Former borrowers of JP Morgan Chase may be eligible to participate in a class action lawsuit challenging the banking giant for its overpriced “force placed” hazard insurance, a federal court ruled. The claim brought against JP Morgan Chase accuses the bank of purchasing forced placed property insurance for customers at a price which far exceeds that of customer bought insurance, but provides substantially less coverage. The additional costs, plaintiffs allege, get paid to JP Morgan and its subsidiaries, which are also named as defendants in the lawsuit, in secret fees and commissions. While most mortgage contracts permit a bank to force place expensive insurance on customers who are uninsured or whose policies have lapsed, they do not authorize a bank to reap hidden financial benefits for itself and its subsidiaries with the excess funds.
If you or a loved one has paid excessive force placed hazard insurance fees to JP Morgan Chase, or any other lender, you may have legal recourse to recover compensation for your damages.
JP Morgan Forced Placed Hazard Insurance Lawsuit
Banks will often require that customers whose policies lapsed carry homeowner’s insurance as financial cushioning for creditors. As such, banks are allowed to “force place” coverage, or purchase coverage on behalf of the customer who must pay for the cost of the policy. The lawsuit against JP Morgan Chase alleges that, in force placing coverage on uninsured customers, the bank overcharged for insurance and paid itself and its insurance companies hidden fees with the excessive premiums. In addition, plaintiffs claim that JP Morgan Chase backdated the forced placed insurance policies to collect duplicate fees or fees for time periods that had already passed. These practices are in violation of RESPA, and put a financial burden on families that may already be struggling to make ends meet, according to allegations.
Forced Placed Hazard Insurance Attorneys
If a borrower’s insurance policy has expired, banks are legally permitted to purchase insurance on the borrower’s behalf. This is known as forced placed insurance. Mortgage contracts often allow banks to charge more for forced placed insurance than they would if a borrower was to purchase on his or her own; however it has been reported that these lender placed policies can cost up to 10 times as the coverage the borrower could have purchased themselves, while providing minimal coverage. At present, JP Morgan Chase and several other large banks are embroiled in forced placed insurance lawsuits, many of which have also been granted class action status. If you have been overcharged for forced placed insurance by JP Morgan Chase, or any other lender, you may be entitled to compensation for your damages.