Berger & Montague filed a
class action complaint in the United States District Court for
the District of Oregon alleging that Bank of America requires
certain borrowers to purchase flood insurance in excess of what
their mortgage contract and federal law requires.
On September 18, 2014, the Court granted final approval of the
settlement in this matter. The following documents are
available for download:
For more information, please visit www.FloodInsuranceSettlementBANA.com.
Force-Placed Flood Insurance
When a lender originates or services a home equity or mortgage
loan for customers who pledge their home or condominium unit
located in a "Special Flood Hazard Area" as collateral, federal law
requires proof of adequate flood insurance as a condition of
obtaining the loan.
Subsequent to closing, Bank of America sent some customers form
notices informing them that their flood insurance was inadequate
under federal law and/or the mortgage contract. Bank of America
required that these customers purchase flood insurance that
exceeded the bank's security interest in the home or,
alternatively, exceeded the replacement cost of the home. Bank of
America misrepresented that the flood insurance requirement was in
line with federal laws for homeowners in "Special Flood Hazard
Areas." Bank of America then continued to send a series of letters
asking for more information and explaining Bank of America's
intention to force-place flood insurance.
Ultimately, Bank of America purchased the flood insurance policy
at a high premium and assessed the premium costs on the homeowner.
The cost of the policy was either deducted from the home equity
account or added to the mortgage balance. As a result, the
customers had no choice but to pay the premiums.
Force-Placed Flood Insurance Class Action
Berger & Montague's force-placed insurance group vigorously
represents homeowners against major banks. To find out about
investigations, as well as both pending and settled cases, please
force-placed insurance case page.