurance lawsuits on the part of states Attorneys General, together with plaintiffs banding together in a Force-Place Insurance class action, allege that certain financial institutions and insurance companies collude to force-place inferior insurance coverage on uninsured property at inflated rates, with kickbacks and payments flowing back and forth between the lender and the insurance provider, or so it has been alleged.


Once recent lawsuit (Robin McNeil and Leslie Lewis on behalf of themselves and all others similarly situated v. LoanCare, LLC and American Security Insurance Company, Case No. 1:16-cv-20830-KMW in US District Court, Southern District of Florida, March 8, 2016) alleges that LoanCare and ASIC manipulated the force-placed insurance process that saw LoanCare receive an effective rebate on the cost of the forced-placed insurance, but said rebate was not passed on to the borrower.


Such Forced-Placed Insurance Lawsuits accuse various lenders and insurance companies of fleecing the pockets of borrowers with inferior insurance products and coverage that cost more than standard policies. Some plaintiffs have alleged that little or no notice was given. It has also been alleged variously that lenders will force-place insurance in areas where it is not required or across time frames that overlap windows of time when regular insurance was in force.


As for the allegation that force-place insurance is more expensive with less coverage than standard policies, RBC of Canada appears to hold that such allegations are more fact, than fiction…

Miami, FL: A class action Force-placed insurance lawsuit that has been on the books for some time was recently amended, but is nonetheless going forward and alleges that defendants in the case fraudulently and improperly withdrew Lender insurance premiums from the accounts of mortgagees that grossly exceeded the true costs of the lenders insurance, or so it has been alleged in the amended complaint.

Turners Falls, MA: The potential limitations of Force-Place Insurance and the added cost is reflected in the sad story of one homeowner from Turners Falls who experienced a fire in her home. Lender Insurance, as it has been widely reported, tends to be more expensive and offers less coverage than more traditional insurance products.

Miami, FL: Plaintiffs embroiled in a Lender insurance lawsuit against PNC Bank NA will have the opportunity to avoid the rigors of a trial and still receive what has been described as an excellent compensatory agreement following final approval of a settlement worth $32.3 million.

Miami, FL: A Force-placed insurance lawsuit against Nationstar Mortgage and Ocwen Loan Servicing LLC has been settled for a combined payout of $217 million. According to the Daily Business Review (11/11/15), the Ocwen share of the settlement was approved in September for $77 million in a New York court, while the Nationstar settlement, valued at $140 million, was given the nod in early November in Miami.