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A class action lawsuit against Bank of America an its reinsurance company is alleging that the two groups were engaging in a reinsurance pay-to-play scheme that gave them illegal kickbacks in exchange for referrals to private insurers.
These “captive reinsurance schemes” are allegedly common in the mortgage industry, the Bank of America class action lawsuit says, which was discovered by the Inspector General of the Department of Housing and Urban Development, in which banks forced private insurance companies to give them a cut of the insurance premiums, plaintiffs William Weiss, Robert Lessman, Ann Harrell and Eddie Harrell explain.
Bank of America allegedly made an arrangement with its reinsurance corporation and several private insurance companies to give the bank part of its customers mortgage insurance payments if the customers were referred to the insurers by a Bank of America entity in the form of reinsurance premiums.
The plaintiffs claim that Bank of America Reinsurance Corporation made at least $284.7 million as a result of the agreement, in which the insurance companies would give Bank of America a share of the mortgage insurance premiums in exchange for the referral, which is allegedly a violation of the Real Estate Settlement Procedures and Racketeer Influenced and Corrupt Organizations Act, or RICO.
“This was accomplished through a secretive ‘pay-to-play scheme’ that utilized carefully crafted excess-of-loss or purported ‘quota-share’ reinsurance contracts that minimized risk exposure to bands of losses unlikely to be pierced,” the plaintiffs say in their class action lawsuit.
“Even with regard to the purported band of exposure, certain lenders, including [Bank of America] and their mortgage lending subsidiaries and/or affiliates, insulated themselves from providing any real reinsurance by: (a) making their captive reinsurance arrangements ‘self-capitalizing,’ in that they were required to put only ‘nominal initial capital’ into the trusts supporting the reinsurance contracts; and (b) providing no recourse for the failure to adequately fund the trusts,” the Bank of America mortgage kickback class action lawsuit states.
According to the inspector general’s investigation, as explained in the American Banker magazine, banks engaging in this practice were “supposedly providing catastrophic reinsurance, but the policies appeared to render it impossible that [the banks] ever suffer significant’ losses.”
The reason the banks could avoid losses is because “a bank could simply walk away from its nominal initial investment and leave the insurer to bear the other costs.”
The plaintiffs, who are from Pennsylvania and Michigan, are Bank of America mortgage owners, who claim they were injured by this scheme when they purchased their homes in 2006 and 2007.
They are proposing a nationwide class who had home mortgages through Bank of America and “purchased private mortgage insurance and whose residential mortgage loans were included within Bank of America’s captive mortgage reinsurance arrangements” from Jan. 1, 2004 and the present.
The private insurance companies that were allegedly part of pay-to-play arrangement and named in the Bank of America class action lawsuit are United Guaranty Residential Insurance Co., Triad Guaranty Insurance Corp., Republic Mortgage Insurance Co., Mortgage Guaranty Insurance Corp., Radian Guaranty Inc., Genworth Mortgage Insurance Corp. and PMI Mortgage Insurance Co.
The plaintiffs are charging Bank of America and Bank of America Reinsurance with violating and conspiring to violate the Racketeer Influenced and Corrupt Organizations Act, and unjust enrichment.
They are asking for statutory damages and to be repaid for all money they paid as a result of this alleged scheme.
There is not attorney information available for Bank of America at this time.
Plaintiffs are represented by Stephen J. O’Brien of Stephen J. O’Brien and Associates.
The Bank of America Reinsurance Class Action Lawsuit is Weiss et al v. Bank of America Corporation et al., Case No. 2:15-vc-00062, in the U.S. District Court for the Western District of Pennsylvania.
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6 thoughts onBank of America Hit With Illegal Kickback Class Action
Please add me. Wells Fargo did this to me ! They secretly forced placed wind insurances & life insurance on my police for 5 years and embezzled $65k out my escrow. I have my statements to show proof. My wind insurajce with Allstate was $900/year and Wells Fargo forced placed wind insurance on my account without notifying me for $4.000.00/year and conveniently made themselves Wells Fargo the agent on the policies double dipping in insurance commissions.
