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Class Members who are part of $54 million Nationstar Mortgage LLC force-placed insurance class action settlement have asked a Florida federal judge to grant final approval to the deal.
In the motion for final approval of the class action settlement filed Monday, the plaintiffs saidthe process has produced “an extraordinary result,” with only two objections and 26 Class Members who have chosen to opt-out.
The force-placed insurance class action settlement provides “meaningful monetary relief to the 380,404-member settlement class and put an end to the controversial force-placed insurance practices that are the subject of this lawsuit for Nationstar borrowers nationwide.”
The Nationstar class action settlement is for Class Members who had mortgages with Nationstar and were charged for overpriced hazard, flood or wind insurance coverage through a policy from Assurant Inc. or one of its subsidiaries between Jan. 1, 2008 and Jan. 30, 2015.
As part of the force-placed class action settlement, Nationstar is not allowed to charge inflated prices for force-placed insurance for five years. In addition, Nationstar is no longer allowed to receive “commission payments” to the mortgage company “that totaled tens of millions of dollars during the class period.”
The plaintiffs explained that the class action settlement is also been “all the more extraordinary because it involved the resolution of complex issues against a rising tide of adverse decisions from federal district and appellate courts — decisions class counsel would certainly distinguish, but their opponents would just as vigorously assert.”
The attorneys’ representing the class are asking the Florida federal court to approve $5 million in fees and expenses, which they say was the amount “negotiated only after all the class benefits had been secured under the direct supervision of a nationally recognized mediator,” adding that that amount is only 9.26 percent of the class action settlement.
In February 2013, the Seventh Circuit Court of Appeals upheld a decision to dismiss a force-placed insurance class action lawsuit against Wachovia Mortgage FSB in which there were kickbacks paid to the bank by the insurance company because the class action lawsuit failed to state a viable claim for relief.
Another force-placed insurance class action lawsuit was rejected by the Eleventh Circuit Court of Appeals in February 2014 against Wells Fargo Bank NA, saying that the flood insurance the plaintiff was forced to pay was a minimum.
The various force-placed class action lawsuits became common due to a practice by banks, which require their borrowers to keep hazard insurance as a protection for their properties. If the borrower fails to pay on that insurance for whatever reason, the bank imposes its own insurance policy on the property, called force-placed insurance.
While the practice itself is not illegal, borrowers objected to an agreement that Nationstar, and other banks, had with Assurant and other insurance companies to inflate the cost of the insurance premiums so that the banks could receive a kickback from the premium that was charged to the borrower.
Other force-placed insurance class action settlements have also been reached with JPMorgan Chase NA, HSBC USA NA, Citibank NA and Wells Fargo NA. Bank of America also settled a force-placed insurance class action lawsuit for $228 million in April 2014.
A Florida federal judge granted preliminary approval of the Nationstar class action settlement on Jan. 30, 2015.
The class is represented by Adam M. Moskowitz, Tucker Ronzetti, Rachel Sullivan and Robert J. Neary of Kozyak Tropin & Throckmorton LLP, Lance A. Harke, Sarah Engel and Howard M. Bushman of Harke Clasby & Bushman LLP, and Aaron S. Podhurst, Peter Prieto, John Gravante III and Matthew Weinshall of Podhurst Orseck PA.
Nationstar is represented by Alan G. Greer and Nathaniel M. Edenfield of Richman Greer PA, and John B. Sullivan, Mark D. Lonergan, Erik Kemp and Megan C. Kelly of Severson & Werson PC. Assurant and other defendants are represented by Frank G. Burt of Carlton Fields Jorden Burt PA.
The Nationstar Force-Placed Insurance Class Action Lawsuit is Howard Braynen et al. v. Nationstar Mortgage LLC et al., Case No. 1:14-cv-20726, in the U.S. District Court for the Southern District of Florida.
UPDATE: Claim filing instructions for the Nationstar force-placed insurance class action settlement are now available! Click here or visit www.BraynenSettlementInfo.com for details.
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2 thoughts onPlaintiffs Ask for Final Approval of Nationstar Force-Placed Class Action Settlement
UPDATE: Claim filing instructions for the Nationstar force-placed insurance class action settlement are now available! Click here or visit http://www.BraynenSettlementInfo.com for details.
I just wanted to say that I I was I had no idea that I needed to have any kind of insurance they had told me nothing about that this, I needed anything , I just found out recently that I needed for insurance but all the time I didn’t need flood insurance, I was forced to get to insurance I had no idea that I would need it I thought I did that was shocked to hear otherwise at the end of three months ago that I needed it that I do need to have it for my family next-door found that out when they got nation star