Hot Issues in Consumer Rights

Force-Placed Insurance: A New Way Some Lenders Took Homeowners to the Cleaners 

As everyone knows, homeowners have suffered during a steep decline in housing prices, as well as a deep recession. That left many underwater, so that the homeowners struggled to make their payments, and at times missed them. At times the homeowners lost their insurance either because of a missed payment or some other reason.

Working together with insurance companies, some lenders took homeowners to the cleaners by charging multiples for “force-placed” insurance that the lenders put in place. The lenders typically received kickbacks or benefits from the insurance companies at the same time. Through that practice, the homeowners’ debts grew even worse.

Several lawsuits have been filed to address force-placed insurance, and many have already settled and have received or are awaiting court approval, including cases involving banks like Chase, Wells Fargo, HSBC, SunTrust, and Bank of America.

Other lenders are being investigated for force-placed insurance practices. If you believe you’ve suffered from force-placed insurance practices and your loan was serviced by Ally Financial, PHH Mortgage, OneWest Bank, MetLife Home Loans, BB&T Mortgage, Cenlar FSB, or Fifth Third Bank, let us know.