J.P. Morgan Chase has agreed to settle for $22.1 million class action lawsuits involving force-placed flood insurance imposed on homeowners in California and New York.
The agreement is the tip of the iceberg in a legal and regulatory settlement of accounts by plaintiff’s lawyers, courts and state regulators stemming from the period beginning 2007 until July 2012 when the housing boom turned into a bust and a number of homeowners throughout the country were unable to pay their mortgages.
The most recent settlement of the flood insurance FPI issue is among a group of FPI cases against J.P. Morgan nationwide. Costs of hazard FPI constitutes 90% of the total FPI claims nationwide, according to Adam M. Moskowitz, of Kozyak Tropin & Throckmorton in Miami, co-counsel in the main J.P. Morgan Chase hazard insurance case. Another 5% of the cases involve flood FPI, and a further 5% involve wind FPI, he said.
The hazard FPI claims are being handled in a federal court in Miami before Judge Frederico Moreno. Lawyers announced in September a $300 million settlement between J.P. Morgan, Assurant and plaintiff homeowners for those claims.
Disposition of that case is scheduled for Feb. 14 and involves 1.3 million homeowners nationwide.
Wind cases against J.P. Morgan Chase were wrapped up Nov. 22 through a final approval hearing. Moreno ordered final approval three days later. The settlement fund is $4.75 million, less attorney’s fees/costs/claims administrator cost.
But while the wind and hazard cases were heard in Florida, the most recently announced settlement in the J.P. Morgan Chase flood case is pending in federal district court in San Francisco. The preliminary approval hearing for the settlement is set for Jan. 17, Moskowitz says.
Most of the FPI flood cases involve loans serviced Washington Mutual, based in Seattle, which failed in 2009. Chase allegedly took ownership of a mortgage on a condo owned by the lead plaintiff, Clements, and a year later asked that she provide proof of flood insurance.
A month later, Clements alleges Chase sent her a letter notifying her that insurance had been placed on her property for which she was financially responsible, according to a statement made by lawyers at Hagens Berman Sobol Shapiro LLP, when they filed the lawsuit in May 2012.