<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "US District Judge Renee Bumb / Photo by Carmen Natale

A federal judge in Camden largely rejected a motion to dismiss class action for "placed force" insurance policies for reverse mortgage holders.

Mortgage Lender CIT Bank, Mortgage Broker Financial freedom Senior Funding Corp. and three insurance companies decided to file the lawsuit, alleging that the defendants had conspired to engage in abusive practices against a category of property owners. reverse mortgages. But US District Judge Renee Bumb denied the request to launch the complaint of nine counts, except to dismiss a charge of tortious interference with the defendants of the insurance company.

Decision authorizes action against Financial Freedom, CIT and the three insurance companies – QBE Insurance Corp., QBE First Insurance Agency and MIC General Insurance – for charges of conspiracy to defraud, to violate the law on organizations influenced by corruption and corruption. New Jersey Consumer Fraud Act. Financial Freedom and CIT also face charges of breach of contract, violation of the implicit agreement in good faith and fair dealing and violation of the law on the veracity of the practice of credit.

The lawsuit is brought in the name of a potential class of CIT borrowers to whom defendant insurance companies have imposed force insurance. The lawsuit alleges that reverse mortgage holders whose property insurance is canceled have been charged excessive premiums and fees for policies placed on their homes through arrangements between CIT, Financial Freedom and the three companies. insurance.

The only plaintiff named is Monica Gray, Earl Gray Jr.'s executant, who died in 2016 after receiving a reverse mortgage from Financial Freedom on her home in Cinnaminson. He left the property to Monica's children, Jasmine and Justin, in a trust. But he failed to maintain insurance coverage against the risks on his property, as required by the mortgage conditions, which prompted Financial Freedom to arrange for the issuance of forced insurance on his property.

The lawsuit alleges that Financial Freedom receives a commission or bribe by buying compulsory insurance from the QBE and MIG General defendants. The cost of the insurance and the bribe is then passed on to the owner, according to the lawsuit.

The lawsuit does not dispute Financial Freedom's ability to obtain compulsory insurance to protect its interests in the services it provides to borrowers, but challenges its "manipulation" of the process through its "ploy" with the other defendants.

"The practices of the defendants have not only resulted in the imposition of excessive and unjustified fees for insurance and inspection fees on reverse mortgage services, but have also led to rates without previous reverse mortgage foreclosures and the expulsion of elderly consumers from their homes, "said the prosecutor. claims.

Bumb rejected the claims of tortious interference with the defendants' insurance after finding that the allegations lacked an element of malicious intent required. She said that in the context, malice does not mean bad will, but that the harm was inflicted intentionally, without justification or excuse. In concluding that this was not the case, she acquitted the defendants of the insurance company under the heading of Trivial Interference.

CIT and Financial Freedom stated that the statutory claims against them had been pre-empted by the Homeowner's Loans Act, a federal statute. But Bumb was not in agreement. Although the United States Supreme Court and the United States Third Circuit Court of Appeals have not yet ruled on the preventive effect of HOLA on state law claims, Bumb found no pre-emption based on decisions of other federal courts of appeal.

The defendants also asserted that the RICO and Truth in Lending Act accounts were prescribed and that they failed on the merits. Bumb said the issue of the status of RICO's limitations was "the one in which they could finally take it", but it is "better decided after the discovery". Likewise, the question of the fair pricing of the TILA statement "is better dealt with in a developed register than at the stage of oral argument".

The plaintiffs and class are represented by Roosevelt Nesmith, lawyer at Montclair, and Catherine Anderson of Giskan Solotaroff & Anderson in New York. Louis Smith of Greenberg Traurig at Florham Park, represents CIT; and Charles Faletta of Sills, Cummis & Gross in Newark and Stephen LeBlanc of Buckley Sanders in Washington, DC, represent insurance companies. None of the lawyers responded to a request for comment. "Data-reactid =" 22 "> US District Judge Renee Bumb / Photo by Carmen Natale

A federal judge in Camden largely rejected a motion to dismiss class action for "placed force" insurance policies for reverse mortgage holders.

Mortgage Lender CIT Bank, Mortgage Broker Financial freedom Senior Funding Corp. and three insurance companies decided to file the lawsuit, alleging that the defendants had conspired to engage in abusive practices against a category of property owners. reverse mortgages. But US District Judge Renee Bumb denied the request to launch the complaint of nine counts, except to dismiss a charge of tortious interference with the defendants of the insurance company.

Decision authorizes action against Financial Freedom, CIT and the three insurance companies – QBE Insurance Corp., QBE First Insurance Agency and MIC General Insurance – for charges of conspiracy to defraud, to violate the law on organizations influenced by corruption and corruption. New Jersey Consumer Fraud Act. Financial Freedom and CIT also face charges of breach of contract, violation of the implicit agreement in good faith and fair dealing and violation of the law on the veracity of the practice of credit.

The lawsuit is brought in the name of a potential class of CIT borrowers to whom defendant insurance companies have imposed force insurance. The lawsuit alleges that reverse mortgage holders whose property insurance is canceled have been charged excessive premiums and fees for policies placed on their homes through arrangements between CIT, Financial Freedom and the three companies. insurance.

The only plaintiff named is Monica Gray, Earl Gray Jr.'s executant, who died in 2016 after receiving a reverse mortgage from Financial Freedom on her home in Cinnaminson. He left the property to Monica's children, Jasmine and Justin, in a trust. But he failed to maintain insurance coverage against the risks on his property, as required by the mortgage conditions, which prompted Financial Freedom to arrange for the issuance of forced insurance on his property.

The lawsuit alleges that Financial Freedom receives a commission or bribe by buying compulsory insurance from the QBE and MIG General defendants. The cost of the insurance and the bribe is then passed on to the owner, according to the lawsuit.

The lawsuit does not dispute Financial Freedom's ability to obtain compulsory insurance to protect its interests in the services it provides to borrowers, but challenges its "manipulation" of the process through its "ploy" with the other defendants.

"The practices of the defendants have not only resulted in the imposition of excessive and unjustified fees for insurance and inspection fees on reverse mortgage services, but have also led to rates without previous reverse mortgage foreclosures and the expulsion of elderly consumers from their homes, "said the prosecutor. claims.

Bumb rejected the claims of tortious interference with the defendants' insurance after finding that the allegations lacked an element of malicious intent required. She said that in the context, malice does not mean bad will, but that the harm was inflicted intentionally, without justification or excuse. In concluding that this was not the case, she acquitted the defendants of the insurance company under the heading of Trivial Interference.

CIT and Financial Freedom stated that the statutory claims against them had been pre-empted by the Homeowner's Loans Act, a federal statute. But Bumb was not in agreement. Although the United States Supreme Court and the United States Third Circuit Court of Appeals have not yet ruled on the preventive effect of HOLA on state law claims, Bumb found no pre-emption based on decisions of other federal courts of appeal.

The defendants also asserted that the RICO and Truth in Lending Act accounts were prescribed and that they failed on the merits. Bumb said the issue of the status of RICO's limitations was "the one in which they could finally take it", but it is "better decided after the discovery". Likewise, the question of the fair pricing of the TILA statement "is better dealt with in a developed register than at the stage of oral argument".

The plaintiffs and class are represented by Roosevelt Nesmith, lawyer at Montclair, and Catherine Anderson of Giskan Solotaroff & Anderson in New York. Louis Smith of Greenberg Traurig at Florham Park, represents CIT; and Charles Faletta of Sills, Cummis & Gross in Newark and Stephen LeBlanc of Buckley Sanders in Washington, DC, represent insurance companies. None of the lawyers responded to a request for comment.