U.S. Bank Force-Placed Insurance Class Action Lawsuit Is Certified

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A force-placed insurance class action lawsuit filed against U.S. Bank received Class certification approval by California federal Judge Laurel Beeler. The force-placed insurance lawsuit alleged that U.S. Bank had illegally imposed flood insurance on mortgage holders. Class certification was awarded on June 13, 2014 and includes borrowers from more than 40 states that have filed force-placed insurance lawsuits against U.S. Bank.

In the certification order, the court approved the group of force-placed insurance lawsuits to go across multiple states because each of the plaintiffs had accused U.S. Bank for imposing force-placed insurance on them. The U.S. Bank customers also allege bad faith financial practices, and claimed the bank breached their mortgage agreements by using this kind of insurance.

Additionally, the court separately certified a Class of borrowers in California and New Mexico who are also suing U.S. Bank for force-placed insurance practices and its insurance vendor, American Security Insurance Company (ASIC), for unjust enrichment, unfair business practices, and breach of the covenant of good faith or fair dealing.

All of the plaintiffs involved allege that U.S. Bank and ASIC developed a scheme where the defendant company would receive kickback funds and other forms of compensation from ASIC in exchange for force-placing insurance from ASIC onto the homeowners.  This system was designed to automatically profit from borrowers, in which charges from the insurance company had allegedly been placed into the insurance plans ahead of time.

Furthermore, the force-placed insurance coverage was significantly backdated, charging the plaintiffs long after the policy had expired, and pre-dated any notice to the bowers that their insurance had lapsed. As a result, U.S. Bank and ASIC reportedly reaped massive financial benefits from the force-placed flood insurance while the homeowners had to pay grossly inflated amounts for an insurance plan that provided no benefit to them.

Beeler cited the evidence she analyzed from each force-placed insurance lawsuit and stated that she found nothing from the data to suggest that the defendant had used fair practices.

Overview of Force-Placed Insurance

It is general practice for homeowners to pay mortgage and additional hazard insurance policies to maintain the value of the property, as required by lenders. However, when the insurance policy is cancelled or lapsed, force-placed insurance is often brought on by banks to protect their own financial interest in the property. Although force-placed insurance itself is not unlawful, legal experts have noticed it has become commonplace in the mortgage industry for banks to partner with insurance companies that charge homeowners premiums for their force-placed insurance policies.

With this alliance, widespread abuse has been discovered against homeowners, including policies that prevent homeowners from switching to competitors. These abuses have led to accusations of financial exploitation, bad faith insurance practices, and breach of contract. In some cases, homeowners have reported paying more for the force-placed insurance policy, than they would have if they had purchased the policy on the open market.

The Force-Placed Insurance Class Action Lawsuit is Ellsworth v. U.S. Bank, Case No. 3:12-cv-02506-LB, in the U.S. District Court of Northern California.

Force-Placed Insurance Class Action Lawsuits

There are dozens of force-placed insurance class action lawsuits being litigated across the country. Notable lenders that have allegedly overcharged for forcedplaced insurance or illegally placed a hazard insurance plan when an individual already adequately insured their home include:

• Wells Fargo
• JP Morgan Chase
• HSBC
• Citibank
• Ally Financial
• Fifth Third Bank
• BB&T Mortgage
• Cenlar FSB
• PHH Mortgage
• OneWest Bank
• MetLife Home Loan

Join a Free Force-Placed Insurance Class Action Lawsuit Investigation

If you paid for force-placed insurance from a lender, you may be eligible to join a free class action lawsuit investigation into the improper charges you may have paid. Some of the banks being investigated include Ally Financial, PHH Mortgage, OneWest Bank, MetLife Home Loan, BB&T Mortgage, Cenlar FSB, and Fifth Third Bank. Submit your information now for a free and confidential case evaluation to see if you qualify at the Home Force-Placed Insurance Class Action Lawsuit Investigation.

UPDATE: A California federal judge has granted preliminary approval for a $500,000 class action settlement to resolve this U.S. Bank Force-Placed Class Action Lawsuit.