force-placed insurance

The truth about many class actions is that, when actually tested, they often fail, whether due to lack of evidence or faulty legal theories. That means a plaintiff’s attorney will have doggedly pursued a losing case. Mortgage servicer Homeward Residential, Inc., recently defeated a class action by repeatedly putting the plaintiff’s claims to test.
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I can’t recall any decision in which a judge openly compared his job to that of a tarot card reader, but a federal jurist in Florida recently did exactly that—in the context of a class action over lender-placed insurance (LPI). The prediction at hand was whether the regional appellate tribunal, the Eleventh Circuit Court of Appeals, would accept or reject the filed-rate doctrine as a defense to LPI lawsuits.
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The most critical part of any class-action defense is often the narrative. That is because a judge who believes that consumers have been cheated will often permit a class action to go forward, even if the case is otherwise questionable. Nowhere is that tendency more evident than in the wave of lender-placed insurance (“LPI”) lawsuits currently sweeping the country.
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The most common class-action battle in the real estate industry today deals with so-called force-placed insurance, which mortgage lenders buy when a borrower wrongly lets her homeowner’s coverage lapse. Courts around the country have come to varying conclusions about the viability of those cases. Two recent decisions add to the tally of opinions favoring consumers.
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