U.S. District Court Chief Judge Frederico Moreno granted preliminary approval for a force-placed insurance (FPI) lawsuit against J.P. Morgan Chase, and set a final fairness hearing for February 2014. The deal could be worth $300 million to 1.3 million homeowners nationwide and would require the bank to stop accepting commissions for placing FPI from Assurant. J.P. Morgan and Assurant also would be required to make payments to homeowners worth 12.5 percent of the insurance premium each affected homeowner was charged.
The deal would be the first nationwide settlement of allegations that banks and FPI carriers overcharged homeowners for insurance when the homeowners were struggling with their mortgages. Attorneys contend that the Florida settlement could be used as a model for settlements with other defendants.