Bank of America Settles Forced-Place Insurance Claims for $228M

By and Susannah Nesmith | April 6, 2014

Bank of America Corp. agreed to pay $228 million to settle claims the bank overcharged for insurance homeowners were forced to accept when their regular policies lapsed.

The amount was disclosed in a document requesting approval for the accord filed yesterday in Miami federal court. Lawyers for homeowners told a federal judge in February that the Charlotte, North Carolina-based bank had agreed to a deal without providing further information.

Wells Fargo & Co., HSBC Holdings Plc, JPMorgan Chase & Co. and Citigroup Inc. have also agreed to similar accords in cases alleging that banks got a financial windfall by cutting deals with insurance companies and over-charging borrowers for property coverage.

The deal is an “extraordinary settlement” that provides “prospective relief that would effectively end the lender- placed insurance practices at issue in this case,” lawyers for plaintiffs said in the Bank of America case.

Attorneys will seek as much as $16 million in fees, according to the filing.

As part of their settlements, JPMorgan will pay $300 million and Citigroup will pay $110 million. HSBC agreed to pay $32 million, according to a separate proposed settlement. The amount of Wells Fargo’s settlement hasn’t yet been specified.

Lawrence Grayson, a spokesman for Bank of America, declined to comment on the settlement’s amount.

The case is Hall v. Bank of America N.A., 1:12-cv-22700, U.S. District Court, Southern District of Florida (Miami).

Latest Comments

  • November 1, 2014 at 3:00 pm
    kathy says:
    Try living in florida with a 45 year old home and getting home owners insurance.Until you know what you're up against, don't make judgement statements
  • June 27, 2014 at 11:39 am
    Kevin Mcguire says:
    Oooh! One misspelled word and you cast the entire argument to be false. Yeah, that’s compelling. And is my capitalization of the word KICKBACK further deem my position less ... read more
  • June 25, 2014 at 9:38 pm
    renoscs says:
    It's reinsurance, not re-insurance!! It's obvious you don't understand the insurance business if you can't even spell this simple word correctly!!!!
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