When will PMI payments be returned to the consumers with interest and penalties to the consumers
Hi I paid $200 a month in PMI insurance which was required by Bank of America until my home reach 1082 20% ratio my home reach that ratio the first year it was purchased but it took 14 years for me to get that removed I had to go 14 years with no late payments no missed payments and then get an appraisal to have that removed and then it took three years for them to come out and do an appraisal the PMI is supposed to be paid back because it’s not a real insurance it was just an amount of money that Bank of America Captain holding and I’ve asked for that money back and it’s falling on deaf ears that money is to be returned to every homeowner the full amount paid plus interest
mr.Brian Matthews I want to start a class action lawsuit in California 4 the return of insurance money(s)
class action lawsuit
Bryplaystore@gmail.com
I have been fighting nasty old Bank of America and all its crooked affiliates for FIVE (5) years now and over FOUR (4) feet of bogus, fraudulent, negligent correspondence from nearly TWENTY (2) different people making claim they represented the “office of the president and ceo” an anyone could quickly tell they were nothing more than $10+ per hour employees and part of the big scam on behalf of Bank of America and many other lenders.
There is no fiction or fantasy here and a another stack nearly 3 feet high of letters, faxes, and Emails sent to the CFPB, congress people from all over the US, the White House, and the USDOJ. Little to NO follow-up other than smoke and mirrors and NO action – many times no follow-up what so ever! Two separate requests under RESPA for important and critical information that could prove, beyond a doubt, who the actual holder/possessor is of the FIVE (5) initial loans I allegedly had with Countrywide Home Loans over the years from 2002- to 2009.
Even a huge law firm tried to intimidate me and sent purported copies of original documents that are forged, fabricated, and phony that are executed in blank with no dates by known “robo signers” like Michele Sjolander that B of A and a crooked law firm in Colorado used for a completely bogus and wrongful foreclosure while B of A was violating state and federal laws in “dual tracking” and then they finally conducted a sale 4 months later after the published date of march 2, 2016 (sale conducted July 20, 2016) and submitted a very low bid of $148,500 on a home they had sent me an estimate of value earlier in 2016 for $271,200- I believe this is also a violation of Colorado law as they claimed I owed nearly $200,000.
Senator Corey Gardner did get involved initially and supposedly obtained approval from Fannie Mae (Bank of America and Seterus have made claim that Fannie Mae owns my loans), but they are NOT a lender only a guarantor!!
The letter from Gardner said the trial modification would be at 2% and seemed to be the rate that was supposed to be used per the 2008 bailout in which nasty old Bank of America received $45 BILLION to supposedly help property owners. After three (3) years B of A offered supposed modifications based upon the same high interest rates of the five loans of 7% and merely added on all kinds of fees and charges and then amortized out to 40 and 45 years so the payments did not change but gave me a little breathing room. The so called modifications were completed by a company called Urban Settlement Services and they were executed in blank, no notary and certainly NOT recorded. Prior to doing this B of A recorded some bogus “assignments” with known “robo signers” and “robo notaries” and I have copies of all this.
The 10th Circuit Court here in Colorado just ruled last month that property owners may now join in a case against Bank of America and Urban for racketeering and there are thousands of complaints and settled lawsuits that are undisputed proof of this type of behavior. Check out the Montana Supreme Court ruling on the “Morrow Case” and see what Justice Laurie McKinnon had to say about Bank of America, also the National Mortgage Settlement, and the supposed epic case in which B of A settled with the USDOJ for nearly $17 BILLION and then find someone to track the money!!! Having paid out over $200 BILLION dollars in fines, penalties, and court case settlements it is my humble opinion that B of A should be banned from all courts in America for lack of clean hands- all this speaks for itself, but yet B of A and other lenders continue to steal property from innocent, helpless people like me!!!
Right there with you Fred! I was out cruzing, google’ing, in search of exactly what I just found here. I am so happy, quite tickled, to find very current info from you and others, on this site. Once again, in His time, God proves my faith.
My default date was Dec 2008. Refi Nov 2005 with CWide. My HUD-1 is Conv/Uninsured. I figured out later last year, after I received a complete accounting of my loan account activity from BANA (as a result of a Debt Validation Letter I sent), I apparently paid Radian Guarantee PMI every single month since my first payment in January 2006. Same story here! years and documented everything as I went….. Oh I have been looking for info since Aug 2014 when I found out BANA was foreclosing on my home, dual-tracking too, Oct 2014. Filed emergency chapter 7 one or two days prior to the foreclosure. Trustee, with no legal anything, postponed the sale until Nov 2014. On Oct 29, 2014 BANA filed in Fed Bankrptcy Court proof of claim or whatever, a note that was different than mine AND an undated Allonge with the stamped robo-signatures of the usual CWide gals and the “Original Lender-Landmark Mortgage” Officer signature is one Keja Newstrom. Well now…Keja Newstrom is currently the Training Manager for New named company that Landmark became when they closed in May 2010. 100% sure that Keja was NOT any kind of Vice Pres or any other Officer prior to Sept 2008, when BANA acquired CWide! I would have to check my OneNote page for Keja’s age to quote her age now, but if I recall anything close she is maybe early 30’s now. Gee really? Federal Bankruptcy court!
