A Pennsylvania couple is leading a class action consumer fraud lawsuit against Citibank, a number of its affiliates, and other insurers that allege the companies took part in a scheme to push fraudulent reinsurance policies on home mortgages.
According to Law 360 (subscription required), homeowners Linda and Vincent Menichino allege in their consumer fraud lawsuit that Citibank and its affiliates utilized a “captive reinsurance scheme” where the bank was paid illegal referral payments in the form of purported reinsurance premiums by insurers.
The result was what the lawsuit described as “carefully crafted excess-of-loss or purported quota-share reinsurance contracts that minimized risk exposure to bands of losses unlikely to be pierced.” Citibank was able to take an unlawful split of private mortgage insurance premiums that were being paid the customers of the insurers that were referred by Citi entities.
This, the lawsuit added, violated the Real Estate Settlement Procedures Act of 1974. It singles out Citibank affiliates CitiMortgage Inc. and Citibank Mortgage Reinsurance Inc., as well as insurers United Guaranty Residential Insurance Co., PMI Mortgage Insurance Co., Genworth Mortgage Insurance Corp. and Republic Mortgage Insurance Co.as defendents.
The class action lawsuit seeks to represent anyone who received residential mortgage loans from Citibank, CitiMortgage, or any of their affiliates since January 1, 2004, or anyone who purchased private mortgage insurance and had residential mortgage loans included in Citi‘s captive mortgage reinsurance arrangements.
If you have been wronged by consumer fraud, contact Sokolove law today for a free consultation and to learn more about potentially pursuing a fraud lawsuit.