Front view of insurance agent sitting at his desk with papers and documents ready for his clients to sign them. Focus on a pen. (Gaj Rudolf)
A Miami federal judge on Friday approved a $300 million settlement between JPMorgan Chase & Co. and 1.3 million homeowners nationwide who claimed they were overcharged for forced-place insurance.
The agreement includes another $650 million of injunctive relief through policy changes to end the practice, plaintiffs attorneys have said.
Homeowners alleged Chase placed more than $2.3 billion in insurance coverage during the class period from 2008 to the present.
Chief U.S. District Judge Federico Moreno in Miami approved the settlement. Attorneys say several more settlements are in the works with Bank of America Corp., Citibank and HSBC. Wells Fargo and QBE Insurance Group Ltd. agreed to a $19.3 million settlement to compensate 30,000 borrowers who sued over forced-place insurance.
Under the JPMorgan Chase settlement, the company will pay 12.5 percent refunds to homeowners in the class.
Consumers charged mortgage lenders that received no proof of homeowner insurance imposed policies that were far more expensive than market rates and received hefty commissions from the insurers writing the policies.
Forced-place insurance became a big business in Florida after the housing bubble burst. The state had 31 percent of all forced-place charges in 2011, according to court records.
The plaintiffs are represented by Adam Moskowitz, a partner at Kozyak, Tropin & Throckmorton in Coral Gables; Aaron Podhurst, a partner at Podhurst Orseck in Miami; and Lance Harke, a partner at Harke & Clasby in Miami Shores. Moskowitz said he could not comment on the Chase settlement, but he expects others will be forthcoming.