Mortgage Borrowers Fail to Recoup Lender-Placed Insurance Costs

Reverse mortgage borrowers failed to win damages for allegedly inflated lender-placed property insurance after the Third Circuit ruled that a state regulatory sign-off of the rates stopped courts from stepping in.

The filed-rate doctrine—which limits claims for damages based on rates filed with regulatory agencies—prevents judges from determining whether individual insurance rates are fraudulent or too high, the U.S. Court of Appeals for the Third Circuit said Wednesday, affirming a lower court’s decision.

“Once an insurance rate is filed with the appropriate regulatory body, we have no ability to effectively reduce it by awarding damages for an alleged overcharge,” Chief ...