Wells Fargo Force-Placed Insurance Class Action Settlement

A class action settlement in the Wells Fargo force-placed insurance class action lawsuit has been reached and Class Members may be eligible for benefits.

The practice of force-placed insurance allows lenders like Wells Fargo to issue an additional insurance policy on a homeowners property to protect the property  still under a mortgage contract. When a lender determines that a homeowner’s current insurance policy has lapsed or does not adequately protect the home from natural disasters— hurricanes, floods, winds, etc.—and other hazards and liabilities, the mortgage lender can legally issue an insurance policy on behalf of the homeowner, who is then responsible for paying the policy’s premium.  While force-placed insurance practices are not illegal, to charge a homeowner more than what it should cost to insure a property for personal gain is strictly prohibited.

Many homeowners participating in the Wells Fargo force-placed insurance class action lawsuit with mortgages provided by Wells Fargo alleged that the bank “artificially inflate borrowers’ premiums with costs well beyond the cost of coverage.” There are additional allegations that Wells Fargo worked in conjunction with insurance companies like Assurant Inc. to increase the cost of the policies paid by homeowners, which then provided kickbacks for Wells Fargo and its affiliates.

In June 2012, lead plaintiff Ira Marc Fladell and participating co-plaintiffs filed a nationwide Wells Fargo force-placed insurance class action lawsuit and brought forth allegations of breach of contract, breach of implied covenant of good faith and fair dealing, unjust enrichment, breach of fiduciary duty, and a number of other violations against lending and mortgage practices. A preliminary settlement was reached by both parties on Feb. 3, 2014.

Wells Fargo denies liability in the force-placed insurance allegations, but settled the class action lawsuit to avoid the uncertainties of continued court proceeds and legal expenses.

Who’s Eligible

You are a Class Member of the Wells Fargo class action settlement if you are a borrower in the United States and were overcharged by Wells Fargo for a hazard, flood, flood-gap or wind LPI Policy during the Class Period. This applies to Class Members who did and did not pay the LPI Policy net premium.

The Class Period varies based on the state in which your property is located.

The commencement date for the Class Period for each participating state is as follows:

(i) California: Oct. 7, 2007.
(ii) Florida: Sept. 2, 2006.
(iii) Illinois: July 5, 2002.
(iv) Indiana: June 15, 2002.
(v) Louisiana: Feb. 19, 2003.
(vi) New Jersey: April 2, 2007.
(vii) New York: July 5, 2006.
(viii) Ohio: Aug. 8, 1998.
(ix) Pennsylvania: April 7, 2005.
(x) Texas: Oct, 7, 2007.
(xi) All other states: Jan. 1, 2008.

The end for all states Class Periods is March 17, 2014.

Potential Award

Varies.

• Class Members who had a LIP Policy charge occur on or before March 24, 2012, will receive a cash or credit award of 11% of the net premium of the policy.
• Class Members who had a LIP Policy charge occur after March 24, 2012, will receive 7% of the Net premium.

Proof of Purchase

To receive compensation from the Wells Fargo force-placed insurance class action settlement, Class Members must submit a completed Claim Form by mail postmarked no later than 60 days after the Final Settlement Hearing, and include all the necessary verification information. Class Members may alternatively upload a complete Claim Form to the settlement website with all the necessary verification no later than 60 days after the Final Settlement Hearing on Dec. 17, 2014.

Claim Form

Claim Form Deadline

12/14/14 (ESTIMATED). Claims must be submitted no later than 60 days after the Final Settlement Date. This will occur only after the class action settlement is approved and all appeals, if any, are resolved.

Case Name

Fladell, et al. v. Wells Fargo Bank NA, et al., Case No. 0:13-cv-60721, in the U.S. District Court for the Southern District of Florida.

Final Hearing

09/18/2014

Settlement Website

www.WellsFargoForcePlacedInsuranceSettlement.com

Claims Administrator

Fladell Settlement
c/o GCG
PO Box 10062
Dublin, Ohio 43017-6662
1-866-847-5874

Class Counsel

Adam M. Moskowitz
Harley S. Tropin
KOZYAK, TROPIN, & THROCKMORTON, P.A.

Aaron S. Podhurst
Peter Prieto
PODHURST ORSECK, P.A.

Lance A. Harke
Howard M. Bushman, Esq.
HARKE CLASBY & BUSHMAN LLP

Defense Counsel

Michael J. Steiner
SEVERSON & WERSON

 UPDATE: The Wells Fargo force-placed insurance class action settlement received final approval on Oct. 29, 2014.