Force Placed or Lender Placed Insurance

Shapiro Haber & Urmy LLP is investigating and prosecuting cases concerning banks forcing mortgagees to purchase more hazard or flood insurance than they are obligated to under the terms of their mortgage.   In this regard:

Shapiro Haber & Urmy LLP has filed a class action alleging breach of mortgage contracts against Bank of America, N.A. and BAC Home Loans Servicing, L.P.  The complaint was filed in the United States District Court for the District of Massachusetts on behalf of all persons for whom Defendants purchased and charged the cost of hazard or flood insurance in excess of the coverage amounts required by the mortgage agreements.  The case is entitled Berger et al v. Bank of America, N.A. et al, C.A. No. 1:10-cv-11583.

The complaint alleges that Defendants have established and enforce a nationwide policy that requires and compels the banks to maintain greater hazard and flood insurance coverage than required by their mortgages.  Defendants enforce their insurance coverage requirement by demanding that the banks obtain the amount of hazard and in some instances, flood insurance coverage “required” by the Defendants.  If the banks fail to comply with the Defendants’ demands, the Defendants purchase hazard or flood insurance coverage so that the total insurance coverage on the real estate will meet the Defendants’ insurance coverage “requirements.”  That is called “force placed insurance” or “lender placed insurance”.  In doing so, the Defendants cause the insurance coverage on the real estate to be greater than required by the mortgage agreements.  The premiums for that additional insurance often costs far more than insurance obtained by the homeowner.  And, the Defendants profit when they force place that overpriced insurance.

Shapiro Haber & Urmy LLP filed a second, related complaint on February 23, 2011 in the United States District Court for the District of Massachusetts.  The case is entitled Kolbe v. Bank of America, N.A. et al, C.A. No. 1:11-cv-10312.

 

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Our investigation shows that other banks also require their mortgagees to buy more hazard and flood insurance than they are obligated to maintain.

If you have had hazard or flood insurance force placed by your mortgage servicer – BAC Home Loans, Bank of America or any other bank or mortgage servicer – we would be interested in discussing this with you.  Call 617-439-3939 or click here to contact us through our website.