Forcing mortgage borrowers to purchase an excessive amount of expensive flood insurance coverage will cost Bank of America $31 million.
The banking conglomerate agreed late last month to pay the amount in order to settle a class action lawsuit brought on by roughly 259,320 of its mortgage borrowers. They will each receive a portion of the $21.82 million set aside for them.
The remaining portion of the settlement will be divided between legal teams, which will get $7.7 million in fees—a quarter of the settlement—and settlement administrator Analytics LLC, which will be awarded $630,000.
The suit originated in Oregon in 2011, filed by Larry and Ronda Arnett. It was soon joined by several other cases originally filed elsewhere.
Each plaintiff will receive $2,500 as an incentive reward.
