Bank of America has allegedly engaged in unlawful business practices regarding forced placed flood insurance. It has been alleged that they are forcing homeowners to pay the high-premiums of flood coverage which exceeds the amount required by their mortgage contracts and federal law. According to a class action suit against the banking giant, customers are being subjected to a “bait-and-switch” approach, where they are informed at closing that they must meet certain flood insurance requirements, but are later forced to pay for additional and unnecessary flood insurance.
The High Cost of Forced-Placed Flood Insurance
Bank of America has been accused of forcing property owners to buy excess flood insurance as a requirement for taking out a mortgage loan. Essentially, the bank is allegedly forcing homeowners to purchase or maintain an excessive flood policy, and if they refused, would force-place that coverage on their property, adding the insurance premiums to the borrower’s loan balance. Unfortunately, for homeowners, forced placed insurance can cost up to ten times as much as policies they could have bought themselves. This has reportedly forced some homeowners to struggle with their debt loads, pushing them toward foreclosure. In addition to force-placing excessive and unnecessary flood coverage, Bank of America has also been hit with allegations that they are receiving kickbacks for these purchases.
Was an Excessive Policy Forced Placed on Your Property?
If you took out a mortgage loan from Bank of America or another bank, and were subjected to the practices described above, you may have legal recourse. Speak with an attorney in your area to find out more about your options.