Boston, MA (PRWEB) April 16, 2012
Force-placed insurance class action lawsuits are being filed throughout the country as borrowers continue to report being charged allegedly excessive and unreasonable premiums for force-placed insurance by their Lender, Loan Servicer, or other parties. (US District Court, New Jersey, No.: 12-1117; US District Court, New York, No.: 12-2261; and US District Court, California, No.: 11-3058). The Consumer Protection Attorneys of Gilman Law LLP are actively assisting individuals that may have been charged by their bank, lender, or loan servicer for force-placed mortgage insurance premiums.
What is Force-Placed Insurance?
Force-placed insurance is a practice among big banks, large lenders, and loan servicers, which has gained popularity since the downtown of the housing market began and homeowners had trouble keeping up with payments on their home insurance. Most residential mortgages require the borrower to keep homeowners’ insurance coverage on the mortgaged property. In theory, when a borrower fell upon hard times, this would allow banks and lenders to place their own insurance policy on the property to protect their interest. Instead, after quickly realizing the profit potential of force-placed insurance policies, many of these big banks, large lenders, and mortgage servicers formed their own so-called “specialty insurance companies” for the sole purpose of offering force-placed insurance policies on the troubled property, according to the complaints.
These force-placed insurance policies can often cost 10 times more than a traditional homeowners insurance policy, according to Benjamin Lawsky of the New York Financial Services Office. Not only are force-placed insurance policies expensive, the practice of issuing such policies through an affiliate or subsidiary of the bank or lender raises questions about conflicts of interest and kickbacks between unrelated companies.* JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo are a few of the major companies involved in the New York inquiry.
The complaints allege that many of these force-placed insurance policies were put in place retroactively. Further, the complaints allege that the lenders’ and loan servicers’ current practice of force-placing insurance policies violates numerous state and federal consumer protection laws.
How To Get Help for Force-Placed Insurance:
Borrowers that have been charged a force-placed insurance premium are encouraged contact the Consumer Protection Attorneys at Gilman Law LLP to discuss potential rights to recovery by calling toll free at (888) 252-0048, e-mailing consultations(at)gilmanlawllp(dot)com, or visiting our Force-Placed Insurance Website to receive a Free Consultation and Case Review from a Consumer Protection Attorney. Gilman Law LLP is a leading national law firm protecting the rights of consumers for over 33 years.