Berger & Montague filed a class action complaint in
the United States District Court for the District of Rhode Island
alleging RBS Citizens, N.A., d/b/a CCO Mortgage, Citizens Bank, and
Charter One (collectively "Citizens Bank"), requires certain
borrowers to purchase flood insurance in excess of what their
mortgage contract and federal law require. The parties have
reached a settlement.
When a lender originates or services a home equity or mortgage
loan for customers who pledge their home or condominium unit
located in a "Special Flood Hazard Area" as collateral, federal law
requires proof of adequate flood insurance as a condition of
obtaining the loan.
Subsequent to closing, Citizens Bank sends some customers form
notices informing them that their flood insurance is inadequate
under federal law and/or the mortgage contract. Citizens Bank
requires that these customers purchase flood insurance that exceeds
the bank's security interest in the home or, alternatively, exceeds
the replacement cost of the home. Citizens Bank misrepresents that
the flood insurance requirement is in line with federal laws for
homeowners in "Special Flood Hazard Areas." Citizens Bank then
continues to send a series of letters asking for more information
and explaining the bank's intention to force-place flood
Ultimately, Citizens Bank purchases the flood insurance policy
at a high premium and assesses the premium costs on the homeowner.
The cost of the policy is either deducted from the home equity
account or added to the mortgage balance. As a result, the
customers have no choice but to pay the premiums.
If you obtained a home equity loan or mortgage from
Citizens Bank or your mortgage loan is serviced by Citizens Bank
and you were forced to buy flood insurance by Citizens Bank even
though you were covered by an adequate flood insurance policy, you
may be entitled to financial compensation. For
questions about this case against Citizens Bank, please contact Shanon J.
Carson at (215) 875-4656 or by email at email@example.com. Further
information is set forth below.