MINNEAPOLIS (Legal Newsline) – A major bank is being sued over claims it abused its right to force borrowers to purchase mortgage insurance.
Mary Jo Muellner and Gregory R. Mullner filed the class action lawsuit on Jan. 28 against U.S. Bank alleging the bank placed insurance coverage limits that exceeded the unpaid balance of the mortgage. The case was originally filed in state court in Hennepin County, but the defendants have removed it to U.S. District Court for the District of Minnesota.
The lawsuit also claims U.S. Bank purchased backdated policies and charged borrowers for expired coverage; failed to refund premiums to borrowers after coverage was canceled; and received kickbacks, commissions and other compensation connected to the property insurance coverage.
U.S. Courthouse in Minneapolis
American Security Insurance Company is also named as a defendant in the case, and the plaintiffs claim the company participated in the “scheme” by misrepresenting coverage amounts; failing to check market values for homes that were being insured; issuing insurance plans for the bank that were backdated; and offering the bank kickbacks in return for business.
The lawsuit seeks class status for those that purchased mortgages from U.S. Ban, and also asks for an unspecified amount of damages plus court costs.
The plaintiffs are represented by Berk Black, Bryce M. Miller and Lawrence P. Schaefer of Schaefer Halleen, LLC of Minneapolis; Robert K. Shelquist, Elizabeth Odette and Lockridge Grindal Nauen, P.L.L.P. Of Minneapolis; Richard J. Fuller of Richard J. Fuller Attorney At Law in Minneapolis; and Charles A. Horowitz of Charles A. Horowitz Attorney At Law in Minneapolis.
U.S. District Court for the District of Minnesota case number 0:15-cv-00596
