SunTrust Agrees to Force-Placed Insurance Class Action Settlement

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A nationwide group of borrowers who alleged that they were forced to overpay for premiums have achieved a preliminary settlement of a SunTrust Mortgage force-placed insurance class action lawsuit that could end up with them receiving thousands of dollars.

Force-placed insurance is a legal way for mortgage lenders like SunTrust to ensure that their investments are protected. If a homeowner drops coverage of flood insurance or similar policies or has insufficient homeowners insurance, most lenders include contract language that allows them to buy replacement insurance. However, SunTrust Mortgage allegedly received kickbacks from insurers resulting in excessive costs for homeowners.

Further, the SunTrust class action settlement motion notes that the lead plaintiffs also were required to pay increased amounts as a result of the mortgage company reportedly post-dating coverage that was unnecessary. While the force-placed insurance class action settlement does not require the company to admit wrongdoing, it will pay “10.5% of the net premium amount that SunTrust charged them for lender-placed hazard, flood, or wind insurance, either directly or in the form of a credit to their SunTrust account,” for those who paid for that insurance between April 1, 2008 and the date of preliminary approval for the SunTrust class action settlement.

The percentage is similar to those approved by federal judges in similar class action lawsuits and also includes injunctive relief. For a further six years, SunTrust will receive no money as a result of force-placed insurance policies or engage in similar relationships with insurers and will not use any of its subsidiaries to a similar end.

The SunTrust force-placed insurance class action lawsuit is Carina Hamilton, et al. v. SunTrust Mortgage Inc., Case No. 13-cv-60749, in the U.S. District Court for the Southern District of Florida.

While the mortgage crisis unearthed a number of practices that may have been unethical or illegal, many people may have been looking at the big picture of subprime lenders and missed out on significant issues such as force-placed insurance. It was more difficult because of the lack of publicity regarding these practices.

More information about how to file a claim for the SunTrust class action settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive automatic notifications when this article is updated.

UPDATE: Instructions on how to file a claim for the SunTrust Mortgage force-placed insurance settlement are available! Visit www.SunTrustForcePlacedInsuranceSettlement.com for more information.