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Single Mom Takes on Banking Giant in Force-Placed Insurance Bank Lawsuit

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Dayton, OHIt’s hard enough for a single mother to make a go of it, as she remains the lone person available to pay the mortgage, put food on the table and help children with homework. Now, Jacqueline Barnard must add to her plate the rigors of fighting a class-action lawsuit against the Force-Placed Insurance Bank that lobbed an expensive insurance policy into her corner without her consent.

The lawsuit was filed November 15, 2013 at US District Court in Dayton. According to documents filed with the court, Jacqueline Barnard owns a home in Kansas City, Missouri, with a mortgage held by US Bank valued, as of February 1, 2013, at $77,616.97. A clause in Barnard’s mortgage agreement states that US Bank has the right to place hazard insurance on the asset if the homeowner has shown failure to place the necessary hazard insurance, has insufficient insurance, or has failed to make payments on hazard insurance and thus has allowed the coverage to lapse.

According to Barnard’s Force-Placed Insurance Bank lawsuit, the plaintiff received a letter from US Bank on or about September 17, 2012 informing Barnard that she had insufficient hazard insurance on the property, and thus the Force-Placed Insurance Bank had purchased hazard insurance on her behalf at a value of $132,700, which the plaintiff alleges is far more than US Bank’s financial interest in the property according to the value of the mortgage. The premium cost was identified in court documents as $1,274.00 for a 12-month period.

The plaintiff also notes in her Force-Placed Insurance Bank lawsuit that the insurance placed by US Bank was backdated three months, commencing June 16, 2012 and extending through June 16, 2013. The plaintiff alleges the backdating was not necessary.

The plaintiff also alleges, in a lawsuit drafted with help from her Force-Placed Insurance Bank attorney, that as a result of US Bank purchasing the force-placed hazard insurance from provider American Security Insurance Company (ASIC, and a subsidiary of Assurant Inc.), the latter paid a kickback fee to the former - a fee that was subsequently alleged to have been built into the premium and paid by the plaintiff.

In her lawsuit, Barnard alleges that the kickback is actually part of a standard business practice maintained by ASIC, according to documents which suggest that part of the premium may be used by the insurance company to reimburse the bank.

Barnard alleges through her Force-Placed Insurance Bank lawyer that US Bank is not authorized to pursue reimbursement for charges US Bank did not incur. The plaintiff also alleges that the value of the force-placed policy, referenced in the lawsuit as nearly twice the value of the US Bank’s financial interest in the property, was inflated in order to achieve a larger kickback from ASIC, or so it is alleged. The plaintiff also alleges that US Bank should not be authorized to extend hazard insurance against a period of time - June through August 2012 - during which a hazard cannot occur.

Plaintiffs in the class-action lawsuit are seeking unspecified damages and a jury trial. The Force-Placed Insurance Bank lawsuit is Jacqueline N. Barnard et al v. US Bank, NA Case No. 3:13-cv-00391. The lawsuit was filed in November at US District Court for the Southern District of Ohio, Western Division.

READ ABOUT FORCE-PLACED INSURANCE AND BANK LAWSUITS

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READER COMMENTS

Posted by

on
I got a home loan thru RBS Citizens Bank in Rhode Island back in 2004.

The flood insurance policy at the time I signed the contract was that I was required to maintain flood insurance for the 'lessor of' ... either the amount of the loan or the replacement cost value of the property.

so I went with Citizens to save money on Flood insurance premiums.

I had a policy for $150,000 which was fine with them at the time. In 2012 they changed their policy and forced me to get coverage for replacement cost of my home.

like the others.. never been behind in a payment and Citizens never suffered any financial losses due to flood issues at my home, ever.

They won't do a darn thing about it so.. I sent them a letter asking them to respond in writing explaining why they they have chosen to 'breech their initial contract' and up my insurance coverage when I had adequte insurance (to their guidelines) at the time the loan was originated.

Once I receive the letter I'm filing a complaint with FDIC to see if they'll pursue this situation.

If nothing happens with FDIC I'll jump on one of these class act law suits against Citizens and just go from there.

In the mean time I'm switching my mortgage to RI Credit Union in Rhode Island who only requires me to carry flood insurance on the amount of the loand and is willing to stand behind their offer in writing. Good people at RI Credit Union for sure.

Going to pay off Citizens Bank so I no longer have to deal with a bank that offers 'breech of contract' 'bait and switch' loans to home owners.

NOT HAPPY IN RHODE ISLAND!

Posted by

on
Try having your lender call your insurance company and cancels your policy and cashes the premium refund check and the very same day adds force place insurance on your property after they already cancelled one that was 1/3 of the price. Wahh a single mom she is no different than anyone else fighting the white collar criminals

Posted by

on
We had a similar thing happen to us starting in 2008 when GMAC was struggling with the Mortgage crisis that at first they imposed little fees per month and then when the added fifty dollars per month they came at us with forced Flood Insurance. They said we had to take their $2700 per year policy even though we showed them that our Insurance policy covered our house. We bought our house in 2005 and had always been on time and never missed a payment for $159,000 and only had a $55,000 mortgage and paid $700 per year on our Insurance. They would not accept our insurance and wanted us to pay the insurance which they tacked onto our mortgage and then when we only paid our normal payment they declared us to be in foreclosure for failing to pay. We were threatened with either losing our house or paying this. Thank god we were able to beg and borrow the money to pay off our mortgage as they literally threatened a Sheriffs sale on our house. And the fun part was the government owns 70% of GMAC and you can easily do the math that it was an additional 5% per year payment of the entire mortgage such that this would add another 5 years at normal payment, or if we did what they wanted our payment went up 50% per month from $500 to $750 and we were on a Fixed rate supposedly. So we Don't trust Banks, and the Government and will Never buy a GM product as long as we live!

Posted by

on
what in the world is a force-placed insurance bank? A force-placed insurer is likely either Assurant or QBE First, and neither is a bank, although it could also be issued through an insurance subsidiary owned by the bank. The long story short is CPI (Collateral Protection Insurance) should be a service, not a product.

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