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Bank of AmericaA class action lawsuit filed Thursday claims Bank of America Corp. conspired with insurance company QBE Holdings Inc. and various affiliates to inflate premiums for mortgage holders by instituting force-placed hazard insurance on their policies. This force-placed insurance was sometimes up to 10 times more expensive than policies purchased voluntarily, despite providing far less protection, according to the class action lawsuit.

Lead plaintiff Colleen DeCambaliza accuses the defendants – which include Banc of America Insurance Services Inc. and Balboa Insurance Co. – of violating the federal RICO Act and a Wisconsin state organized crime control law by scheming to force-place hazard insurance policies on mortgage borrowers with “unreasonably high-priced” premiums.

The class action lawsuit describes “force-placed insurance” as a policy imposed by lenders or mortgage service providers when borrowers don’t maintain adequate insurance coverage to meet the terms of their mortgage contracts.

DeCambaliza alleges in the class action lawsuit that a portion of the excessive premiums charged by QBE were given to Bank of America as “kickbacks” in the form of fees, commission and rebates.

“This scheme and the related kickbacks and payoffs resulted in premiums charged to homeowners for force-placed insurance that were two to 10 times higher than premiums for voluntary insurance, despite the fact that the force-placed insurance coverage often provides far less protection than voluntary insurance,” the class action lawsuit states.

DeCambaliza filed the class action lawsuit about a week after New York Governor Andrew Cuomo announced a $10 million settlement reached with QBE to end a state regulator investigation into claims that the company improperly inflated premiums. Under the agreement, QBE also agreed to stop paying commissions to banks, lower its premiums and repay homeowners.

QBE – which is the second-largest provider of force-placed insurance in the U.S. – maintains that its practices are not illegal.

DeCambaliza is seeking restitution for Bank of America mortgage holders affected by the alleged scheme for claims of unjust enrichment, breach of contract and RICO violations.

The QBE, Bank of America Force-Placed Insurance Class Action Lawsuit case is DeCambaliza v. QBE Holdings Inc. et al., Case No. 13-cv-00286, U.S. District Court for the Western District of Wisconsin.

The plaintiffs are represented by Charles J. Crueger and Erin K. Dickinson of Hansen Reynolds Dickinson Crueger LLC, Edward A. Wallace and Kara A. Elgersma of Wexler Wallace LLP, and by Gregory F. Coleman and Mark Silvey of Greg Coleman Law PC.

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6 thoughts onQBE, Bank of America Force-Placed Insurance Class Action Lawsuit

  1. Jeff says:

    Take a deep breath and be patient it took me nearly 6 1/2 months to get claim closed. I will gladly help you if still needed.

    Also I have been in this force placed insurance crap since 2011 and I’m just now able to find insurance. My rate went from 700.00 a year to 2250.00 a year. After I was made aware of my new insurance I searched for new insurance and everyone else quoted me nearly the same price so I did the best I could to make the mortgage payment. All the while BOA kept stating that this was me and my insurances fault. If you were like me you have to work, no one has time to call BOA and beg them to do the right thing. No to mention BOA taking three years and 5 Notaries to complete my HAMP Modification and badgering me not go threw with the HAMP and just refinance on my own. So now I’m in more debt than before the MOD and the insurance scam. This bank should be shutdown, they are the THUGS of the banking industry. And Yes I need an Attorney.

    Jeff

  2. George says:

    Has anyone filed a claim for roof damage, if so, what was the outcome?

    I am wanting to file one, just not sure how to.

    1. Jerrah Herrera says:

      Hi, did you ever file? What happened if so, I have and they are refusing to pay.

  3. Brian Penny says:

    I’m the Bank of America whistleblower who wrote this piece and several more regarding force-placed insurance:
    http://www.mainstreet.com/article/real-estate/how-force-placed-insurance-leads-foreclosure

    I’m registered with Thompson Reuters expert witness network. Please contact me if you’d like expert assistance with your case.

  4. Got check please says:

    BOA did the same to me at raised my mortgage payment 500.00 a month for insurance that was substandard///////

  5. Dorothy says:

    send a claim form.

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