J.P. Morgan Chase and lawyers for homeowners who paid forforce-placed insurance have settled a lawsuit in Miami that callsfor the bank to stop accepting commissions for placing FPI fromAssurant, the nation’s top provider of FPI.

Under the agreement, the J.P. Morgan and Assurant will berequired to make payments to homeowners equal to 12.5 percent ofthe insurance premium each affected homeowner was charged. The dealcould be worth as much as $300 million to 1.3 million homeownersnationwide, according to a document filed by the plaintiffs'lawyers.

In addition, plaintiffs' lawyers could get up to $20million.

Assurant spokesman Robert Byrd said in a statement that thesettlement with Chase and the court resolves claims dating back to2008. “The settlement is subject to court approval and we areunable to offer further comment while the matter is pending in thecourt,” Byrd said.

J.P. Morgan Chase spokesperson Amy Bonitatibus added that, “Wediscontinued our reinsurance agreement earlier this year. Thesettlement will have no expected impact on our financials.”

The proposed deal is the first nationwide settlement ofallegations that banks and FPI carriers overcharged homeowners forinsurance in cases where the homeowners were having problems payingtheir mortgages. Given that similar suits are pending againstnationwide lenders Bank of America, Citibank, HSBC Bank USA andWells Fargo in the same court, the proposed settlement.

State and federal regulators and consumer advocates havecomplained for years that mortgage banks have been able to padtheir profits by aligning with insurers that set insurance premiumsextremely high in cases where the servicers impose insurance ondistressed properties and then negotiated various deals with thecarriers that funneled much of the premiums back to theservicers.

Federal mortgage agencies, Fannie and Freddie, the ConsumerFinancial Protection Agency, and the regulators of Fannie andFreddie are all scrutinizing force-placed homeowners insurance.

State regulators, including those in California and New York,are also taking a hard look at FPI costs. However, those agreementsare not uniform. And, the latest settlement does not call for therestrictions Assurant agreed to in May with the New York Departmentof Financial Services. Amongst the provisions contained in the NewYork settlement with Assurant not included in the latest deal iscreation of a permissible loss ratio as a way to reduce homeowners'premiums.

Adam Moskowitz, a partner at Kozyak Tropin & Throckmorton inMiami and co-counsel in the cases, confirmed that the banks namedin the lawsuits have initiated mediation talks similar to thoseinvolving Chase and Assurant. "We are looking forward to workingwith all of the defendants to resolve all of these cases,"Moskowitz said.

Force-placed homeowner’s insurance is projected to bring in $2.6billion in written premiums annually. In the settlement documents,lawyers for the plaintiffs said, that the settlement ends insurancepractices “we allege have unjustly enriched the defendants by morethan $1 billion over the past five years.”

The settlement was submitted Friday to Judge Federico Moreno,chief of the federal district court in Miami. The judge is nowbeing asked to certify the case as a class-action lawsuit. Floridais a hotbed for the lawsuits. Moskowitz said “Florida has more FPIin place than any other state.”

According to the settlement agreement submitted to the courtFriday, Assurant and QBE, which was party to an earlier settlementin the same court but by another judge this year, “control morethan 99% of the market for force-placed insurance.”

QBE and Wells Fargo in May agreed in the same court to settle asimilar suit. That settlement mandated larger potential payoutsthan the latest settlement, but did not include the samerestrictions on future business arrangements.