HSBC Hazard Insurance Lawsuit
- by Ayden
If you or someone you know is facing the consequences of forced hazard insurance, you may wish to file an HSBC Hazard Insurance Lawsuit. This case highlights how HSBC inflates the costs of hazard insurance to earn a secret and unwarranted profit. As an example, a homeowner was forced to take out a hazard policy when his home burned down. Once the fire had subsided, the homeowner had no way of finding a new insurer until after his house had been rebuilt. Further, the homeowner claims that Assurant paid HSBC a kickback commission in exchange for a hazard insurance policy.
HSBC inflates the cost of hazard insurance to procure a hidden and unwarranted profit
A lawsuit has been filed against HSBC over the practice of forcing homeowners to buy hazard insurance. While forcing homeowners to buy insurance is not illegal, it is unethical. The bank has been accused of inflating the cost of this coverage by as much as 400%. In addition to the lawsuit, several subsidiaries of HSBC have been accused of profiting from inflated insurance prices.
When a family is already struggling with a difficult economy, a large insurance premium is not the first thing they can afford. The amount of money that would have gone towards the cost of hazard insurance is diverted to other purposes. HSBC’s actions are an attempt to increase their profit. But their actions only serve to increase the burden on already strained families.
HSBC charged fees to fall behind on mortgage payments
A class action lawsuit has been filed against HSBC and PHH Mortgage, alleging that the bank unlawfully charged borrowers fees for falling behind on their mortgage payments. The lawsuit claims that the two companies conspired with third-party vendors to tack on unnecessary fees. The mortgage companies labeled the fees in vague terms, such as “Other Fees,” “BPOO FLIP,” and “BPO Cost,” and the plaintiffs claim that she was charged dozens of times for fees ranging from $10 to $100.
In the settlement, HSBC admitted that it had failed to review third-party fees and failed to review the fees submitted to Fannie Mae and the FHA. HSBC failed to properly review these fees and did not follow appropriate quality-control procedures. Further, the bank failed to oversee the fees charged by its outside counsel and other third-party providers. These oversight failures resulted in millions of dollars in losses for the FHA and Fannie Mae.
HSBC charged fees to fall behind on flood insurance
In a recent settlement, HSBC PLC and Assurant Inc. agreed to pay $1.8 million to settle a class-action lawsuit alleging that they acted in bad faith by forcing homeowners into flood insurance contracts that were excessively expensive. The bank allegedly took kickbacks by forcing homeowners to sign up for flood insurance policies that required more coverage than they needed and required. In return, the bank was able to pocket the extra money from the homeowners who were caught up on their flood insurance.
The Massachusetts Attorney General’s Office filed the lawsuit after determining that HSBC violated state and federal consumer protection laws by forcing homeowners into flood insurance policies. HSBC, which received compensation from force-placed insurance policies, failed to disclose that it charged fees to homeowners when their coverage was too low. Moreover, HSBC’s affiliate received commissions from Assurant for putting homeowners in risky situations but did not perform traditional insurance agent functions.
HSBC inflates the cost of flood insurance to procure a hidden and unwarranted profit
In the context of Plaintiff’s mortgage loan, HSBC Defendants forced-placed insurance policies for borrowers and made them subject to higher premiums and unwarranted kickbacks. Moreover, they provided insurance coverage that was far more than the legal minimum required to protect the lender’s interest. Moreover, HSBC Defendants facilitated forced-placed insurance policies for Plaintiff by collecting premiums directly from the borrower’s escrow accounts. In this manner, the plaintiffs’ mortgage loan was refinanced at higher interest rates than the market rate.
In response to this, HSBC Defendants engaged in a kickback scheme, which resulted in a far greater economic benefit for them than is permitted by mortgage terms. As a result, HSBC Defendants withdrew money from borrowers’ escrow accounts to pay flood insurance premiums. In exchange for doing so, HSBC Defendants started receiving kickbacks and other compensation under a kickback scheme that exceeded the mortgage terms.
If you or someone you know is facing the consequences of forced hazard insurance, you may wish to file an HSBC Hazard Insurance Lawsuit. This case highlights how HSBC inflates the costs of hazard insurance to earn a secret and unwarranted profit. As an example, a homeowner was forced to take out a hazard policy…
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