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Force-Placed Insurance Companies, Banks Face Regulators and Homeowners Over Policies

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Los Angeles, CAForce-placed insurance companies face an increasing number of lawsuits over their policies and practices. In addition to homeowners filing their own force-placed insurance lawsuits, regulators have joined in, alleging companies have compounded the financial problems of struggling homeowners by requiring force-placed insurance on properties.

Courthouse News Service (6/28/13) reports that OneWest Bank now faces a lawsuit for its use of force-placed insurance. The plaintiff, Geraldine Doyle, filed suit against a number of defendants, including OneWest Bank, IndyMac Bank, QBE Insurance Group and Assurant, alleging breach of contract, breach of fiduciary duty and unjust enrichment.

Doyle alleges that when her homeowners’ insurance lapsed, her premium skyrocketed from an annual rate of $384 to $2,754. Such premiums, lawsuits and regulators allege, hurt already struggling homeowners and can push them into default. Furthermore, homeowners say they are not given the option of finding cheaper insurance and the force-placed insurance companies have close ties to banks, resulting in high commissions that are not always reported to the borrower.

Assurant Inc has already faced allegations of wrongdoing in the courts. A 2012 class-action lawsuit filed by Joseph and Carol Cascio (claim number 2:12cv00514, US Southern District of Ohio, Eastern Division of Columbus) was filed against JPMorgan Chase Bank and Assurant, alleging the defendants unlawfully forced homeowners to carry flood insurance on their properties that was greater than that required by law.

The action further alleges that Chase had “extracted kickbacks from Assurant, in the form of bogus ‘commissions,’ which have artificially inflated the force-placed insurance premiums that Chase, and ultimately the borrower, have paid. This has enabled Chase to demand inflated reimbursements from borrowers.” The plaintiffs allege that it is the borrower and neither Chase nor Assurant that ultimately pay for the inflated premiums and/or kickbacks.

Specifically, the plaintiffs argue that due to a FEMA-revised flood zone map, their home was placed in a Special Flood Hazard Area. Their neighbors were able to successfully appeal this classification, leading the plaintiffs to file an appeal as well. In the meantime, Chase placed a flood insurance policy on the property in the amount of $250,000, even though there was only $140,000 owing on the mortgage. In addition, Chase was reportedly given a commission of $875 for obtaining the force-placed insurance coverage.

In March 2013, Assurant agreed to pay a $14 million fine to settle allegations by the state of New York that the company overcharged homeowners who had its policies placed with them.

READ ABOUT FORCE-PLACE INSURANCE LAWSUITS

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READER COMMENTS

Posted by

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I finally settled with One West Bank on the Forced placed insurance Claim,
Settlement was for $10,000.00

Posted by

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Please could “Colin Moreton” and “s.c.” who posted comments on this story kindly email me at arthurkam1918@yahoo.com or phone (602) 456-0036. This institution did the same to me and was hoping we could discuss the matter further. Thank you.

Posted by

on
When I bought my home in 2006 i repeatedly asked about flood insurance. I asked 5 times! i was told i would not need it as not in a flood area. I told them that if my house payment was over 650 i would be struggling to pay it. I got my house paid the note every month , they sold it to another company once again no requirement for flood insurance , kept paying my note . Then it was sold to chase suddenly i have to have insurance and my note went from 650 to 798 dollars and i have struggled ever since. I don't want to lose my home!

