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Wells Fargo Hit with Force-Placed Insurance Lawsuit

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Stamford, CTWells Fargo and Assurant face a force-placed insurance lawsuit alleging the financial firms artificially inflated force-placed insurance premiums charged to homeowners. The two companies are the latest in a line of financial institutions alleged to have charged excessively high rates for force-placed insurance - also called lender-place insurance.

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.

In the case of the Wells Fargo and Assurant lawsuit, the plaintiffs allege the companies provided “unnecessary or duplicative coverage” because the policies were backdated to collect premiums when there was no lapse in coverage or no risk of loss. The plaintiffs further allege the defendants obtained unjustified profits from fees or commissions. Because of those fees and commissions, the lawsuit claims, lenders have no incentive to shop for the best insurance rate available. Rather, they refer homeowners to companies that provide a financial benefit to the lender.

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.

READ ABOUT FORCE-PLACE INSURANCE LAWSUITS

Force-Place Insurance Legal Help

If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to an insurance lawyer who may evaluate your Force-Place Insurance claim at no cost or obligation.

READER COMMENTS

Posted by

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We recently closed on our first house. We took what we thought were extensive efforts to pick a local bank with the best interest rate we could find. We got into conflict with the bank, and I think they overheard our comment saying "well, at least you're not Wells Fargo", and a month later our loan was sold to Wells.

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.

Posted by

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Wells Fargo forced placed insurance on my home and I do not have any Wells Fargo accounts or loans at this time. I have homeowner insurance on my home. I had a HELOC originated in 2000 that has been paid in full and I have a recorded Lien Release and Deed of Reconveyance filed at the Recorders Office.

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.

Posted by

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Where/who do you contact for this lawsuit? I received a settlement check but my dogs ate it (no joke!) and need to get a new one re-issued. Can anyone help?

Posted by

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My situation is different as I have fallen into the statistical number of odds this would happen. My bathroom was flooded with water in January 2016. I just completed my modification. Please note that in my modification application section about homeowners insurance and HOA information, I stated that I did not have homeowner's insurance and I provided the Property Management name and address that my HOA contracts with. I When I contacted Wells Fargo for my insurance information they provided me with my HOA master policy, which was found to be inadequate. The office manager told me that the policy does not cover walls in. I contacted Wells Fargo again for clarification and they stated that the master policy was a walls in/walls out & it even covered applicances. I finally got the property management to send a plumber out, but they told me that if it were found to be my pipe I would be liable for the payment to Roto-Rooter. To date, I'm living in a condo with mold & holes in the walls and holding Wells Fargo negligent. When I applied for a modification, I clearly stated that I did not have homeowners insurance. Wells Fargo believed that my HOA master policy covered walls in/walls out; that is what the insurance resolutin specialist told me. When I sent her a current declaration for review she later stated that the peril coverage only covers walls out. I would like to know if anyone out there has experienced a similiar situation to my unique circumstances.

Posted by

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I am currently counter-suing Wells Fargo on my foreclosure. I have defeated their Motion to Dismiss and the insurance companies motion to sever.

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.

Posted by

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I have Assurant and Wells Fargo -- the Wells Fargo note is fabricated using Vendor Scape, (documentation received from the PA Attorney General's office) the Wells fargo fabricated note has a fake address on it and it has my husband's signature. supposedly my husband signed this Wells fargo note that can not be found in 2005 when Fannie mae securtized it. That's funny cause my husband died in 1998. So I have the Assurant paperwork complete with a fake engineers seal for flood insurance at the expensive zone for a fake address for a home that doesn't exist in a corn field that is totally out of a flood hazard detminent zone

Posted by

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I have condo in Maryland and mortgage was placed with Ocwen financial. There is Master Flood, Master Insurance policy with or through State Farm. I also have my Unit Owners policy with State Farm too. Each has different renewal date. Moreover, State Farm agent told me it automatically notifies Ocwen each time a policy renews. Yet, I was constantly getting letters, staggered, asking for proof of insurance...and then did follow-up...Ocwen representatives kept saying the updates were not received. My agent sent them twice and I would too. Finally, I threatened to file complaints with FTC, HUD, who ever. Ocwen assigned Ombudsman and after 6 or 8 weeks, responded would not bother to ask for Flood Insurance and noted my Unit was not in the flood zone and also since getting notice from State Farm would not dunn me anymore either.

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.

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