In re PHH Lender Placed Insurance Litigation
PHH Lender Placed Insurance Litigation Settlement
Civil Action No. 1:12-cv-01117-NLH-KMW

Frequently Asked Questions

 

 

 

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  • Notice was mailed to individuals who had a residential insurance policy lapse, who had a hazard, flood, flood gap, or wind-only lender-placed insurance policy (“LPI Policy”) issued for a residential property, and were charged by PHH, as the mortgage servicer, for the LPI Policy between January 1, 2006 through July 31, 2015 ("Class Period").

    The Court ordered the Notice to be sent to Class Members because these individuals have a right to know about the Settlement of this class action lawsuit, which concerns LPI Policies issued by the Assurant Defendants or by another insurer for which the Class Members were charged by PHH, and about their options.

    If a Class Member satisfies the claim criteria and submits a valid claim, that individual will receive either: (a) a cash award from an Administrator approved by the Court, if the individual paid all or a portion of the premium for the LPI Policy; or (b) a credit towards what the individual currently owes PHH, or, at Defendants’ sole discretion, a partial refund check from the Administrator, if the individual has not paid the premium for the LPI Policy. However, the cash award or credit will not be made until any objections or appeals are resolved.

  • The Notice is part of a package sent to all potential Settlement Class Members. The package includes the Notice, the Instructions for the Class Action Claim Form, and the Class Action Claim Form. The package explains the lawsuit, the Settlement, Class Members’ legal rights, what benefits are available, who is eligible for them, and how to get them. You may download the entire Notice package on the Important Documents page.

    The Court in charge of the case is the United States District Court for the District of New Jersey, and the case is a consolidation of cases known as Patrick Gallo v. PHH Mortgage Corporation, Case No. 12-cv-01117-NLH-KMW; Kevin Finch et. al. v. PHH Mortgage Corporation, Case No. 1:14-cv-01694-NLH-KMW; and Joseph Burroughs, et al. v. PHH Mortgage Corporation, Case No. 1:15-cv-06122-NLH-KMW.

    Plaintiffs Patrick Gallo, Kevin Finch, Marc Werner, Donna Werner, Joseph Burroughs, and Leslee Burroughs sued on behalf of all Settlement Class Members and are called the “Plaintiffs.” The companies they sued, PHH, ASIC, SGIC, and VIIC are called the “Defendants.”

  • This lawsuit involves lender-placed insurance (“LPI”), which is insurance (hazard, flood, flood gap, or wind-only) that is placed on a borrower’s property to protect the borrower and mortgage lender when the borrower’s insurance policy lapses, or when the borrower does not maintain a homeowner’s insurance policy that is acceptable to the mortgage lender. When an LPI Policy is placed pursuant to law or the borrower’s mortgage contract, PHH pays premiums to the LPI insurer who writes the policy, and then PHH charges the borrowers for those premiums.

    The Plaintiffs have brought claims on behalf of all persons in the Settlement Class (as defined in response to Question 5). Plaintiffs allege that when a borrower was required to have insurance for his or her property pursuant to a residential mortgage or home equity loan or home equity line of credit, and evidence of acceptable coverage was not provided (for example, when the insurance policy did not exist or had lapsed), PHH would place insurance in a manner such that PHH allegedly received an unauthorized benefit. Plaintiffs allege further that PHH did so primarily to receive alleged “kickbacks” in the form of expense reimbursements or expense subsidies from the Assurant Defendants. Plaintiffs also allege that the way in which LPI policies were obtained and placed caused the amounts charged to be excessive.

    All Defendants expressly deny Plaintiffs’ allegations and assert their actions are fully authorized under the mortgage instruments and by law. They also expressly deny that they did anything wrong. There has been no court decision on the merits of this case and no finding that Defendants committed any wrongdoing.

  • Both sides have agreed to a Settlement to avoid the cost and risk of a trial and so that borrowers can get benefits in exchange for releasing Defendants from liability.

  • To see if you will be affected by this class action, you first have to determine if you are a member of the Settlement Class.

    The “Settlement Class” includes all borrowers in the United States who, within the Class Period (as defined below), were charged by PHH Mortgage Corporation under a hazard, flood, flood gap, or wind-only LPI Policy for Residential Property, and who, within the Class Period, either (i) paid to PHH the Net Premium for that LPI Policy or (ii) did not pay to and still owe PHH the Net Premium for that LPI Policy. Excluded from the Class are: (i) individuals who are or were during the Class Period officers or directors of the Defendants or any of their respective affiliates; (ii) any justice, judge, or magistrate judge of the United States or any State, and their spouses; (iii) borrowers who only had an LPI Policy that was cancelled in its entirety such that any premiums charged and/or collected were fully refunded to the borrower or the
    borrower’s escrow account; and, (iv) all borrowers who file a timely and proper request to be excluded from the Class.

