Sept. 9 (Bloomberg) -- JPMorgan Chase & Co. and insurers reached a $300 million settlement with property owners who accused the bank of taking kickbacks in exchange for sticking homeowners with overpriced insurance policies.
JPMorgan, Assurant Inc. and other insurers will pay refunds valued at 12.5 percent of annual premium costs to homeowners who had the policies placed on their properties by the bank starting in January 2008, according to documents filed Sept. 6 in federal court in Miami.
A homeowners who borrowed from JPMorgan stand to “recover hundreds, if not thousands, of dollars as a result of the settlement,” lawyers for the plaintiffs said in a memorandum filed with the court.
JPMorgan, based in New York, was accused of placing mortgage borrowers’ required hazard and wind coverage with Assurant and other insurers at inflated rates. Some of the excess costs were kicked back to a JPMorgan unit, the plaintiffs alleged.
Neither JPMorgan nor Assurant admitted wrongdoing under the agreement.
“The settlement will have no expected impact on our financials,” Amy Bonitatibus, a JPMorgan spokeswoman, said in an e-mailed statement. The insurance agreement at issue was discontinued this year, she said.
Robert Byrd, a spokesman for New York-based Assurant, said in an e-mailed statement that the insurer provided “lender-placed insurance on thousands of homes where original coverage has lapsed, in accordance with the terms of the mortgage and all applicable regulations.”
He declined to comment further on the settlement, which is subject to court approval.
JPMorgan is one of several large banks facing claims by homeowners that they overcharged mortgage borrowers for lender-placed insurance. In March, Assurant agreed to pay $14 million to resolve similar allegations brought by the New York State Department of Financial Services.
The case is Saccoccio v. JPMorgan Chase Bank NA, 13-cv-21107, U.S. District Court, Southern District of Florida (Miami).
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