Banks were getting away with many unjust practices for some time. However, JPMorgan’s recent settlement is proof that homeowners’ rights are being preserved. Like JPMorgan Chase, NA, many banks were forcing expensive insurance policies on homeowners for properties that were uninsured or underinsured and profiting at the homeowners’ expense.
Recently it has been found that these large mortgage lenders were profiting handsomely from placing homeowners with policies at higher rates. The high rates from the insurance companies stemmed from the kickbacks they were paying the lenders for providing them with the force-placed business. Mortgage lending banks received commissions and free administrative services as a form of payment for all the force-placed insurance policies.
JPMorgan, being one of the worst offenders, has agreed to a $300 million settlement. The number is simply jaw dropping and is getting the attention of plaintiffs going after the other major banks.
The expected response is for other large banks to come to similar agreements. With the precedent set by JPMorgan, other plaintiffs will start aggressively pursuing similar suits. In order to avoid further reputation damage, we can expect the other banks to follow in JPMorgan’s footprints.