If you have a mortgage in Florida and do not have a homeowner's insurance policy or your policy has lapsed, your mortgage lender has the right to purchase an insurance policy and pass the cost along to you. However, certain lenders, including some well-known financial institutions, have been accused of sticking their customers with unnecessarily high premiums for this "force-placed" insurance and getting rewarded by the insurers for purchasing their products.
Many homeowners believe that they have no legal remedies if they end up with one of these policies if the mortgage documentation allows the lender to purchase insurance. However, consumer protection regulations in Florida and other states protect people from fraudulent practices like force-placed policies.
Our firm has helped homeowners fight back against a number of large companies that have abused their right to purchase insurance for borrowers. Our consumer protection attorneys have handled cases against companies such as HSBC, MetLife Home Loans and SunTrust, just to name a few.
There have also been some successful multi-million consumer class action lawsuits over force-placed insurance policies against financial giants like Wells Fargo and JPMorgan Chase. The latter agreed to a $300 million settlement for putting homeowners into insurance policies with Assurant.
Besides buying policies that cost customers as much as 10 times more than they should have to pay to insure their home, there are other methods that lenders sometimes use to profit at their customers' expense. In some cases, they buy a policy for a good deal more than the value of the home. In other cases, they charge the premiums to the escrow account, emptying it or even putting it in the red.
If you have been required to pay insurance premiums on a policy purchased by SunTrust, HSBC or another lender, you may have a case. An attorney can help determine whether you have been the victim of force-placed insurance and if so, help you seek the compensation to which you are entitled.