US Bank Lawsuit for Force Placed Flood Insurance

U.S. Bank is the target of a new potential class action lawsuit that alleges the company forced placed flood insurance on mortgage holders in illegal amounts and through questionable methods. It is claimed that U.S. Bancorp purchased flood insurance policies at high premiums and transferred the costs to homeowners by deducting the policy cost from the home equity or adding it to the balance of the mortgage. As a result, many homeowners claim that they were swamped with mortgage payments, with some losing their homes.

The flood coverage placed by U.S. Bank was in significant excess of what was required by law.

Allegedly, the Plaintiff signed for a line of credit without being notified that he was required to purchase flood insurance. In September, 2008, FEMA conducted a revision of the Special Flood Hazard Area map and the homeowner’s property was now required to purchase flood insurance. The National Flood Insurance Act (“NFIA”) required that insurance must be maintained “in an amount at least equal to the outstanding principal balance of the loan or the maximum limit of coverage made available under the Act, whichever is less.”

According to the suit, the Plaintiff then received notification from U.S. Bank that flood insurance had been purchased for him because he did not hold the required amount, and the total was taken from their home equity or added to his existing mortgage. The flood coverage placed by U.S. Bank was in significant excess of what was required by law, and the letters sent to the homeowner were materially false, misleading, and deceptive, the suit claims. It is alleged that U.S. Bank misrepresented federal guidelines in order to confuse or trick the Plaintiff and other homeowners, and profited in the process.

In the process of force placing flood insurance on mortgage holders, it has been alleged that U.S. Bank profited through kickbacks, commissions, and other compensation from the insurance companies. The lawsuit claims that U.S. Bank did not act in good faith, knowing full well that their actions were contrary to accepted legal practice and fair dealing. The company targeted in this lawsuit has been called under the names of U.S. Bank, N.A., U.S. Bancorp, and U.S. Bank Home Mortgage. The potential class action lawsuit looks to cover anyone who was required by U.S. Bank, on or after November 2, 2005, to purchase or maintain flood insurance for their property in an amount at least equal to the National Flood Insurance Program maximum or the replacement cost value of their property.

If you or someone you know may have been the victim of the potentially illegal actions of U.S. Bank or any other bank that has forced placed flood insurance, you may be eligible to enter a class action lawsuit against your lender. The lawsuit is seeking actual damages, putative damages, injunctive relief, equitable relief, and other appropriate damages due to the potentially illegal conduct of U.S. Bank and its affiliates. To learn more about your eligibility for legal recourse, fill out the form on the right to see if you could possibly enter a lawsuit to seek compensation for excessive flood insurance.