GMAC Insurance Scheme Bilked Homeowners, Suit Claims

Law360, New York (May 2, 2012, 12:38 PM EDT) -- GMAC Mortgage LLC was hit Monday with a putative class suit in New York alleging it received kickbacks from a hazard insurer that forced homeowners to obtain expensive policies, joining the ranks of top lenders to face such claims.

Plaintiff Landon Rothstein says GMAC bought force-placed insurance coverage for his Texas home from Balboa Insurance Co., which in turn paid kickbacks to GMAC. The kickbacks inflated GMAC’s premiums, the cost of which was passed on to Rothstein in the form of higher reimbursement charges, the suit claims....
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