M&S is investigating a potential class action against major banks and insurance companies for allegedly steering mortgage customers to overpriced force-place insurance plans.
Mortgage lenders and servers “force-placed” insurance on borrowers if they do not or cannot pay for homeowners’ insurance. Force-placed insurance is far more expensive than a regular homeowners’ policy would be for the same home. The lending institutions in question have allegedly steered distressed home owners into plans up to 10 times as costly as the plan they originally held. Reports indicate that these new plans were either sold by affiliates of the banks themselves, and that the banks may receive kickbacks in return for their referrals to outside companies.
Companies being investigated include but are not limited to JP Morgan Chase & Co., Wells Fargo & Co., Citigroup and Bank of America.
If you have paid for force-placed insurance and think you were overcharged, we would like to speak with you. Please contact us.
Force-Placed Insurance in the News:
Bank of America and others Being Probed Over Home Insurance: Source
Reuters, by Karen Freifeld, 1/11/2012
Coping with High-Priced Insurance That Lenders Make You Buy
The New York Tiems, by Paul Sullivan, 1/20/2012
Hazard Insurance With Its Own Perils
The New York Times, by Gretchen Morgenson, 1/21/2012
Look Who’s Pushing Homeowners Off the Foreclosure Cliff
Bloomberg, 5/6/2012