CIT Bank/Financial Freedom
Our Plaintiff is seeking to redress injury which she and the Class have suffered, and will continue to suffer, as a result of Defendants' unlawful practices relating to the servicing of reverse mortgages. Defendants' practices have resulted in unwarranted and excessive charges for insurance and inspection fees being placed on reverse mortgages, which has led to unprecedented rates of reverse mortgage foreclosures and the eviction of elderly consumers from their homes.
Defendants' unlawful actions include,
(a) Financial Freedom purchasing unconscionably high-priced insurance policies through its agent, Seattle Specialty, from surplus line providers, Lloyd's and Great Lakes, and charging the high priced policies in amounts up to twenty times greater than comparable insurance in the open market to Plaintiff and other borrowers' mortgage accounts, even though the insurance policies were in excess of the insurance required by the mortgage agreement;
(b) Financial Freedom entering into an exclusive relationship with Seattle Specialty for the placement of force-placed insurance policies on the Financial Freedom mortgage loan portfolio;
(c) Financial Freedom receiving unearned "commissions" and low cost or no cost loan tracking and loan monitoring services from Seattle Specialty, in exchange for Financial Freedom's agreement to use Seattle Specialty as its exclusive force placed insurance broker;
(d) Seattle Specialty's prearranged relationship with Lloyd's and Great Lakes as the exclusive force placed insurance providers for the Financial Freedom loan portfolio, whereby Seattle Specialty receives a commission from Lloyd's and Great Lakes as a percentage of the total net written premium of force placed policies on the Financial Freedom loan portfolio, a portion of which Seattle Specialty then kickbacks to Financial Freedom;
(e) Financial Freedom placing retroactive or backdated force placed insurance policies on Plaintiff and other borrowers' properties to cover periods of time which have passed and during which the property was not damaged and no claims were made;
(f) Financial Freedom charging for unwarranted inspection fees when the resident has provided proof of occupancy, Financial Freedom has been in contact with the resident, and/or Financial Freedom has no reasonable basis to believe that the property is vacant;
(g) Financial Freedom deeming the reverse mortgage "due and payable" as a result of the unwarranted insurance charges, inspection fees and unfounded vacancy reports;
and (h) Financial Freedom forcing the borrowers into foreclosure as a result of the excessively priced, duplicative, unnecessary and backdated force placed insurance policies, inspection fees and/or unfounded vacancy so that its parent company, CIT Bank, N.A., can reclaim the property through foreclosure proceedings and meet the deadlines to collect interest on the reverse mortgages from the Federal Housing Administration.
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