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Wells Fargo Bank NA and Assurant Inc. have agreed to settle a class action lawsuit over the companies’ force-placed insurance practices, less than a week after a Florida federal judge approved a $300 million class action settlement over JPMorgan Chase NA’s similar practices.
“The parties to this action have negotiated an extraordinary settlement that provides significant monetary relief to Wells Fargo mortgagors nationwide who had insurance coverage ‘force-placed’ on their properties by [Wells Fargo], as well as injunctive relief that would effectively end the lender-placed insurance (LPI) practices at issue here,” the plaintiffs wrote in their motion for preliminary approval of the Wells Fargo class action settlement.
LPI is utilized by banks when homeowners fail to purchase or maintain property insurance. The banks can “force-place” an insurance policy to ensure the property has adequate insurance coverage. However, many homeowners have argued that the banks force-place insurance policies that are overpriced. They also complain that the banks often get kickbacks from these force-placed insurance policies.
The plaintiffs in the Wells Fargo force-placed insurance class action lawsuit did not dispute the bank’s contractual right to force-place insurance policies when a homeowner’s policy lapsed. What they took issue with was the alleged relationship with Assurant that allowed Wells Fargo to “artificially inflate borrowers’ premiums with costs well beyond the cost of coverage.” Some of the costs were allegedly used to provide kickbacks to Wells Fargo affiliates.
Plaintiff Ira Marc Fladell initially filed the Wells Fargo class action lawsuit in June 2012. Following a court order, the parties participated in formal mediation beginning in November 2013. The class action settlement was reached on Feb. 3, 2014.
Under the terms of the Wells Fargo force-placed insurance settlement, the defendants have agreed to repay homeowners up to 11 percent of the premiums they paid. The proposed Settlement Class includes all borrowers in the United States who were charged by Wells Fargo under a hazard, flood, flood gap or wind-only LPI policy for residential policy since at least Jan. 1, 2008. The Class Period may be longer for homeowners with properties in California, Florida, Illinois, Indiana, Louisiana, New Jersey, New York, Ohio, Pennsylvania or Texas.
The class action settlement enjoins Wells Fargo and Assurant from continuing to inflate the costs of force-placed insurance for five years, and requires Wells Fargo to establish hazard LPI at the last known coverage amount and ensure that the coverage is related to the value of the interest being protected.
Last month, Citigroup Inc. agreed to pay $110 million to settle a similar force-placed insurance class action lawsuit.
The plaintiffs are represented by Adam M. Moskowitz, Harley S. Tropin, Tucker Ronzetti, Rachel Sullivan and Robert J. Neary of Kozyak Tropin & Throckmorton PA; Aaron S. Podhurst and Peter Prieto of Podhurst Orseck PA and Lance A. Harke, Sarah Engel and Howard M. Bushman of Hark Clasby & Bushman LLP.
The Wells Fargo Force-Placed Insurance Class Action Lawsuit is Fladell, et al. v. Wells Fargo Bank NA, et al., Case No. 0:13-cv-60721, in the U.S. District Court for the Southern District of Florida.
UPDATE: Instructions on how to file a claim for the Wells Fargo force-placed insurance settlement are available! Click here or visit www.FladellSettlementInfo.com for more information.
UPDATE 2: The Wells Fargo force-placed insurance class action settlement received final approval on Oct. 29, 2014.
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48 thoughts onWells Fargo Agrees to Force-Placed Insurance Class Action Settlement
I too l had my house thru Wells Fargo, and it was foreclosed on, but before it was closed on, i was charged for the insurance, how do i know if i had paid it in one lump sum, or was i billed for it. I don’t want to circle the wrong answer.\, help me please, i had left some messages, but no one has called me back, please respond thru email, thanks cynthia fulton
I lost my house, but how do I know if I’m included in this settlement? We received 5 of these settlement letters.
I recycled the claim forms thinking that I had gotten rid of the insurance documents a while ago, but I found the documents today to prove that Wells Fargo did charge us for insurance we did not need.
I received 17 claim forms and I haven’t been able to find out If I need to fill out all 17 claim forms,Because each one has a different claim number. I don’t know if I need to fill out Section 1-Witness Verification. And also
Option 4-Notary Verification. I call the Fladell Settllement Info.number and just receive an automated
phone directory which is no help. If you can help with my problem, I would greatfully appreciate your help.
E-mailing your response would be prefered.
Thank You,
Jesus Vasquez
Jesus, a usted le ayudo Brookstone, mi esposo y yo pagamos poco mas de $10,000.00 dolares y hasta hoy no hemos recibido noticias, el ano pasado dijeron que nos iban a quitar la Linea de Creidto que es tambien de Wells Fargo y dimos un deposito de $1,500.00 D. y no nos han ayudado a nada, ahora tenemos problema con el banco por el atraso de la linea de credito. Ojala puedas contactarme para discutir esto y saber si estubiste con Brookstone.Rosario Ramirez
not sure if im on the list for the class action lawsuit on wells fargo
I received 2 class action claim forms for Wells Fargo…I have been in my home since 2001. I do recall in past years Wells Fargo sending me a notice that I had insufficient coverage for my home ..I needed to be covered for the replacement cost of my home 216,000.00. I notified my insurance co. we adjusted the amt of insurance carried.(The amount taken for my home mtg was only 45,000.00) Then I was notified that what ever the amt of insurance I carried on my home I also needed to carry that amt in FLOOD insurance also . When I notified my insurance agency of this, they told me not according to the flood zone I was in. I know I was charged for a couple of years by Wells Fargo for an extra ” Flood Gap insurance out of my escrow acct for this shortage” I pay 1,212.00 in flood insurance every year…PLEASE CONTACT ME VIA E-MAIL , I NEED SOME ANSWERS
THANK YOU
Wells Fargo foreclosed on my home and then I filed bankruptcy in 2013. Does this exclude me from the lawsuit?
insurance lapsed and I had to pay wells forgo for home owners insurance/they made me pay extra in my payments. Thanks James D. Moses
Neither me or my daughter recvd a letter about this.How do we sign up to be part of this law suit
Please e-mail me the information or mail it to my address;
208 Salisbury I
West Palm Beach,Fl 33417
On several occasions I was in formed by Wells Fargo that insurance was being provided on my home be cause I let the policy lapse. However , the policy was paid but Wells Fargo did not inquire about the policy . It was left to me to call the insurance company to have them contact Wells Fargo to update their records. I have received three letters on this subject and am not sure if would qualify for this settlement. Would someone contact me would suggestions.