by Brian Mahany
Despite the turning tide, big banks continue to win many court battles. Individual homeowners just can’t afford to take on the banking giants and their Park Avenue lawyers. Now and then, however, homeowners win. And some times they win big. Every victory empowers more and more homeowners to come forward. Last week’s victory in the federal 1st Circuit Court of Appeals is likely to cost Bank of America millions.
Recently there have been a spate of lawsuits against big banks regarding forced place insurance. Just last week we wrote about the fate of one of our clients who is facing the loss of his home over a forced place insurance snafu.
All mortgage lenders require borrowers to maintain insurance on their homes. If the house is destroyed by fire or tornado, lenders want to be sure they will get paid. If one allows their insurance to lapse, lenders have the right to “force place” insurance on the home. In concept that seems fair, however some lenders have been charging exorbitant rates for such insurance, take kickbacks from the insurance company and even place insurance on homes that are already insured.
Two homeowners in Massachusetts sued Bank of America claiming the bank was illegally forcing homeowners to maintain excessive amounts of flood insurance and also collecting kickbacks from the insurance companies. The trial court dismissed their claims.
On appeal, a three judge panel reversed the trial judge and said the homeowners presented viable claims. The First Circuit Court of Appeals controls federal courts in Maine, Massachusetts, New Hampshire, Rhode Island and Puerto Rico. Although not binding in other states, rulings from federal appeals courts carry great weight everywhere.
For its part, Bank of America continues to deny any wrongdoing but last week’s loss will probably bring all parties to the settlement table. In our experience, big banks don’t want to face juries these days.
Bank of America isn’t the only big bank accused of this practice. Wells Fargo, Chase, Citibank and U.S. Bank have all been accused of similar misdeeds. Two weeks ago a federal judge in Pennsylvania said force place insurance charges against Wells Fargo could proceed.
None of these cases are over. Homeowners could still lose in all of them. The tide is turning, however, and little by little the big lenders are realizing that their reign of terror is over.
Some may criticize my words as being overly harsh but after representing many people who have been victimized by Bank of America and others, no words can express the anxiety, stress and emotional distress they have suffered.
Mahany & Ertl represents homeowners and others who have claims against banks and mortgage companies. We are not a traditional foreclosure defense firm. If you are facing the imminent loss of your home, contact an attorney in your area for assistance. Contact us, however, if you think you have claims against your bank for something illegal they may have done to you.
From wrongful lockouts, to forged documents to wrongful denials of HAMP mortgage modifications, we may be able to help you get justice and end the uncertainty. For more information, contact attorney Anthony Dietz at or the author Brian Mahany at or (414)704-6731 (direct). All inquiries are protected by the attorney client privilege and kept in strict confidence.
Already have a private or local legal aid lawyer helping you with your foreclosure? We can often assist and prosecute the claims against the bank while they assist you with the foreclosure.
Whatever you decide to do, don’t delay. In many states once the foreclosure case is closed it is impossible to bring new charges against the bank. Every state is different as are the facts of each case. While we can’t give you legal advice by a blog post, we do need to warn you that these cases are usually time sensitive.
Mahany & Ertl – America’s Fraud Lawyers (c) Proudly Giving Homeowners A Voice from our offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine and Minneapolis, Minnesota. Legal services available in many jurisdictions.