Banks know all too well that many people are behind on their mortgage payments right now. It is just plain wrong for them to be imposing additional burdens on homeowners in the hope of earning a quick buck for their affiliates.
Los Angeles, CA (PRWEB) May 17, 2011
On May 13, 2011, Plaintiff Kent Farmer filed a class action lawsuit against Bank of America and Balboa Insurance Company in U.S. District Court in the Central District of California. The lawsuit alleges that Bank of America routinely “force places" exorbitantly priced Balboa hazard insurance on borrowers with lapsed hazard insurance.
According to the complaint, Bank of America has a pre-existing agreement with its affiliate insurer, Balboa, whereby Balboa agrees to issue forced placed insurance at a premium cost to homeowners. The Balboa insurance is often issued months after the borrower’s original insurance lapsed. Bank of America allows Balboa to backdate the policies to the date of the lapse itself, forcing homeowners to insure against the past.
According to Farmer’s lawyer, E. Michelle Drake, “Backdating runs counter to the whole idea of insurance, which is to protect against future risks. We allege that, by routinely backdating policies and charging exorbitant prices for that backdated insurance, Bank of America and Balboa are abusing their customers and treating their mortgage agreements like blank checks.”
The class action complaint seeks relief on behalf of Farmer and other borrowers across the country, who have been similarly affected by Bank of America’s alleged conduct. The complaint asserts that Bank of America and Balboa committed fraud, breached their contracts with their customers, and were unjustly enriched by their unlawful practices.
“Banks know all too well that many people are behind on their mortgage payments right now. It is just plain wrong for them to be imposing additional burdens on homeowners in the hope of earning a quick buck for their affiliates,” said Drake. “Practices like this are bad for borrowers.”
The case is entitled Farmer v. Bank of America, N.A., et al., No. SA CV 11-739 (C.D. Cal.). Plaintiff is represented by Rebekah Bailey and E. Michelle Drake from Nichols Kaster, PLLP. Nichols Kaster has offices in Minneapolis, Minnesota and San Francisco, California. Additional information is located at http://www.NKA.com or may be obtained by calling Nichols Kaster, PLLP toll free at (877) 448-0492.