The NFIA preempts all state causes of action, so the allegations in the Plaintiffs’ lawsuit do not involve the NFIA. Furthermore, the Plaintiffs’ claims relate only tangentially to the lender’s obligations under the NFIA, such as notifying borrowers that their property is in a flood zone. Moreover, the NFIA requires lenders to notify borrowers when their property becomes a flood zone, but not when it is no longer a flood zone.
Bank of America settles class action lawsuit
In a recent court filing, Bank of America has settled a putative class action lawsuit brought by plaintiffs who were forced into force-placed flood insurance. The settlement involves several changes to the bank’s insurance practices, including stopping the payment of commissions on force-placed flood insurance policies for three years, not taking commissions from force-placed flood insurance policies in future mailings, and refunding co-op borrowers who were forced into force-placed insurance policies. Additionally, the settlement includes a substantial amount of money to cover the attorneys’ fees.
The Bank of America class action settlement covers mortgage borrowers who have had their mortgage loans serviced by the company. In July 2012, Cheryl Hall filed a class-action lawsuit against the bank and Countrywide for forcing borrowers to pay for new coverage. Under the settlement, the lender will pay 22 percent of the appraised value of a home for the class representatives’ fees. The money will be dispersed amongst the borrowers and the bank will assist them to get back on their feet.
The allegations in the Countrywide Forced Flood Insurance lawsuit relate to the way the lender forced homeowners to buy and maintain flood insurance. Some banks are accused of receiving kickbacks to sell flood insurance, and others are accused of lying to investors about the Merrill Lynch takeover and bonus payouts. The bank has now agreed to pay $335 million in compensation to the borrowers who purchased a home through Countrywide Financial Corp.
The FTC says that Countrywide’s loan-servicing operation deceived homeowners into buying flood insurance policies that were inflated by thousands of dollars. The company’s lending arm also contributed to the problem by funding subprime and “nontraditional” loans and mortgages. The company also allegedly charged homeowners for services that were rendered useless after the homeowners’ bankruptcy cases had closed. Allegations in Countrywide Forced Flood Insurance lawsuit
Bank of America has agreed to settle a class action lawsuit brought by homeowners who claim they were improperly forced to purchase a high-priced flood insurance policy. According to the suit, the bank fraudulently forced homeowners to purchase these policies and then failed to inform them of their coverage. Bank of America also allegedly misled investors by lying about its acquisition of Merrill Lynch and its bonus payouts. In the end, the bank will pay $335 million to reimburse borrowers who had bought a flood insurance policy from Countrywide Financial Corp.
According to the settlement agreement, Ocwen will pay borrowers three times the amount of their original premiums and charges for the flood insurance policies. The case highlights the importance of consumer protection and the Attorney General’s Office’s recent efforts to secure restitution for borrowers. It has successfully secured settlements from banks and loan servicers. However, it is important to note that a settlement agreement does not automatically equate to a cash payment.
Claims of misrepresentation
The lawsuit, Saadat v. Countrywide Forced Flood Insurance, focuses on claims of misrepresentation arising out of forced flood insurance. The case involves DTPA violations and common law fraud. A plaintiff may also be entitled to compensation for his losses because he was misled about the flood zone on his property. But the court will likely have to determine whether the claims are valid.
In its response, Countrywide argues that the Plaintiffs failed to disclose that the property was in a flood plain and that the lender had placed portions of his loan payments into an escrow account to pay the premiums. Klecans maintains that Countrywide did not violate the NFIA because the lender does not have a duty to disclose this information. Nevertheless, the Court cited several cases that hold that a lender is not liable for misrepresentation, which is a common defense in a lawsuit against a mortgage lender.
Dates of misrepresentations or omissions
The plaintiffs of the Countrywide Forced Flood Insurance lawsuit have filed suit in state court, alleging that the bank forced them to purchase and maintain excessive flood insurance. In some cases, the bank also received kickbacks from flood insurance sales. The flood insurance premiums may have been added to the borrower’s mortgage balance or deducted from his home equity account. As a result, the costs of flood insurance are no longer affordable, and the homeowners can seek financial compensation.
Despite the Plaintiffs’ allegations, the plaintiffs’ claims do not involve any violations of the NFIA. Indeed, the Plaintiffs’ claims relate only tangentially to the lender’s obligations under the NFIA. Further, they do not allege that Countrywide violated the NFIA, which mandates that lenders notify borrowers of flood risk in advance.