A major bank was sued on Feb. 26 over allegations that it abused its right to force borrowers to purchase mortgage insurance.
Mary Jo Muellner and Gregory R. Mullner filed the lawsuit against U.S. Bank alleging the bank placed insurance coverage limits that exceeded the unpaid balance of the mortgage.
The lawsuit also alleged 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.
American Security Insurance Company is also named as a defendant in the case. Te plaintiffs claim the company participated in the alleged 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 who purchased mortgages from U.S. Bank 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 in Minneapolis, Minnesota; Robert K. Shelquist, Elizabeth Odette and Lockridge Grindal Nauen, P.L.L.P. in 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.
State of Minnesota District Court County of Hennepin Fourth Judicial District case number 0:15-cv-00596.
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