Citibank Force-Placed Insurance Class Action Settlement

Citibank NA has agreed to settle class action lawsuits alleging Citibank and CitiMortgage Inc. (collectively, “Citi”) violated the legal rights of borrowers by unlawfully forcing borrowers to carry excessive flood or hazard insurance. Under the terms of the proposed $110 million Citibank class action settlement, eligible Class Members will receive refunds for the force-placed insurance premiums charged by Citi.

The proposed Citibank class action settlement will resolve two class action lawsuits filed over Citi’s force-placed insurance practices. One of the class action lawsuits alleges that Citi violated the legal rights of borrowers who reside in flood zones by unlawfully forcing them to carry excessive flood insurance coverage for their property and by improperly profiting from the force-placement of flood insurance. The second class action lawsuit alleges Citi violated borrowers’ legal rights by improperly profiting from the force-placement of hazard insurance through Assurant Inc., American Security Insurance Company and Standard Guaranty Insurance Company (collectively, “Assurant”), which paid allegedly unlawful commissions to Citi.

Both Citi and Assurant deny they acted unlawfully but have agreed to settle the force-placed insurance class action lawsuits to resolve these allegations.

Who’s Eligible

The proposed Citibank force-placed insurance settlement includes two classes: the Flood Settlement Class and the Hazard/Wind Settlement Class.

The Flood Settlement Class includes all persons who were charged by Citi for lender-placed flood insurance (unless such charge was flat cancelled and refunded in full) in connection with a mortgage loan, home equity loan or home equity line of credit secured by property in the United States from May 17, 2006 through April 2, 2014.

The Hazard/Wind Settlement Class includes all persons who were charged by Citi for lender-placed hazard/wind insurance (unless such charge was flat cancelled and refunded in full) in connection with a mortgage loan, home equity loan or home equity line of credit secured by property in the United States from Jan. 1, 2007 through April 2, 2014. Under the terms of the proposed class action settlement, “hazard insurance” refers to insurance against any type of hazards, except floods.

Potential Award

Under the terms of the proposed force-placed insurance settlement, Citi has agreed to pay each Flood Settlement Class Member who submits a timely claim a payment equal to 8 percent of the net amount of premiums that Citi charged for all lender-placed flood insurance placements from May 17, 2006 through April 2, 2014.

Citi has agreed to pay each Hazard Settlement Class Member who submits a timely claim a payment equal to 12.5 percent of the net amount of premiums that Citi charged for all lender-placed hazard insurance placements from Jan. 1, 2007 through April 2, 2014, except that stand-alone windstorm insurance placements shall be reimbursed at a rate of 8 percent.

Proof of Purchase

N/A

Claim Form

Claim Form Deadline

01/21/2015

Case Name

Gordon Casey, et al. v. Citibank NA, et al., Case No. 5:12-cv-00820 and Celeste Coonan v. Citibank NA, et al., Case No. 1:13-cv-00353, both in the U.S. District Court for the Northern District of New York

Final Hearing

8/1/2014

Settlement Website

www.CMIMortgageInsuranceSettlement.com

Claims Administrator

CitiMortgage Claims Administrator
P.O. Box 43262
Providence, RI 02940-3262

Phone: 1-877-346-5223
Fax: 1-866-406-0445

admin@CMIMortgageInsuranceSettlement.com

Class Counsel

Shanon J. Carson
BERGER & MONTAGUE PC

Kai Richter
NICHOLS KASTER PLLP

Defense Counsel

Christopher J. Willis
BALLARD SPAHR LLP

Frank Burt
CARLTON FIELDS JORDEN BURT

UPDATE 1: The Citibank force-placed insurance class action settlement was granted final approval on Aug. 21, 2014. Claims will not be paid until all appeals, if any, are resolved. According to the Settlement Administrator:

The date of disbursement to class members who submit approved Claim Forms has not yet been determined. This date will depend on a number of factors, including if any appeals are filed which can take time to resolve. This website will be updated with any new information regarding the disbursement. Please check back at a later date.

If you receive a payment, let us know in the comments section below!

UPDATE 2: The Settlement Administrator has posted the following update to the settlement site: 

The date of disbursement to class members who submit approved Claim Forms will be in late March 2015. The date of disbursement to class members who submitted a previously deficient claim that has been cured will be in late April 2015.

UPDATE 3: Payments for the Citibank force-placed insurance class action settlement were mailed March 20, 2015. A second round of payments will go out April 20. Learn more.