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Billions in Settlement Dollars from Force-Place Insurance Lawsuits

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Miami, FLA 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.

The combined settlement will benefit more than a million homeowners nationwide who were saddled with Lender insurance at allegedly inflated rates.

As big as the combined settlement is, it’s a drop in the bucket - especially in the Sunshine State, where no fewer than 14 Force-Place Insurance class-action lawsuits have been filed in the Southern District of Florida. Those settlements, according to the report, combined to a total of $2 billion, benefiting upwards of 4 million homeowners.

Ocwen and Nationstar are two of the largest mortgage servicing entities in the United States.

The practice of Force-Place Insurance is a legitimate process, providing the capacity for mortgage holders to push insurance coverage onto mortgaged properties that are found to have insurance coverage considered inadequate or lacking altogether. The problem, according to plaintiffs embroiled in many a Force-placed insurance lawsuit, is that Lender insurance (sometimes called creditor-placed insurance) has been found to be more costly than standard policies, with less coverage.

While the creditor is placing the lenders insurance against the mortgaged property to protect the investment against catastrophic loss, the actual legal owner of the property is stuck with paying what is often a grossly inflated rate.

The report in the Daily Business Review noted that in some cases, insurers paid commissions to lenders of up to 25 percent in exchange for the business. Those costs, it is alleged, were passed along to homeowners already struggling with the collapse of real estate values in the midst of a bursting housing bubble.

US Magistrate Judge Jonathan Goodman approved the Ocwen settlement September 14 and noted, “The settlement is generous to class members, providing relief approximating a trial win and for many class members exceeding a trial win,” Goodman wrote in his 75-page decision. Homeowners will recover about 12.5 percent of the net insurance premium.

Ocwen has been down this Force-placed insurance lawsuit road before. The company previously reached a $150 million settlement with New York state over accusations of improper servicing practices, the issuance of allegedly excessive charges and other practices that overburdened homeowners with excessive forced-placed insurance terms while already in distress due to plunging real estate values.

Case information was not available at press time.

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

on
In the 2010 mortgage crisis I was in the middle of a loan modification with GMAC Mortgage, tried a million times for answers 4 months later I was turned over to Nationstar Mortgage and supposedly GMAC filed Chapter 11 a couple years later, they screwed everything up so bad I almost lost my home, then, 5 years later they came after me with a foreclosure notice , a back door loophole with GMAC and Nationstar they almost got my home, I fought the good fight, had to buy my home back so to speak so many inaccuracies the credit bureau removed them completely , my heart goes out to all who have dealt with this, they should be sued by all , by Gods grace my home was saved!

Posted by

on
I was not a party to this lawsuit. However, for two years I have attempted to get a loan modification from Nationstar Mortgage LLC. My loan was recently sold to Rushmore Loan Management Services LLC. I am fighting foreclosure now.

When I was asking for, and had a "Pending and Active " loan modification application with Nationstar Mortgage LLC, we were forced to pay for "Lender placed Insurance" on our home.
Nationstar Mortgage LLC forcibly place a homeowner insurance policy on our home that was about $400.00 more than we had previously.
Nationstar Mortgage LLC place a residentcial homeowner policy effective 10/5/2014 thru 10/5/2015. The policy was from AMERICAN SECURITY INSURANCE COMPANY, and we were notified of this forced place insurance on December 26, 2014. (Nationstar Mortgage LLC). For the entire two years of our loan modification with Nationstar Mortgage LLC, I was baraged with requests for documents and "more information".
On 6/1/2016, our loan was transferred or "sold" to Rushmore Loan Management Services, LLC. We are still fighting foreclosure. On 6/2/2016 I received notice that Nationstar Mortgage LLC CANCELLED OUR HOMEOWNER POLICY WITH AMERICAN SECURITY INSURANCE COMPANY.
And now, Rushmore Loan Management LLC is DEMANDING PROOF OF ACTIVE HOMEOWNER'S INSURANCE as part of our pending loan modification application. We will lose our home to Rushmore and Aztec Foreclosure on 7/21/16. We I attempted to STOP the foreclosure last week, (trustee sale on 7/7/16) - which was a DUAL TRACKING SITUATION, that is when they asked me for the insurance. All of a sudden, I receive an email from them with the demand for information - we NEVER had that before.

Posted by

on
Cit Group Forced me to Cancel My Insurance Take theirs in a Bankruptcy. Since this We got hit by 3 bad Storms. I fixed house no money.Insurance scam. Forced me behind on house payments still struggling.Over 60,000 due me.Now have over $100,000 in damages. Water damage.Hail Wind Rain Flood.

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