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$31M Settlement Approved in BofA Force-Placed Insurance Class Actions


This is a settlement for the Bank of America Faces Fraud Class Action over Flood Insurance lawsuit.

Los Angeles, CA: Final approval has been granted for a $31 million settlement of seven proposed force-placed insurance class actions alleging Bank of America NA (BofA) illegally forced homeowners to buy excessive amounts of flood insurance.

Approved by a federal judge in Oregon, the settlement will see BofA pay $31 million into a settlement fund, with plaintiffs receiving $2,500 each as an incentive award. The approval order also calls for certification of a class for settlement purposes only.

The lawsuits were filed in 2011 alleging BofA sent letters to homeowners and other borrowers informing them that they carried insufficient flood insurance because they lived in special flood zones, where there was a high risk of flooding and associated hazards. However, there is no federal requirement for homeowners living in those areas to carry additional insurance, the lawsuits claimed. BofA allegedly ignored proof sent by the plaintiffs demonstrating that they med the allegedly unnecessary requirement.

Under the terms of the settlement, BofA will make a series of changes to its insurance practices, including not taking any commission from force-placed flood insurance for three years. The bank also agreed to cease giving out opt-out letters from the forced policies in some of its future mailings and to refund co-op borrowers for any force-placed insurance that was not required by their loans.

The case is Larry Arnett et al. v. Bank of America NA. et al., case number 3:11-cv-01372, in the U.S. District Court for the District of Oregon.

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Published on Sep-22-14


READER COMMENTS

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When I bought my house there were no flood insurence needed.now bank of America is threatening me saying if I don't get flood insurence they can force me to pay up to $10,000 .i am given 22 days to correct this by bank of america. It is very unfair to people like us low income to come out with that money.now I am required to pay for motgage. home owners insurence and flood insurence. This is not fair.

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