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Regions Bank has agreed to a $612,500 class action lawsuit settlement over allegations they improperly benefitted from the procurement and issuance of a Lender-Placed Flood Insurance (LPFI) scheme that charged homeowners inflated premiums for flood insurance coverage forced on their properties.
Lender-placed insurance (also known as force-placed insurance) is hazard, flood, flood gap or wind insurance coverage that is placed on a borrower’s property by the mortgage lender to protect the borrower and lender when the borrower’s insurance policy lapses, or when the borrower does not maintain a homeowner’s insurance policy that is acceptable to the mortgage lender.
If approved, the settlement will resolve a 2014 class action lawsuit (Mahan v. Regions Financial Corp., et al.) that accuses Regions Bank and its subsidiaries of forcing borrowers to have flood insurance for their property pursuant to a residential mortgage or home equity loan or line of credit, and evidence of acceptable coverage was not provided (for example, when the insurance policy did not exist or had lapsed). Regions would allegedly place flood insurance in a manner that enabled them to obtain an unauthorized benefit.
The plaintiffs also allege that the way in which LPFI Policies were obtained and placed caused the LPFI charges to be excessive.
Regions Bank has agreed to the terms of the class action settlement without admitting any liability or wrongdoing.
The Regions Bank force-placed insurance settlement was preliminarily approved on June 18, 2015.
Who’s Eligible
Under the terms of the Regions Bank Force-Place Insurance Settlement, Class Members include: “All borrowers in the United States who, within the Class Period, were charged by Regions Bank and/or its respective subsidiaries and affiliates and/or persons acting for or on their behalf, as insured or additional insureds for a lender-placed flood insurance policy.”
The Class Period begins on Aug. 1, 2009 and ends on May 8, 2015.
NOTE: Lender-placed hazard insurance is not included in the settlement.
Potential Award
Varies. Each Class Member will be entitled to a payment in the amount of the percentage of his or her Individual Net Premium relative to the Total Net Premium.
If you dispute the amount of your Individual Net Premium, you must advise the Settlement Administrator in writing by Sept. 16, 2015 and provide documentation to support your position.
Proof of Purchase
N/A
Claim Form Deadline
N/A. Class Members do not need to submit a Claim Form to receive a payment from the Regions Bank class action settlement.
Case Name
Mahan v. Regions Financial Corp., et al., Case No. 4:14-cv-321-JM, in the U.S. District Court for the Eastern District of Arkansas, Western Division
Final Hearing
10/01/2015
Settlement Website
Claims Administrator
Mahan v. Regions Financial Corp.
Settlement Administrator
PO Box 40007
College Station, TX 77842-4007
888-858-6298
Class Counsel
Peter A. Muhic
KESSLER TOPAZ MELTZER & CHECK LLP
Chris Johnson
NIX PATTERSON & ROACH LLP
Defense Counsel
David B. Esau
CARLTON FIELDS JORDEN BURT
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