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Ocwen, Assurant to Pay $140 Million to Settle Force-Placed Insurance Suit

By HousingWire

Ocwen Financial and Assurant have agreed to pay $140 million to settle a massive class-action lawsuit, which accused Ocwen of artificially inflating the cost of force-placed insurance in exchange for kickbacks from Assurant.

The settlement agreement, which is awaiting final approval from federal court in Florida, resolves claims of 399,843 homeowners who took part in the class-action suit.

Under the terms of the settlement, Ocwen and Assurant will pay more than $140 million in monetary relief, which constitutes 50% to 100% of the “best-case scenario damages recoverable by the class had the parties proceeded to trial,” according to court documents obtained by HousingWire.

The settlement agreement states that Ocwen is prohibited from charging inflated premiums for force-placed insurance for five years. The settlement agreement also prohibits Ocwen from accepting commissions for force-placed insurance; entering into quota-share reinsurance arrangements with Assurant or any other insurer; and using Ocwen affiliates to place force-placed insurance coverage for a period of five years.

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