Posted by

on
Indy Mac Mortgage /One West Bank forced placed a policy for $ 9774.38 for one year for hazard insurance on a small loan of $ 430,000.00 after four years of supplying every year the same policy endorsement ,the bank then decided i was not in compliance of hazard insurance. My insurance was covered up to 78 MPH .The bank would not return calls to my insurance carrier, I finally had to purchase additional insurance (HURRICANE insurance and I wasn't even in a Hurricane zone). The bank didn't care they just assessed me the $ 9774.38 and said if I didn't pay they would foreclose on my property. A absolute bank scam and FRAUD>

Posted by

on
Indy Mac Mortgage /One West Bank forced placed a policy for $ 9774.38 for one year for hazard insurance on a small loan of $ 430,000.00 after four years of supplying every year the same policy endorsement ,the bank then decided i was not in compliance of hazard insurance. My insurance was covered up to 78 MPH .The bank would not return calls to my insurance carrier, I finally had to purchase additional insurance (HURRICANE insurance and I wasn't even in a Hurricane zone). The bank didn't care they just assessed me the $ 9774.38 and said if I didn't pay they would foreclose on my property. A absolute bank scam and FRAUD>

Posted by

on
Wake up-this is the USA- all about ripping off the next guy. This country is not worth the trouble-time to move out.

Posted by

on
12:36 PM 3/26/2012


Fifth Third Bank
Kevin T. Kabat, President & CEO
Madisonville operations Center
MD1MOC2N
Cicinati, OH. 45263



Attn: Paul-Allen Bixler, Regulatory Support Specialist
Office of the President: Fax 513-358-3493
RE: Mortgage loan: xxxxxx6203



Dear President Mr. Kabat:
To whom this matter high concerns:

I'm writing because the OCC recommends that I should attempt to resolve my complaint with FIFTH THIRD BANK first.
So I'm allowing you the opportunity to resolve the fraudulent issue(s). What you did was UNFAIR and you DID NOT FOLLOW THE LAW.
First, I have lost my home due lies and fraud. I'm entitled to file a lawsuit for damages against the party acting fraudulently, and the damages may include punitive damages as a punishment or public example due to the malicious nature of the fraud.
My orginal home mortgage loan made by FIFTH THIRD BANK was signed by me, Robert L.Tatge (a single person) on January 4, 2008 for $310,000.00 @ 6.375% for 30years on a refinanced loan made prior with COUNTRY-WIDE HOME LOANS back on JUNE 12, 2002, for $178,817.91 @ 7% for 30 years.
It starts with the RESIDENTIAL LOAN APPLICATION under guidance of a LAWLESS BROKER, finding derive benefit by manipulation. Year Built 1975: (TRUTH 1900). APPRAISAL MANIPULATION, my understand this broker wasn't satisfied with the first appraisal and asked her to treat the property like she was on LAKE MINNETONKA, so the second time it came in at $420,000. it satified the loan guidelines. He asked if I needed any extra money and now I had a lot of equity and the money was cheap, I could take some out. Not think if I could afford to pay it back. Then he sent me two checks, one he asked if I would destroy, I did, the other I cashed :
Exhibit "A,": (He said, he had other companies,) thats why the check was drawn on: MJC ENTERPRISES LLC, 5115 EXCELSIOR BLVD., SUITE 422, SAINT LOUIS PARK, MN 55416
Exhibit "B,": Because the APPRAISAL (generated on: 12/11/2007 for Loan) was manipulated, it was UNFAIR because my two property tax statements for years 2007 thru- 2009, stated: MAKET VALUE ESTIMATED $324,700 IN 2007/2008 which is $95,300 less than APPRAISAL. This information was accessible @ www.co.kandiyohi.mn.us
Exhibit "C,": Because the APPRAISAL (generated on: 12/11/2007 for the Loan) was manipulated, it was UNFAIR because my second property tax statement for years 2008/2009, which is $92,000 less than APPRAISAL. This information (PUBLIC) was accessible @ www.co.kandiyohi.mn.us

