Lawyers at Beasley Allen are currently representing individuals who have been victimized by JPMorgan Chase Bank’s practice of force-placing flood insurance on borrowers with home equity lines of credit and home equity loans.  The class-action is currently before the Eastern Division of the Southern District of Ohio.  In 2002, the Plaintiffs in our case refinanced their home in Mississippi and obtained a Home Equity Loan that was eventually acquired by JPMorgan Chase Bank (Chase).  At the time the Plaintiffs entered into their loan, their home was not considered to be in a flood zone.  In 2011 the area was rezoned. The map change resulted in the Plaintiffs’ home being reclassified as one located within a flood hazard area.  Pursuant to federal laws, homes located in a flood hazard area must maintain flood insurance as a condition of any loan or line of credit secured by the property.

The Plaintiffs soon learned that their neighbors, other homeowners, had appealed the flood hazard determination for their properties and had been successful.  Instead of immediately obtaining flood insurance, the Plaintiffs chose to appeal the flood hazard determination just as their neighbors had done. In the meantime, Chase sent a letter to the Plaintiffs informing them that if they did not purchase flood insurance, then flood insurance would be forced upon them. In May of 2011, Chase informed the Plaintiffs that it had force-placed flood insurance on their home in the maximum amount of coverage available through the National Flood Insurance Program.

During our investigation of this case, we have learned that an affiliate of Chase received kickbacks in the form of so-called “commissions” from Chase’s insurance vendor, American Security Insurance Company (doing business as “Assurant”).  Moreover, Chase’s flood insurance requirements exceeded federal flood insurance requirements, forcing borrowers to pay for more coverage than necessary  The class-action is pursuing claims for Chase’s violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), the Real Estate Settlement Procedures Act (RESPA), and the Truth in Lending Act (TILA) as well as claims based on common law.

If any of our readers have a Home Equity Loan or Home Equity Line of Credit and have been a victim of Chase’s force-placed flood insurance scheme, contact Archie Grubb at Archie.Grubb@beasleyallen.com, or Andrew Brashier at Andrew.Brashier@beasleyallen.com or by phone at 800-898-2034. We would also like to talk with any of our lawyer–readers who have clients who have such a claim and would like for us to help them.

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