FORT LAUDERDALE, Fla. (Legal Newsline) – Two Florida residents are suing a third-party loan servicer and an insurance company over alleged kickback schemes.
Pankaj Patel and Laketha Wilson, individually and for all others similarly situated, filed a class-action lawsuit Dec. 10 in U.S. District Court for the Southern District of Florida against Specialized Loan Servicing (SLS) and American Security Insurance Co. (ASIC), alleging breach of contract, breach of good faith and fair dealing, unjust enrichment, tortious interference with a business relationship, violations of the Truth in Lending Act, violations of the Racketeer Influenced and Corrupt Organizations Act, and violations of the Florida Deceptive and Unfair Trade Practices Act.
SLS and ASIC have worked together to provide force-placed insurance coverage to homeowners in Florida and nationwide for many years, the suit states.
The suit claims that in exchange for being SLS's exclusive force-placed insurer, ASIC provided kickbacks to SLS in the form of cash payments for illusory reinsurance that carries no commensurate transfer of risk, performing below-cost mortgage servicing functions that have little or nothing to do with force-placed insurance, "expense reimbursements," and unearned "commissions."
According to the suit, borrowers ultimately bear the cost the kickbacks because the defendants bundle the costs into the amounts charged for insurance coverage and deduct them from borrowers' escrow accounts. The defendants disguise the charges as legitimate by characterizing them as income earned by SLS when they are really unearned, unlawful profits, the suit states.
The plaintiffs and others in the class seek damages, interests, costs, injunctive and declaratory relief, and attorney fees.
They are represented by attorneys Adam M. Moskowitz, Thomas A. Tucker Ronzetti, Rachel Sullivan and Robert J. Neary of Kozyak Tropin & Throckmorton in Coral Gables, Florida; by attorneys Aaron S. Podhurst, Peter Prieto, John Gravante III and Matthew Weinshall of Podhurst Orseck in Miami; by attorneys Lance A. Harke, Sarah Engel and Howard M. Bushman of Harke Clasby & Bushman in Miami Shores, Florida; and by attorney Archie C. Lamb Jr. of Archie Lamb, Associates in Birmingham, Alabama.
U.S. District Court for the Southern District of Florida Case number 0:15-CV-62600-JIC