Bank of America Will Pay $228M in Forced-Insurance Accord

Bank of America Corp. agreed to pay $228 million to settle claims the bank overcharged for insurance homeowners were forced to accept when their regular policies lapsed.

The amount was disclosed in a document requesting approval for the accord filed yesterday in Miami federal court. Lawyers for homeowners told a federal judge in February that the Charlotte, North Carolina-based bank had agreed to a deal without providing further information.

Wells Fargo & Co. (WFC), HSBC Holdings Plc (HSBA), JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) have also agreed to similar accords in cases alleging that banks got a financial windfall by cutting deals with insurance companies and over-charging borrowers for property coverage.

The deal is an “extraordinary settlement” that provides “prospective relief that would effectively end the lender-placed insurance practices at issue in this case,” lawyers for plaintiffs said in the Bank of America case.

Attorneys will seek as much as $16 million in fees, according to the filing.

As part of their settlements, JPMorgan will pay $300 million and Citigroup will pay $110 million. HSBC agreed to pay $32 million, according to a separate proposed settlement. The amount of Wells Fargo’s settlement hasn’t yet been specified.

Lawrence Grayson, a spokesman for Bank of America, declined to comment on the settlement’s amount.

The case is Hall v. Bank of America N.A., 1:12-cv-22700, U.S. District Court, Southern District of Florida (Miami).

To contact the reporters on this story: Susannah Nesmith in Miami at; Christie Smythe in Brooklyn at

To contact the editors responsible for this story: Michael Hytha at Mary Romano, Andrew Dunn

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.