Foreclosed Jan 2015. After the void sale of my home by BANA and MTC Financial, Inc DBA Trustee Corps, here in WA State, I found out, documented with a case# from BANA after escalation, after escalation, etc… the underwriter documented the Monday or Tues after the sale that I did not qualify because my husband, who was never on my loan or title, did not live in the home. Reason for default, my husband’s incapacitating brain aneurysm and 2 strokes in late Nov 2008. He is medically incapable of living at home due to medically incapacitated. My income, husbands SSD and LTD has not changed since 2009. I paid the “Trial” payments for 15 months (May 2010 – July 2011) then, not the first time but once again, in June 2011 I supposedly didn’t send in my “requested docs” and my workout file was closed. That same month I received the Notice of BANA as my new Servicer effective July 1, 2011. How convenient. Well now that makes BANA a Debt Collector since I was already in default. Oh and I now, finally, have years of dates, times, names, emails, anything and all documented in an excel spreadsheet….
and on, and on and on, blah blah blah… You know what I’m talking about…
HERE IS YOUR GOOD NEWS ABOUT WHO OWNED YOUR NOTE/LOAN… At the end of Jan 2016 I received an IRS 1099-A from “Freddie”. Shows that Freddie was my lender and purchased my home at the foreclosure, bona fide purchaser according to the EX PARTE Unlawful Detainer Default Judgment and Writ that was posted on my house in April 2015. The good news, I’m still here in my home after almost 2 years post void sale to Freddie.
I have Freddie in 2 court cases:
1st is in the WA Court of Appeals Division II on my 2nd appeal on Freddie’s UDetainer, 2 writs have now been returned to the Superior Court in Clark County Washington upon Freddie’s instructions to the Sheriff to not execute and return to the court. The 2nd writ obtained by lies again and after the (My CPA and Civil Rights 42 USC 1983 case) Fed Court ruled that the ex parte default judgment and ex parte writ of restitution issued in April 2015 did not violate my Constit Right to Due Process because I’m still in possession of my home! And Freddie runs into court again and gets another writ! really…. On appeal..
My 9th Cir District Court, Western Washington case, Which is now in the 9th Circuit Court of Appeal Fed Court/San Francisco- Started in Clark County Superior and was removed by Clark County Sheriff Atkins to Fed court because of Federal Question of Civil Rights Violation. Defendants: Freddie, FHFA (conservator for Freddie and Fannie), Freddie’s UDetainer Attorneys Bishop, Marshall and Weibel (Seattle), MTC Financial, Inc DBA Trustee Corps (Trustee that violated almost every statutory requirement, including Federal Bankruptcy required min 45 day waiting period after dismissal of chpt 7, twice. I had to refile again in Nov 2014.) and the Clark County Sheriff Chuck Atkins, the state actor that has been violating for who know how many years now, several of the statutory requirements for serving a writ to say the least).
WA State has case law in place about this egregious, not even strong enough, behavior still going on and not one of Clark County law enforcement elected officials, Prosecutor Tony Golik, Sheriff Chuck Atkins, not the AG Ferguson or the Gov, Inslee are doing anything to make anyone, even the Superior Court Judge, follow any of the laws put in to protect WA homeowners.
Pamela S. Owen, Pro Se
Vancouver, WA
Just google my name. I’m all over Scribd and google. Working on the BANA Causes of Action and other stuff.
Also google: Jerzy Gruca
There are more….
My Contact Info: pamela.owen99@gmail.com
502.UCANTOO (502) 822-6866 Google Number. Any voicemail will be translated into email and text and sent to me if I am unable to answer at that time.
i have many documents to prove i was one of the customers of bank of america that received an insurance letter. then they changed my loan number to hide from the government. also complete break down of each payment i made that reveals most payments took 3 days to post complete payments. little amount each day. also interest posted doesnt come down after lots of payments the way it should. didnt know there was a law suit. please call me at 231-622-9501 i dont get on line often, so please dont e me back. thank you Lynn Criner