Many California homeowners have a difficult time making their mortgage payments, even completely missing payments.

Sadly, some lenders such as CitiMortgage, may be taking advantage of struggling homeowners and imposing expensive force-placed insurance premiums in order to protect their asset.

What is Force-Placed Insurance?

Force-placed insurance, also known as lender placed insurance, force-placed hazard insurance, can happen for many different reasons.

Some situations where a lender such as CitiMortgage may force-placed insurance may be after a homeowner’s original policy has lapse due to failure to pay, or when a homeowner fails to purchase coverage for a particular hazard that occurs in their area, like flooding.

Essentially, the purpose of forced-placed insurance is to protect both the homeowner and the lien holder by guaranteeing the home stays insured.

Force-Place Insurance at the Homeowner’s Expense

In 2011, the New York State Department of Financial Services (DFS) conducted an investigation into questionable force-placed insurance practices. Alarmingly, the probe revealed that premiums for force-placed are up to 10 times higher than those charged to people who have voluntary insurance.

Despite the higher premium, force-placed insurance coverage can be substantially limited in many instances and often covers different risks.

CitiMortgage Accused of Improper Force Placed Insurance

Headquartered in St. Louis, Missouri, CitiMortgage is a member of Citigroup and provides mortgage products as part of an expansive portfolio of financial services that includes banking, insurance, asset management, credit cards, and much more.

However, CitiMortgage is being investigated by class action lawyers over potential allegations of improper force-placed insurance practices.

In fact, CitiMortgage is no stranger to allegation of force-placed insurance misconduct, In 2014, CitiMortgage, along with Citibank, settled a nationwide force-placed insurance class action lawsuit for $122 million.

The class action lawsuit alleged that CitiMortgage and Citibank conspired to force certain borrowers to purchase flood insurance in excess of what their mortgage contract and federal law required.

Another example of CitiMortgage’s alleged deceptive force-placed insurance practices is a proposed class action lawsuit filed just a few months ago in October. Plaintiff John M. brought his complaint in California federal court, accusing CitiMortgage, among several defendants, of deceptively charging borrowers for “force placed hazard insurance”.

Force Placed Insurance Class Action Investigation

Prompted by allegations of improper force-placed insurance practices from homeowners like John, attorneys are investigating CitiMortgage’s force-placed insurance practices.

If you are a California homeowner and CitiMortgage force-placed an insurance policy on your home, you may have been treated unfairly.

CitiMortgage may have deceived you when it force-placed insurance at an unreasonable or excessive rate, and you may be eligible to join a force-placed insurance class action lawsuit investigation and seek compensation for the force-placed insurance premiums you were charged.