Monday, April 10, 2017

Bankster, Three Insurers Deny Screwing Over Homeowners In Foreclosure With Force Placed Insurance, But Agree To $20+ Million Settlement To Resolve Allegations Of Wrongdoing Claimed In Class Action Lawsuit

In Camden, New Jersey, the Courier Post reports:
  • PHH Mortgage Corp. and three insurers would pay more than $20 million under a proposed settlement of a class-action lawsuit brought by customers of the home-loan firm.

    The payment, which has received preliminary approval from a federal judge in Camden, would resolve claims that some PHH borrowers were required to pay excessive costs for "lender-placed insurance" on their homes.

    According to the proposed settlement, an alleged kickback scheme between PHH and its insurers targeted "some of the most vulnerable members of the housing market," including people "struggling to protect their homes from foreclosure."

    PHH denies any wrongdoing and asserted its "lender-placed insurance practices are proper and structured in compliance with all applicable laws."

    The company said it agreed to the proposed settlement "in order to avoid the distraction and expense of litigation.”

    The pending agreement notes the dispute "has been vigorously contested for several years." The agreement would resolve three class-action lawsuits that have been filed since 2012 in federal court, Camden.

    The suits also name three insurance firms as defendants – American Security Insurance, Standard Guaranty Insurance and Voyager Indemnity Insurance.

    Under the settlement, PHH and the insurers would provide more than $18 million in "monetary relief" for PHH customers, as well as up to $4.2 million for the plaintiffs' legal costs. The settlement also calls for "meaningful injunctive relief" that would bar the practices alleged in the lawsuits.

    The settlement covers an unspecified number of PHH borrowers who were charged between Jan. 1, 2006, and July 31, 2015 for "a hazard, flood, flood gap or wind-only (lender-placed insurance) policy."

    Customers would get from 6 percent to 11.5 percent of the net premium on the disputed policies.

    Among other points, the pending agreement notes PHH denies overcharging customers and contends it was entitled to obtain the insurance "on behalf of borrowers who refuse to maintain the coverages required under the mortgage."

    U.S. District Judge Noel Hillman granted preliminary approval at a Feb. 28 hearing. He is to hold a hearing on final settlement approval on July 27.

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