For ages, Aaron Resnick has been complaining over the forced place insurance practices of the major lending institutions. Recently, as reported in the South Florida Business Journal, JPMorgan Chase & Co. and Assurant reached a $300 million settlement in a federal class action lawsuit in Miami over allegedly overcharging homeowners for forced placed insurance.
The class action was filed in June 2012 on behalf of borrowers with forced place insurance policies as of June 2008. The law firms representing the plaintiffs are Kozyak Tropin & Throckmorton, P.A., Podhurst Orseck, P.A., and Harke Clasby & Bushman LLP. They will share attorney fees and expenses paid by the defendants of no more than $20 million.
Now, for the downside. Even though JP Morgan and Assurant made allegedly over $1 billion dollars, Chase and Assurant will only have to pay 12.5 percent cash refunds to class members who paid the premiums of the force placed insurance and a 12.5 percent credit to class members who were charged the premiums but never paid them.
On the upside, JP Morgan Chase also agreed to no longer allow its insurance agents to collect commissions from making force-placed insurance policies.
This is a practice ripe in the industry and it must stop. The outrageous premiums oftentimes to cover more than the mortgage requires must be stopped across the board.