Ocwen, Assurant Force-Placed Insurance Class Action Settlement

Mortgage lender Ocwen Loan Servicing, LLC and insurance giant Assurant Inc. have agreed to a $140 million class action lawsuit settlement over allegations they entered into a force-placed insurance scheme that charged homeowners inflated premiums for hazard, flood, flood-gap, or wind insurance coverage forced on their properties.

An estimated 400,000 Ocwen borrowers nationwide are included in the proposed Ocwen class action settlement, announced in April.

If approved, the settlement will resolve a 2014 class action lawsuit (Lee v. Ocwen Loan Servicing) that accuses Ocwen, Assurant and its subsidiary American Security Insurance Co. (collectively referred to as “Assurant”) of entering into “an extremely lucrative profit-making scheme that reaps hundreds of millions of dollars annually” at the cost of unsuspecting borrowers.

According to plaintiffs, Ocwen and Assurant entered into a collusive agreement that allowed Ocwen to receive unauthorized kickbacks from Assurant in the form of commissions or other payments by using Assurant as its lender-placed insurance provider.

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.

In addition to the illegal kickback allegations, the Ocwen force-placed insurance class action lawsuit alleges that the way in which Ocwen’s policies were obtained and placed caused borrowers to pay inflated rates for excessive coverage.

The Ocwen/Assurant force-placed insurance settlement was preliminarily approved on Dec. 18, 2014. A Final Fairness Hearing is scheduled for June 11, 2015.

Before the hearing, the defendants and plaintiffs must answer several questions raised by objectors about the fairness of the proposed class action settlement.

U.S. Magistrate Judge Jonathan Goodman agreed with the objectors, ruling May 13 that the parties need to disclose how much money Class Members would actually receive from the class action settlement, among other answers, before the Final Hearing. The parties have until May 26 to respond.

Who’s Eligible

Class Members of the Assurant, Ocwen force-placed insurance settlement include:

All borrowers in the United States who, from Jan 1., 2008 through Jan. 23, 2015, were charged by Ocwen under a hazard, flood, flood gap or wind-only LPI Policy for residential property, and who, within the Class Period, either (i) paid to Ocwen the Net Premium1 for that LPI Policy or (ii) did not pay to and still owe Ocwen the Net Premium for that LPI Policy.

Potential Award

Varies. Defendants have agreed to provide a cash award or credit in the amount of 12.5% of the Net Premium charged to the claimant during the Class Period for the LPI Policy by Ocwen.

More information about the actual amount of money you may be eligible to receive from the Ocwen class action settlement may be provided at a later date, but is not available at this time [See above re: Judge Goodman’s orders for more information regarding money for Class Members].

Proof of Purchase

You must provide several pieces of information with your Claim Form in order for it be considered valid, including but not limited to:

• Social Security Number
• Photo ID with signature
• Copy of an Ocwen mortgage statement issued to Claimant(s)
• Completed notary verification

Claim Form

CLICK HERE TO FILE A CLAIM »

Claim Form Deadline

7/22/2016

Claim Forms must be submitted online or mailed to the Settlement Administrator with a postmark no later than 60 days after the Final Settlement Date. This means this deadline may be changed to a later date if there are delays in approving the class action settlement, such as objections.

UPDATE: The Ocwen force-placed insurance class action settlement received final approval on Sept. 14, 2015. Class Members have until Dec. 14, 2015 to file a claim.

UPDATE 2: According to the settlement website, the settlement was appealed.  The appeals were dismissed on May 23, 2016.  Thus, the claim form deadline was changed to July 22, 2016.

Case Name

Jennifer Lee v. OCWEN Loan Servicing LLC, et al, Case No. 0:14-cv-60649, in the U.S. District Court for the Southern District of Florida.

Final Hearing

06/11/15

Settlement Website

www.LeeSettlementInfo.com

Claims Administrator

Lee Settlement Center
c/o Rust Consulting
P.O. Box 2225
Faribault, MN 55021-1625
877-294-6778

Class Counsel

Adam M. Moskowitz
KOZYAK, TROPIN, & THROCKMORTON, P .A.

Aaron S. Podhurst
PODHURST ORSECK, P .A.

Lance A. Harke
HARKE CLASBY & BUSHMAN LLP

Defense Counsel

Counsel for Assurant:
Frank G. Burt
CARLTON FIELDS JORDEN BURT, P.A.

Counsel for Ocwen:
Brian V. Otero
HUNTON & WILLIAMS LLP