Sept. 09--In what plaintiff attorneys are calling a precedent-setting case, JP Morgan Chase Bank has reached a $300 million settlement with homeowners who said the bank unfairly cashed in on deals with insurers to provide expensive policies.
Plaintiff attorneys said it is the first national settlement of five cases pending in Miami before a federal judge, including Wells Fargo, HSBC, Citibank and Bank of America. Wells Fargo earlier reached a $20 million settlement with Florida homeowners that awaits a final fairness hearing Wednesday.
A Chase spokeswoman said the bank has discontinued a reinsurance agreement that was part of its arrangement with insurers providing policies for homeowners who fell behind on payments or otherwise let coverage lapse. Such policies are known as "force placed" or "lender-placed" insurance.
"We discontinued our reinsurance agreement earlier this year," Chase spokeswoman Amy Bonitatibus said. "The settlement will have no expected impact on our financials."
The bank did not admit liablity or wrongdoing as part of the settlement.
"This is a significant, precedent-setting case that has changed the landscape of forced-place insurance and influenced the policies of financial institutions across the U.S.," said a statement on behalf of plaintiff attorneys who include lead co-counsel Adam Moskowitz of Miami.
The settlement would provide compensation for homeowners who qualify.
The Chase case alone involves $2.4 billion in forced-placed insurance and 1.3 million plaintiffs, attorneys said.
Florida is a hotbed for such insurance. In 2011, 35 percent of forced-place insurance nationally was charged in the state.
Notice of the proposed settlement was filed in U.S. District Court in Miami late Friday.
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