In today’s economic environment, many homeowners are struggling to make their mortgage payments...it is wrong for any bank to add to their burden by demanding excessive flood insurance coverage and by purchasing worthless insurance at their expense.
Minneapolis, Minnesota (PRWEB) November 02, 2011
On November 2, 2011, Plaintiff Matthew Lacroix filed a class action lawsuit against U.S. Bank, N.A. and U.S. Bank Home Mortgage in the United States District Court for the District of Minnesota. The lawsuit alleges that U.S. Bank unlawfully billed Lacroix’s mortgage escrow account for “force-placed” flood insurance coverage in excess of his loan balance, even though the policy that it purchased did not actually provide coverage in excess of his loan balance. According to Plaintiff’s attorney, Kai Richter, “This insurance was not only unnecessary -- it was worthless.”
The Complaint alleges that U.S. Bank was not authorized to require Lacroix to maintain flood insurance coverage in excess of his loan balance because this amount of coverage is not required under the National Flood Insurance Act and was not required under Lacroix’s mortgage. Moreover, the lawsuit further alleges that this excessive “force-placed” flood insurance coverage was worthless because the policy that U.S. Bank purchased explicitly stated: “THIS INSURANCE WILL NOT PROVIDE AN AMOUNT OF COVERAGE GREATER THAN THE NET AMOUNT YOU OWE ON THE MORTGAGE.” According to the Complaint, Lacroix had to increase his mortgage payment to make up the resulting “shortage” in his escrow account, imposing a significant hardship on him.
“In today’s economic environment, many homeowners are struggling to make their mortgage payments, and it is wrong for any bank to add to their burden by demanding excessive amounts of flood insurance coverage and by purchasing worthless insurance at their expense,” said Richter. “It is particularly egregious that U.S. Bank purchases this insurance out of borrowers’ escrow accounts, since these escrow funds are supposed to be held in trust by U.S. Bank,” continued Richter.
In his class action Complaint, Lacroix seeks relief on behalf of himself and other borrowers across the country who have been similarly affected by U.S. Bank’s alleged conduct. Based on this alleged conduct, Lacroix’s Complaint asserts claims against U.S. Bank for breach of contract, breach of its duty of good faith and fair dealing, breach of its fiduciary duty to borrowers in connection with the handling of escrow accounts, and unjust enrichment.
The case is entitled Lacroix v. U.S. Bank, N.A., et al., No. 11-cv-3236 (D. Minn.). Plaintiff is represented by Kai Richter and Michelle Drake from Nichols Kaster, PLLP. Nichols Kaster has offices in Minneapolis, Minnesota and San Francisco, California, and is currently pursuing similar cases against several other major banks, including JPMorgan Chase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., and RBS Citizens, N.A. (also known as Citizens Bank). Additional information is located at http://www.nka.com or may be obtained by calling Nichols Kaster, PLLP toll free at (877) 448-0492.