By Catherine Anderson, Esq.
On June 28, 2013, Courthouse News Service reported on our class action which had been filed against OneWest Bank, IndyMac, Financial Freedom Senior Funding and other defendants concerning the force placement of insurance (commonly referred to in the industry as “force placed insurance” or “lender placed insurance”) on homeowner’s mortgages for hazard or fire insurance.
As alleged in our complaint, lender placed insurance is often twice to ten times as expensive as voluntary homeowner’s insurance obtained in the open market and includes the cost of kickbacks and other improper commissions to the lender and/or insurer which get charged to the homeowner’s mortgage. Recently, our action has been divided into two potential class actions: One action involves the lender placed hazard insurance which has been charged to homeowners with standard Fannie Mae Freddie Mac uniform mortgages by OneWest Bank and IndyMac through the insurance company Assurant and its subsidiary, American Security Insurance Company. From October 2010 through June 2013, American Security Insurance Company issued 65,136 lender placed hazard insurance policies on real property serviced by OneWest and/or IndyMac. The second action involves lender placed hazard insurance which has been charged to homeowners with reverse mortgages by OneWest and Financial Freedom Senior Funding through the insurance company Balboa Insurance and also includes claims for violation of the California Financial Elder Abuse statute.