I ask for a modification JUNE, 2009 and was DENIED because of INSUFFICIENT INCOME, I keep up my requests and hired a lawyer, Avi Liss, Liss Law,LLC., Hereford Street, Boston, MA, 02115 (W) 617-778-0363, E-MAIL: aviliss@lisslawboston.com, finely brought me a moditification on August 1, 2009 (lawyer said it was the BEST HE COULD DO! LOAN AMOUNT $327,410.93 @ 5.375% for 40 years, graduated principal by $17,410, lowered interest by 1%, making the pay off difference before the modification the PRINCIPAL WAS $310,000,00 INTEREST WAS $386,238.81 = $696,238.81... NEW MODIFIED MORTGAGE, 40 YEARS, PRINCIPAL $327,410.93, INTEREST $489,836.12 = $817,247,247.05... THE DIFFERENCE OF $121,008.24, It was UNAFFORABLE, I signed it at the Lawyers suggestion. Beginning with the payment due 08/01/2009, monthly including escrow were $2,135.51 Knowing this modification wasn't something I could afford , I asked for HELP, A FORBEARENCE PLAN was offered:
Exhibit "D,": THIS WAS THE "FORBEARANCE PLAN" OFFERED: DUE DATES WERE SET 11/01/2020...YEARS ALL WRONG.
Exhibit "E,": A letter dated: December 16, 2011 from Paul-Allen Bixler, Regulatory, Office of the President, states that after the loan was open for five months, your search had questions regarding my HAZARD INSURANCE POLICY (WHICH THE BANK PAYS OUT OF THE ESCROW ACCOUNT EVER MONTH) and started charging me $500.00 more per month (JULY 1, 2008) on the loan. THIS CAUSED UNDUE PRESSURE, AND I HAD TO CASH IN PART OF A 401K PLAN, PAY EXTRA TAX ON IT, AND LOST PART OF MY FURTURE, BECAUSE I WAS LIVING PAY CHECK TO PAY CHECK. $500.00 PER MONTH WAS THE HAMMER THAT BROKE MY BACK. FIFTH THIRD BANK FORCED PLACED THIS HAZARD INSURANCE POLICY, KNOWNLY BECAUSE THEY PAID THE POLICY THEMSELVES.
Exhibit "F,": AN OUT RIGHT LIE ON NOT HAVING A HAZARD INSURANCE POLICY ON THE SAID PROPERTY @ 13100 SKYLINE DRIVE, PO BOX 363, SPICER, MN 56288, BECAUSE ACCORDING TO MY INSURANCE COMPANY: PIONEER HERITAGE INSURANCE LLC, PO BOX 716, SPICER, MN 56288-0716, STATED: I HAD A SEAMLESS POLICY SINCE ORGINATION, ENDORSEMENT 01/11/2008, If not for this error, I would not have been over financial broken. FIFTH THIRD BANK DID NOT FOLLOW THE LAWS & THEY WERE NELIGENT.

Another misrepresentation on all FORECLOSURE NOTICE'S sent out by the LAWYERS REPRESENTING, FIFTH THIRD BANK: USSET,WEINGARDEN & LIEBO, PLLP, 4500 PARK GLEN RD, #300, MINNEAPOLIS, MN 55416, PHONE 952-925-6888, knownly this is information sent to the lawyers from FIFTH THIRD BANK, mislead the mortgagee.
Exhibit "G,": MULTIPLE & CONFLICTING DOLLAR AMOUNTS IN DEFAULT ON "FORECLOSURE NOTICE" MAKING IT IMPOSSIBLE FOR MORTGAGEE TO UNDERSTAND WHAT THEY MEAN AND GET HELP IF NEEDED.
#1: MARCH 9, 2009 $12,880.19
#2: MARCH 9, 2009 $15,276.19
Exhibit "H,": MULTIPLE & CONFLICTING DOLLAR AMOUNTS IN DEFAULT ON "FORECLOSURE NOTICE" MAKING IT IMPOSSIBLE FOR MORTGAGEE TO UNDERSTAND WHAT THEY MEAN AND GET HELP IF NEEDED.
#1: MARCH 22, 2011 FIFTH THIRD BANK, SAID I OWE $2,365.80 TO REINSTATE MORTGAGE.
#2: MARCH 22, 2011 FIFTH THIRD BANK, SAID I OWE $3,874.40 TO REINSTATE MORTGAGE.
#3: MARCH 22, 2011 FIFTH THIRD BANK, SAID I OWE $35,100.90 TO REINSTATE MORTGAGE.
Exhibit "G,": The APPRAISAL MANIPULATION, AND ACTUAL SALES THAT HAPPEN;
#1: 4 HOMES TO THE NORTH 13235 SKYLINE DRIVE, SPICER, MN. 56288 SOLD $199,900.00
#2: 2 HOMES TO THE NORTH 13182 SKYLINE DRIVE, SPICER, MN. 56288 SOLD $199,000.00
#3: ABOUT 10 LOTS TO THE SOUTH, VACANT LOT PARCEL# 85-934-0300 SPICER, MN.
MLS#34392 $189,000.00
I HAD A 3 HERNIA OPERATION ON AUGUST 5, 2011 @ THE VA HOSPITAL IN MINNEAPOLIS, MN. I HAD TO STAY BECAUSE OF A VAC (HEALING MACHINE) RESTRICTION AND VA HOSPITAL RULES, OUTSIDE CONTACT WAS DIFFCULT. I HAVE NOT YET HEALED AND HAVE A HOME HEALTH NURSE COME TO MY HOME ON WEDNESDAY STILL AS OF MARCH 28,2012.
FIFTH THIRD BANK KNEW ABOUT MY OPERATION AND PROCEEDED WITH THE "FORCLOSURE" BY HAVEING THE SHERIFF'S SALE ON NOVEMBER 16, 2011.

