(Reuters) – Bank of America and QBE Insurance Corp have agreed to pay $228 million to settle claims that they engaged in a kickback scheme inflating the cost of insurance that homeowners were forced to buy, according to a court filing.
The deal reached in Miami federal court is the latest of several multi-million-dollar settlements reached over "force-placed" insurance, which is coverage that lenders arrange to protect their interest in a property when a homeowner's insurance has lapsed.
Mortgage agreements do allow lenders to charge homeowners for the insurance, but lawsuits have accused banks of abusing that right by passing on to homeowners the costs of kickbacks they received from insurance providers.
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