The whole point of insurance is to protect against future risks. Forcing borrowers to buy expired insurance at inflated premiums is inexcusable.
Fort Lauderdale, FL (PRWEB) November 14, 2011
On November 14, 2011, Plaintiff Christine Ulbrich filed a nationwide class action lawsuit against GMAC Mortgage, LLC and Balboa Insurance Services, Inc. in the United States District Court for the Southern District of Florida. The lawsuit alleges that GMAC and Balboa illegally backdated force-placed insurance policies and charged borrowers for insurance coverage that was, in some cases, expired on the day it was purchased. The suit also alleges that GMAC and Balboa charged borrowers inflated premiums that were as much as 14 times the market rate. According to Plaintiff’s attorney, Kai Richter, “The whole point of insurance is to protect against future risks. Forcing borrowers to buy expired insurance at inflated premiums is inexcusable.”
The Complaint alleges that GMAC force-placed a windstorm policy on Ulbrich’s property in March 2011, which was backdated for the period from October 1, 2009 to October 1, 2010, and charged Ulbrich almost $10,000 for this already-expired coverage. The lawsuit further alleges GMAC sent Ulbrich a renewal notice on the very same date, stating that “the windstorm insurance coverage we placed on your account has expired,” and then force-placed a second windstorm policy on her property in April 2011, which was backdated by more than six months and cost more than $9,600. According to the Complaint, Ulbrich’s mortgage payments skyrocketed from $1,227.52 per month to $2,695.59 per month after GMAC purchased this backdated coverage, due to an alleged “shortage” in her escrow account. GMAC is now threatening to foreclose on her home because she cannot afford the increased payments, even though she previously was current on her mortgage.
“It is outrageous to drive homeowners into foreclosure by force-placing backdated insurance coverage on their property and charging them inflated premiums for expired coverage,” said Richter. “GMAC received billions of dollars in bailout money from taxpayers, and this is no way to say ‘thank you,’” continued Richter.
In her class action Complaint, Ulbrich seeks relief on behalf of herself and other similarly-situated GMAC borrowers across the country. Ulbrich asserts claims against GMAC for breach of contract, breach of the duty of good faith and fair dealing, breach of fiduciary duty, unjust enrichment, and violation of the Florida Deceptive and Unfair Trade Practices Act. In addition, Ulbrich also asserts an unjust enrichment claim against Balboa, which allegedly accepted premiums for backdated policies and allegedly paid a kickback to GMAC in return.
The case is entitled Ulbrich v.GMAC Mortgage, LLC and Balboa Insurance Services, Inc., No. 0:11-cv-62424 (S.D. Fla.). Plaintiff is represented by Kai Richter, Michelle Drake, and Timothy Selander from Nichols Kaster, PLLP. Nichols Kaster has offices in Minneapolis, Minnesota and San Francisco, California, and is currently pursuing several other cases against major banks for wrongfully force-placing insurance on borrowers, 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), and U.S. Bank, N.A.. Additional information is located at http://www.nka.com or may be obtained by calling Nichols Kaster, PLLP toll free at (877) 448-0492.