Inspector General Recommends Force-Placed Insurance Lawsuits

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Many homeowners are finding out that force placed insurance may have cost them hundreds, if not thousands, of dollars unnecessarily. However, they are not the only ones affected by the practice. The Inspector General for a federal agency is recommending Fannie Mae and Freddie Mac file force-placed insurance lawsuits over exorbitant fees.

The Office of Inspector General for the Federal Housing Finance Agency argues that the two mortgage backers may have lost as much as $150 million in 2012 alone. Due to the number of mortgages the two public private corporations service, that’s not surprising.

Force-placed insurance is not illegal. Lenders use it in order to protect their investment as homeowners continue to pay off their mortgage. The companies buy insurance policies, and charge the homeowners, when coverage is deemed insufficient to protect against fire, flood and other issues. The policies often involve consumers paying rates far beyond market prices.

Some companies including Fifth Third Bank have been the subject to force-placed insurance class action lawsuits, with plaintiffs alleging that they entered into so-called kickback agreements with insurance companies as well as buying policy coverage after the period has already passed. Many financial services firms have settled for tens of millions of dollars.

Even those great results might not match any result achieved by Freddie Mac and Fannie Mae, however. Due to the number of mortgages they handle, prospective force-placed insurance lawsuits could be resolved with settlements in the hundreds of millions of dollars.

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 Third Bank.

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