    The “Class Period” is from January 1, 2006 through July 31, 2015.

    “LPI Policy” means a lender-placed residential hazard, flood, flood gap, or wind-only insurance policy or policies issued by ASIC, SGIC, or VIIC, or another insurance company and placed pursuant to a mortgage loan agreement, home equity loan agreement, or home equity line of credit serviced by PHH to cover a borrower’s failure to maintain the required insurance coverage on the residential property securing the loan.

  • If you are not sure whether you are included in the Settlement Class, or you have questions about the case, you may call the toll free number, 1-844-702-7326.

  • Defendants have agreed to provide a cash award or credit to each Settlement Class Member in the following amounts:

    1. A credit or payment equal to 6% of the Net Premium on the LPI Policy issued during the Class Period to claimants who were charged for a flood, wind or hazard LPI Policy on or after February 1, 2014;
    2. A credit or payment equal to 11.5% of the Net Premium on the LPI Policy issued during the Class Period to claimants were charged for a hazard LPI Policy on or before January 31, 2014.

     

    Payments will be made provided that the Settlement Class Member submits a valid and properly completed Claim Form, including for some claimants, providing a form of verification of their identity.

     

    Each Settlement Class Member must submit a Claim Form to be eligible to receive these benefits. Defendants also have agreed to additional injunctive relief from which you may benefit. The Settlement benefits are described in further detail in the Settlement Agreement, which is available on the Important Documents page.

    This Settlement will not affect any rights or claims that you may have under the National Mortgage Settlement or any other settlement between PHH and any governmental or private entity. This Settlement also will not affect any claim for benefits on your LPI Policy that you have made or may make in the future.

  • To receive a cash award or credit towards what you currently owe, you must be a Settlement Class Member and must submit a properly completed and accurate Class Action Claim Form by mail postmarked by the Claim Deadline. You may also submit a completed Claim Form by uploading it to the Online Claim Filing page no later than the Claim Deadline, provided that scanned copies of signatures, and for those Claims requiring verification documents, scanned copies of those verification documents are uploaded with the appropriate claim number to associate the upload with the Claim. If the Court approves the Settlement and enters Judgment on the date of the Final Approval Hearing and no appeal is filed, the deadline to submit a properly completed and accurate Claim Form will be October 27, 2017.

    The Class Action Claim Form Instructions and a Class Action Claim Form were sent with the Notice. You may also call the toll-free number 1-844-702-7326 to obtain a Class Action Claim Form. Please read the Claim Form Instructions carefully. For Settlement Class Members who are eligible for a cash award check (rather than a credit), or if you no longer have a mortgage loan account serviced by PHH, your identity must be further confirmed through one of several options. The Claim Form Instructions and the Claim Form explain what those options are. If your Claim Form is not properly completed and/or all required information is not provided, it will be deemed invalid.

  • The Class Action Claim Form Instructions and Claim Form explain the different relief available to Settlement Class Members, depending upon whether they paid their LPI premium.

    As explained on the Claim Form, Settlement Class Members are eligible for a cash award if during the Class Period they made at least one full monthly mortgage payment to PHH after: (a) their existing escrow account was adjusted to charge the increased premium for the LPI Policy; or (b) an escrow account was created to charge the increased premium for the LPI Policy and was charged for the LPI Policy; or (c) they paid some LPI premium.

    All other Settlement Class Members who, during the Class Period, were charged by PHH for their LPI Policy, and who have not paid and still owe the charged net premium for that policy, are eligible for a reduction of what they currently owe PHH in the amount of 11.5% or 6% of the Net Premium charged to the claimant during the Class Period for the LPI Policy by PHH. The net premium is the amount of the LPI premium minus any refunds already provided to the borrower. Alternatively, Defendants may elect, in their sole discretion, to send partial cash award checks to such claimants.

  • You should not provide the same answer to both questions. For example, if you answer “Yes” to Question 2 indicating that you paid all or a portion of the premium, then you should mark “No” to Question 1.

    You may only check the “Yes” box to Question 2 (indicating you were charged by PHH and paid the LPI premium), which may make you eligible for a cash payment, if you made at least one full monthly mortgage payment after: (a) your existing escrow account was adjusted to charge the increased premium for the LPI Policy; or (b) an escrow account was created for you by PHH to charge the increased premium for the LPI Policy; or (c) you paid some LPI premium.

    If you were charged by PHH and still owe the premium for your LPI Policy, but you did not make one full monthly mortgage payment, or did not pay any LPI premium, you must check the “No” box to Question 2, but may check the “Yes” box to Question 1 (indicating you have been charged by PHH and still owe and have not paid the LPI premium).

