A recent lawsuit alleges that Citibank has forced homeowners to purchase flood insurance costing substantially more than is required by the mortgage agreement and federal law. According to the suit, Citibank coerced homeowners into buying the excessive flood insurance by purchasing it directly from the homeowners’ escrow accounts, a violation of the terms of the mortgage agreement, HUD requirements and federal law. The lawsuit further claims that, in addition to unlawfully charging and procuring the flood insurance, Citibank and its affiliates received improper commissions and kickbacks in connection with the forced-placed insurance. Homeowners experiencing similar treatment from Citibank may have legal recourse to recover compensation for the unnecessary coverage, as well as other damages they may have accrued.
Has Citibank or Citimortgage force-placed excessive flood insurance on you? If so, you may be eligible to participate in a class action lawsuit against the bank for allegedly breaching its contract and violating laws regarding deceptive business practices.
Citibank Flood Insurance Requirements
The Citibank flood insurance lawsuit claims that the bank has force-placed excessive flood insurance, sometimes costing up to three times the market value of the home, on contracted homeowners. While moderately priced flood insurance may be necessary by law for some mortgages (typically on houses in flood zones), the amount charged by Citibank far exceeds any regulatory requirement, according to the complaint. Furthermore, some homeowners have claimed that their mortgage does not have any requirement for flood insurance, and they were forced to carry it by the bank regardless.
In many cases, Citibank forced placed flood insurance on homeowners through illegal means, according to the allegations. Numerous complaints claim that the bank purchased the insurance directly from the homeowner’s escrow account. It has been alleged that this practice is not only inconsistent with the terms of Citibank mortgage agreements, but also consistent with HUD requirements and federal law.
It is believed that the most egregious claim made against Citibank was not that it charged exorbitant premiums for its forced-placed flood insurance or that it unlawfully procured such coverage, but rather that the bank allegedly offered itself and its affiliates commission and kickbacks from the forced-placed flood purchase. The suit claims that the manner in which it arranged these kickbacks is illegal. It has been further suggested that such a practice demonstrates a disregard for the general welfare of the bank’s clients, many of whom are struggling simply to pay off their mortgages in these trying economic times.
Participating in a Citibank Flood Insurance Lawsuit
One purported class action lawsuit has already been filed in New York on behalf of borrowers, alleging that Citibank and co-defendants force-placed excessive flood insurance, procured payment through escrow accounts and other deceptive means and arrange for kickbacks. If you or a loved one had excessive flood insurance forced-placed on you by Citibank, CitiMortgage or any other lender, you may also have legal recourse to recover your lost funds and receive compensation for any further damages.
Class Action Lawsuit On Behalf Of Thousands Of Homeowners Against Citibank and Midfirst Bank Alleging Abuses In Their Force-Placed Flood Insurance Programs Allowed To Proceed In U.S. District Court - Click Here to Read