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Citibank And MidFirst Bank Face Lawsuit Over Homeowner Flood Insurance Programs

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New York, NY: A nationwide class action alleging that Citibank and MidFirst Bank improperly force-place high-premium flood insurance policies on homeowners across the United States can proceed. The ruling was made on January 2, 2013, by Judge David N. Hurd of the United States District Court for the Northern District of New York. The ruling permits all of the plaintiffs' claims to proceed.

In their Complaint, plaintiffs Gordon Casey and Duane Skinner allege that Citibank and MidFirst Bank have a policy and practice of force-placing unnecessary flood insurance coverage above the amounts required by their borrowers' mortgage contracts and by federal law. Citibank, MidFirst Bank and their affiliates asked the Court to dismiss the case, asserting that the borrowers' mortgage contracts permit them to force-place high premium flood insurance coverage in amounts the banks deem necessary. However, the Court denied the defendants' motions to dismiss and decided that the plaintiffs' claims alleging breach of contract, unjust enrichment, breach of fiduciary duty, conversion, violation of the Truth in Lending Act, and violation of the New York Deceptive Practices Act can proceed.

"With respect to borrowers who live in federally designated flood zones, Citibank, MidFirst Bank, and other banks engaged in the loan servicing industry have engaged in a classic bait-and-switch, in which borrowers are informed of one set of flood insurance requirements at closing and then, later, the banks demand additional, unwarranted flood insurance coverage,"said Shanon Carson of Berger & Montague, P.C., one of the lead attorneys for the plaintiffs.

Through this scheme, Citibank and MidFirst Bank have harmed thousands of borrowers by force-placing unnecessary flood insurance at extraordinarily high prices, which often results in unwarranted fees and other charges. In addition, each time the banks require such insurance, they receive lucrative financial benefits from the insurance companies who place the flood insurance policies.

All US borrowers with mortgages serviced by Citibank and MidFirst Bank who have been forced to purchase flood insurance policies may be affected by the Court' decision.

Citibank And MidFirst Bank Force-Placed Flood Insurance Programs Legal Help

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Reader Comments

Posted by

on
We were being serve ed by cut mortgage who sold to midfirst... they sent us the same papers n the mail about flood onsurancw...just notifying us that has a added the flood insurance to our mortgage payment

Posted by

on
Citi required that I purchase flood insurance on my property or would force-place a policy on my mortgage. They bought a policy which I had to pay until I found my own flood insurance company. After investigation, it was determined that the property was not in a flood zone. I could not get refunded for my premiums.

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