COURT DISMISSES ALL CLAIMS IN PRIVATE MORTGAGE REINSURANCE “KICKBACK” SCHEME RESPA SUIT
As we reported yesterday , a number of suits in recent years have been filed challenging lender and insurer practices regarding private mortgage insurance. This practice has come under attack in suits alleging that privage mortgage insurers and lenders (and/or their captive reinsurers) have unlawfully entered into reinsurance arrangements between the primary insurers that issue the insurance, and captive reinsurers of the lender, that amount to “kickbacks” to the lenders violating the Real Estate Settlement Procedures Act (“RESPA”), among other causes of action.
A California federal court has granted motions to dismiss filed by each of the defendants, including the lender, primary insurers, and reinsurer. The court found that the plaintiff acquiesced in the dismissal of the bank defendants. The court also found the plaintiff had no standing to sue one of the primary insurers, which had not insured the named plaintiff’s mortgage, but had allegedly insured some putative class members’ mortgages. Finally, the court dismissed all the claims under RESPA’s statute of limitations, finding that the “discovery rule” did not apply, and the plaintiffs were not otherwise entitled to equitable tolling. Samp v. J.P. Morgan Chase Bank, N.A., Case No. 11-civ-1950 (USDC C.D. Cal. May 7, 2013).
This post written by John Pitblado.
