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A federal class action lawsuit claims Wells Fargo Bank (WFC) forces borrowers to take out too much flood insurance on their homes in order to pocket commissions and kickbacks.
According to the Wells Fargo class action lawsuit:
“[Wells Fargo] unfairly, unjustly, and unlawfully forced Plaintiff and other borrowers to purchase and maintain flood insurance for their property in amounts greater than required by law, greater than required by their mortgage agreements, and greater than Defendants’ financial interest in their property, without any reasonable basis or justification.”
Furthermore, the class action continues, “[Wells Fargo] unfairly, unjustly, and unlawfully profited from force-placing flood insurance on Plaintiff’s property and the property of other borrowers, by charging Plaintiff and other borrowers amounts in excess of the net costs incurred by Defendants for such flood insurance and by accepting kickbacks, commissions, or other compensation for themselves and their affiliates in connection with force-placed (also known as lender-placed) flood insurance.”
The Wells Fargo flood insurance class action lawsuit is brought on behalf of the following classes:
Nationwide Flood Insurance Class. All persons nationwide who have or had a home loan or line of credit with Wells Fargo and were required by Wells Fargo or its agents or affiliates to purchase or maintain flood insurance on their property in the United States.
Nationwide Lender-Placed Insurance Class. All persons who were charged for lender-placed flood insurance by Defendants and/or paid such charges to Defendants, in whole or in part, within the applicable limitations period.
Pennsylvania Putative Class. All persons who have or had a loan or line of credit with Defendants secured by their residential property and were required by Defendants to purchase or maintain flood insurance on their property in the State of Pennsylvania within the past six years.
A copy of the Wells Fargo Flood Insurance Class Action Lawsuit can be read here.
Updated April 12th, 2011
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14 thoughts onWells Fargo Flood Insurance Class Action Lawsuit
I have been fighting Wells for over 2 yrs. , which started with flood ins., then forced flood ins.. Now they have a lien on my house. All started with flood insn
Like everyone on here Wells Fargo has required that we carry twice as much insurance on our house because we have a creek that runs thru a small portion of our property. We have always had coverage of more than what we owe on our house and my agent would call then and tell them so, then 2 or 3 months later my payment would go up again because that would apply more insurance even though we had more coverage than was needed. This has been going on for some 10 years now, I have now asked the county we live in to come out and review our flood zone because it has not been done in over 60 years. Wells Fargo is just a ripoff mortgage bank that I will never do business again with.
I am confused. Wells Fargo just threw on flood insurance on me after 2 years of living here and now my escrow went negative and my payments jumped almost $400 a month.
YOU need to be pushing your agent as well to touch base not just with FEMA but Wells Fargo Insurance Compliance dept. I am a flood agent and I will not allow the mortgage companies to try and increase my clients’ coverage for flood. Flood coverage is separate from Hazard insurance and is not regulated to be covered the same way. Flood insurance does not have to cover the property at 100% replacement cost. It only has to be required to cover the property at the outstanding loan balance. Covering for more is at the discretion of you, the insured. Make your agent work for you that is why they are getting a commission .