  • The Court held a hearing on July 27, 2017 where it approved the Settlement. There may be subsequent appeals. It is always uncertain when any appeals, if taken, will be resolved. You will receive your cash award or credit within 210 days after the Settlement becomes final and effective, i.e., after all appeals are resolved.

  • If you are a Settlement Class Member and did not exclude yourself, you are a part of the Settlement Class. That means you cannot sue, continue to sue, or be part of any other lawsuit against Defendants about LPI, or the issues that were or could have been raised in this case. It also means that all of the Court’s orders concerning the Settlement Class will apply to you and legally bind you, including the Release described in detail in Section 10 of the Settlement Agreement. This Release provision describes the legal claims that you give up if this Settlement is approved and you did not exclude yourself. Please carefully read this Release and the Settlement Agreement.

  • If you do nothing as a Settlement Class Member, you will receive no money or credit from this Settlement. If you did not exclude yourself from the Settlement, you will not be able to start a lawsuit or continue with a lawsuit against Defendants about the legal issues that were or could have been raised in this case, ever again.

  • The deadline to exclude yourself has passed. If you fall within the definition of the Settlement Class, as described in further detail in response to Question 5, and did not exclude yourself, you are automatically a member of the Settlement Class.

  • Any Settlement Class Member who did not opt out of the Settlement shall be part of the Settlement Class, shall be bound by all Orders and proceedings in this action, and shall give up the right to sue any of the Defendants for the claims that this Settlement resolves. If you desired to opt out, you must have taken timely affirmative written action even if you have filed a separate action against any of the Defendants or are a putative class member in any other class action filed against any of the Defendants. If you have a pending lawsuit, please contact your lawyer in that lawsuit immediately. The exclusion deadline was June 27, 2017.  This deadline has passed.

  • No. If you are a Settlement Class Member and excluded yourself, do not send in a Claim Form to ask for any money or a credit. But, you may sue or continue to sue Defendants individually, or you may be part of a different lawsuit against Defendants.

  • The deadline to object to the Settlement has passed.

  • The Court appointed the following lawyers to represent all Settlement Class Members. Together, these lawyers are called Class Counsel. You will not be charged any money to pay for these lawyers.

    Peter A. Muhic
    Kessler Topaz Meltzer & Check, LLP
    280 King of Prussia Road
    Radnor, PA 19087
    Telephone: (610) 667-7706
    Adam M. Moskowitz
    Kozyak, Tropin, & Throckmorton, LLP
    2525 Ponce de Leon Blvd., 9th Fl.
    Coral Gables, FL 33134
    Telephone: (305) 372-1800
    Lance A. Harke
    Harke Clasby & Bushman LLP
    9699 NE Second Ave
    Miami, FL 33138
    Telephone: (305) 536-8220

     

  • The Court approved Class Counsel's request for attorneys’ fees and expenses of $4,232,898, and a Case Contribution Award of $5,000 each paid to Named Plaintiffs Patrick Gallo, Kevin Finch, Marc Werner, Donna Werner, Joseph Burroughs, and Leslee Burroughs for their time and effort undertaken in the matter.

    Defendants will separately pay the fees and expenses, and the Case Contribution Awards that the Court awards, of $4,232,898 in attorney’s fees and expenses to Class Counsel and $5,000 each to Named Plaintiffs Patrick Gallo, Kevin Finch, Marc Werner, Donna Werner, Joseph Burroughs, and Leslee Burroughs. These amounts will not reduce the amount of any cash awards or credits to Settlement Class Members.

  • The Court held a Final Approval Hearing on July 27, 2017, to consider whether the Settlement is fair, reasonable, and adequate. Following the hearing, the Court granted Final Approval of the Settlement on July 27, 2017. You may obtain a copy of the Final Approval Order on the Important Documents page.

  • The Court granted Final Approval on July 27, 2017.  The opportunity to speak at this hearing has passed.

  • The notice summarizes the lawsuit. More details are in the Settlement Agreement. You may also contact Class Counsel, as identified in Question 18.

    In addition, you may call 1-844-702-7326 toll free to find answers to common questions about the Settlement, a Claim Form, and other information to help you determine whether you are eligible for relief from this Settlement.

    PLEASE DO NOT CALL THE COURT. PLEASE ALSO DO NOT CALL OR SEND CORRESPONDENCE PERSONALLY TO THE JUDGE OR HIS STAFF.

  • If you would like to update your name, you must mail a written name change request to the Settlement Administrator at the below address, along with proof of your name change. Valid proof of name change includes, but is not limited to, a copy of a marriage license, divorce decree, or court order.

    Gallo/Finch/Burroughs Settlement Center
    c/o JND Legal Administration
    PO Box 6878
    Broomfield, CO 80021

For More Information

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Mail

Gallo/Finch/Burroughs Settlement Center
c/o JND Legal Administration
PO Box 6878
Broomfield, CO 80021