Insurance Packing Lawsuits

Locate a Local Real Estate Lawyer

Find Lawyers in Other Categories
Most Common Real Estate Issues

What Is Insurance Packing?

Insurance packing refers to a fraudulent practice associated with home loan and home equity arrangements. In an insurance packing scheme, a lender adds or "packs" an insurance policy clause into the borrower’s home equity mortgage contract. This is done in such a way that the borrower usually doesn’t notice the terms until they start feeling the effects of the insurance clause.

The credit insurance generally costs additional money and is often not a part of the original contract negotiation terms. In most cases, the insurance clause is intended to benefit only the lender. It does this by insuring them on all or most of the loan funds in the instance of default.

In many instances, the borrower would not have agreed to the loan arrangement if they were aware of such a clause in the contract. However, insurance packing can be illegal and may constitute a legal violation based on fraud, misrepresentation, or other legal theories.

How Can I Detect and Prevent Insurance Packing?

You can avoid being a victim of insurance packing by:

Also, you’ll want to check the background and credentials of the lenders you’re working with. You should do this both for the individual representative as well as the company they may be working for. Lastly, don’t be afraid to ask any questions about issues that arise during the lending transaction.

What Are the Legal Penalties for Insurance Packing Violations?

Legal penalties for insurance packing violations are often based on contract laws. Remedies may include:

These remedies and consequences will depend mostly on the facts involved in the packing scam. Criminal fraud punishments can also apply in some cases.

Should I Hire a Lawyer for Help with Insurance Packing Lawsuits?

Insurance packing can sometimes put the lender in a very disadvantaged position. It can lead to serious financial losses and often involves dishonest negotiating practices. You may need to hire a real estate lawyer if you need help filing a claim for an insurance packing violation. Your attorney can provide you with the necessary representation and guidance during litigation.

Consult a Lawyer - Present Your Case Now!
Last Modified: 06-06-2014 12:41 PM PDT

Find the Right Lawyer Now

Link to this page

Law Library Disclaimer

LegalMatch Service Mark