New York, NY: A class action lawsuit has been filed against Chase Home Finance, LLC and JPMorgan Chase Bank NA, in the U.S. District Court in the Southern District of New York, alleging that Chase deceptively required consumers to purchase and maintain flood insurance coverage in amounts greater than required by law or necessary to cover their loan balance. The lead plaintiff, Lloyd Warren III, seeks to represent a class of consumers who obtained from Chase loans or lines of credit secured by property held in New York and who were also required to obtain flood insurance.
According to the Complaint, Plaintiff Warren obtained a line of credit from Chase secured by his property, and Chase required that Warren obtain flood insurance to cover the available credit line on his loan. During the financial crisis, Chase reduced Warren's credit line and subsequently authorized Warren's request for a corresponding reduction in flood insurance coverage.
Soon after, however, Chase retracted this authorization and demanded that Warren obtain even more coverage than originally required, in an amount more than three times his principal balance and credit line. In so demanding, Chase misrepresented federal flood insurance requirements and informed Warren that, if he did not obtain coverage at the newly required amount, Chase would force coverage on Warren in an amount likely higher than the going market rate.
The Complaint alleges that Defendants breached their duty of good faith and fair dealing and violated the New York General Business Law section 349 and the federal Truth and Lending Act.
