J.P. Morgan and Assurant Agree to Settle 'Forced' Insurance Suit

September 10, 2013
Wall Street Journal  
mortgage lending news

JPMorgan Chase and Assurant Inc. have reached a $300 million agreement to settle allegations that they overcharged borrowers for forced-place homeowners' insurance, which banks activate if consumers allow their own coverage to lapse.

The deal, which is subject to court approval, does not include an admission of liability or wrongdoing by JPMorgan; but it does agree to a list of outlawed practices, such as accepting commissions by bank-affiliated agents or brokers and entering into reinsurance pacts with the insurers.

Homeowners who borrowed from JPMorgan since 2008 are eligible for a payout under the settlement, which offers a partial refund or credit in the amount of 12.5 percent of the net premium for each policy covered in the settlement. If all class members file for the refunds, the total cost could top $291 million.

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