PMI (PRIVATE MORTGAGE INSURANCE) SHOULD BE OFFERED TO HOMEOWNERS, TOO! WHY ARE ONLY LENDERS ALLOWED TO PURCHASE PMI TO PROTECT THEMSELVES AGAINST POSSIBLE HOMEOWNER DEFAULT? WHY SHOULDN'T THE HOMEOWNER HAVE AN EQUAL OPPORTUNITY TO PURCHASE PMI TO PROTECT THEMSELVES AGAINST PREDATORY LENDING, ROBO-SIGNING, FORGERY, AND OTHER FRAUDULENT ACTS WE'VE SEEN COMMITTED BY LENDERS?

Washington woman's suit claims Wells Fargo overcharged her for flood insurance

About the writer Brian Bowling is a Pittsburgh Tribune-Review staff writer and can be reached at 412-325-4301 or via e-mail. Ways to get us  Be a Facebook fan   Follow us on Twitter   E-mail Newsletters   On your mobile

By Brian Bowling
PITTSBURGH TRIBUNE-REVIEWFriday, April 8, 2011

Wells Fargo Home Mortgage has been forcing homeowners to buy more flood insurance than federal law requires and has even bought the insurance and billed homeowners for the unnecessary coverage, according to a class-action lawsuit filed Thursday in federal court.

A Wells Fargo spokeswoman had no immediate response.

Desiree Morris of Washington, Pa., claims in the lawsuit that Wells Fargo Home Mortgage bought her mortgage shortly after she closed on her house in 2009. She owed about $113,000 on the house, but the company bumped her flood insurance up to $129,800 in November 2010, the lawsuit says.

The company also sent her a letter in December demanding that she obtain coverage up to the National Flood Insurance Program limit of $250,000 even though federal law only requires her to cover the amount she owes on her mortgage, the lawsuit says.

The next letter, in February 2011, announced the company had purchased $94,000 worth of additional flood insurance for her and that the $893 for the 90-day policy would be charged to her escrow account.

It was followed by a letter in March announcing that a revised insurance policy would be issued to her. A week later, she received another letter saying that the company had purchased $82,200 in flood insurance for her and the $780.90 for that 90-day policy would be charged to her escrow account.

The second notice also informed Morris that Wells Fargo would purchase a full-year policy at $250,000 coverage if she didn't, and that the company would receive a commission for purchasing the policy.

It wasn't clear from the lawsuit whether the second 90-day policy was in addition to or in lieu of the first one. Charles Frohman, the Minneapolis attorney representing Morris, couldn't immediately be reached for comment.

The company has done the same thing to hundreds and possibly thousands of other homeowners in federally designated flood-plain areas across the country, the lawsuit says.

Morris is claiming the company violated state and federal real estate and lending laws as well as breached mortgage contracts with her and other homeowners. The company also unjustly enriched itself on the payments it received from insurers for the policies it forced on the homeowners, the lawsuit says.

The plaintiffs are seeking actual and punitive damages including restitution of the excess premiums charged to their escrow accounts.

http://www.insurancejournal.org/content/repository/journals/16/1/5.pdf

Read more: Washington woman's suit claims Wells Fargo overcharged her for flood insurance - Pittsburgh Tribune-Review http://www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_731336.html#ixzz1JGLwfHQk

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WARNING ABOUT WELLS FARGO: THEY ARE OVERLY FOND OF YOUR ESCROW FUNDS

Lawsuit blasts Pennsylvania flood policies

About the writer Brian Bowling is a Pittsburgh Tribune-Review staff writer and can be reached at 412-325-4301 or via e-mail. Ways to get us  Be a Facebook fan   Follow us on Twitter   E-mail Newsletters   On your mobile

By Brian Bowling
PITTSBURGH TRIBUNE-REVIEWSaturday, April 9, 2011

Two Pennsylvania homeowners are suing their mortgage companies for requiring too much flood insurance on their homes.

In separate federal class-action lawsuits, Rick Wulf, 32, of Schuykill County and Desiree Morris of Washington claim the banks that bought their mortgages required more insurance than federal law stipulates.

Bank of America said it had a "bigger interest" in his property than what he owes, Wulf said, but never explained what that might be. He said bank representatives often gave conflicting answers to other questions.

"Every time I talked to a different person, they had a different answer," he said Friday.

Bank of America spokeswoman Shirley Norton said the lawsuit is baseless because banks are allowed to require insurance coverage at any amount up to the federal limit of $250,000.

Wulf and others in his lawsuit are represented by Nichols Kaster PLLP of Minneapolis, which filed similar class-actions against Bank of America in Massachusetts and Chase Home Finance LLC in California and New York.

The firm filed its fifth lawsuit on Thursday in Pittsburgh on behalf of Morris and other homeowners facing similar demands from Wells Fargo Bank N.A. and Wells Fargo Home Mortgage Inc. Morris claims the company violated state and federal real estate and lending law, and breached mortgage contracts while unjustly enriching itself.

James Hines, a Wells Fargo spokesman, said the lender had no comment on the lawsuit.

Morris bought her house in 2009 and financed it through Victorian Finance LLC. She bought flood insurance coverage of $118,000, slightly more than the home's purchase price.

Wells Fargo Home Mortgage bought her mortgage shortly afterward. In November 2010, the coverage was bumped up to $129,800. A month later, Wells Fargo sent her a letter demanding she increase coverage up to the National Flood Insurance Program limit of $250,000, even though the U.S. Department of Housing and Urban Development requires only enough to cover what's owed on the house, the lawsuit says.

The letter said if Morris didn't purchase the coverage, Wells Fargo would do so through its affiliate, Wells Fargo Insurance Inc.

In February 2011, the company sent her a letter saying it purchased $94,000 of coverage for 90 days at a cost of $893, which it would charge to her escrow account. A month later the amount changed to $82,200 in coverage for 90 days, at a cost of $780.90 to her escrow.

Kai Richter, one of the attorneys representing Morris, said the reduction shows "how arbitrary they are in determining the 'required' amount."

Thousands of people potentially could join the Wells Fargo case because it's one of the largest banks in the country, Richter said. Excess insurance coverage eventually causes homeowners' mortgage payments to increase, he said. One plaintiff in Massachusetts is paying $200 more monthly, he said. That could happen to Morris, he said.

"For someone in her 20s, just starting out in her life, it's a real burden," he said.

Read more: Lawsuit blasts Pennsylvania flood policies - Pittsburgh Tribune-Review http://www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_731467.html#ixzz1J8LVvHR3

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