NEW YORK, May 9, 2012 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP announced today that it is investigating potential class action claims against Wells Fargo Home Mortgage in connection with a scheme to improperly inflate the cost of force-placed hazard insurance.
To protect the lenders' interest in secured property, mortgage loan contracts require the borrower to maintain specified levels of hazard insurance. If the borrower's coverage lapses, the lender is entitled to purchase coverage for the home, "force place" it, and be reimbursed by the borrower for the cost.
Kirby McInerney is investigating whether Wells Fargo has procured kickbacks from its force-placed insurance providers in connection with the mortgage loans in its servicing portfolios. It is believed that the premiums paid by Wells Fargo to the providers are grossed up to include the dollar value of the kickbacks and, furthermore, that Wells Fargo's demands to borrowers for reimbursement are based on these inflated sums. The New York State Department of Financial Services is conducting an investigation of improper practices relating to force-placed insurance, including force-placed insurance charges that are inflated by kickbacks. It has issued subpoenas to Wells Fargo in connection with its investigation.
Kirby McInerney's investigation of Wells Fargo follows the law firm's recent filing, in the United States District Court for the Southern District of New York, of a class action lawsuit alleging similar misconduct on the part of GMAC Mortgage, LLC.
If you are a homeowner who has been charged for force-placed insurance by Wells Fargo or any other servicer, if you have information or would like to learn more about these potential claims, or if you wish to discuss these matters or have any questions concerning this announcement or your rights with respect to these matters, please contact Kirby McInerney LLP partner Mark Strauss at 212.371.6600 or at mstrauss@kmllp.com.
Kirby McInerney LLP is a New York‑based plaintiffs' law firm concentrating in securities, whistleblower, antitrust and consumer litigation. Additional information about the firm can be found at Kirby McInerney LLP's website at http://www.kmllp.com.