FIFTH THIRD BANK DID NOT FOLLOW THE LAWS & WAS NEGLENT.

DISCUSSION: WHEN YOUR DREAM HOME IS FORECLOSED ON, YOUR HEART IS BROKEN, I BELIEVE FIFTH THIRD BANK WILLFULLY WENT AFTER MY LOAN AND DECIDED AFTER THE LACK OF FOLLOW-UP AND POOR MANAGEMENT POLICIES WITH FEDDIE MAC BACKING. THEY THOUGHT THIS WAS A GOLDEN EGG. THEY COMMITTIED FRAUD, TOOK MY HOME, DESTROYED MY CREDIT, AND MY RETIREMENT FUNDS.


I NEED FOR YOU TO DO THE RIGHT THING.



WITHOUT PREJUDICE,
Mr. Robert L. Tatge March 26, 2012


E-MAIL: robtat@peoplepc.com



Cc: USSET, WEINGARDEN &LIEBO, PLLP, ATTN; AMY VAN ZUMMEREN AT FAX: 952-925-5879

Cc: INDEPENDENT FORECLOSURE REVIEW, (LETTER) PO BOX 2587, FAIRBAULT, MN 55021-9981

Cc: OFFICE OF MINNESOTA ATTORNEY GENERAL, LORI SWANSON, HONORABLE: BILL GOSIGER, FILE: 439011, FAX 651.282.2155

Cc: JEROME A. RITTER, ATTORNEY AT LAW, FAX: 651-222-1263

Posted by

on
Due to needing to do home repairs and the forced insurance placed on my home. My payment went from $450 a month to $1200. I am on a fixed income and when I fell behind on my payments Indy Mac/One West worked with me by trying to make me pay $1800 a month. I was forced into bancruptcy.

Posted by

on
This also happened to my sister, who is widowed and has always paid her mortgage on time prior to the force placed insurance by CitiMortgage Grp or CitiBank. Her mortgage went from $847. to 1459. per month! Which she just could not afford and the mortgage company refused partial payments, in addition they also imposed criminally high late fees. She lives in Florida is there any assistance for her there? Please help her if you can.

Posted by

on
My insurance was replace by Chase with a flood zone insurance and three times the amont of what I was paying, and I am not in a flood zone.

Posted by

on
I have always carried home owners insurance Chase bank added their high insurance to my home. Chases insurance only covers the home not my belongings. My geico insurance plus umbrella insurance covers everything. I refuse to pay chase bank for the insurance they added.

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