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Countrywide must face kickback suit

Posted: October 30, 2009
Source: The Boston Globe/Bloomberg News

WILMINGTON, Del. - Bank of America Corp.'s Countrywide unit must face a lawsuit alleging it orchestrated a kickback scheme for private mortgage-insurance premiums, an appeals court ruled, reversing a lower court's decision to dismiss the case.

Three Pennsylvania homeowners who obtained mortgages from Countrywide Home Loans in 2005 and 2006 sued, claiming the company overcharged for private mortgage insurance and violated real estate laws by interfering with the settlement process. A district court judge erred in dismissing the case, the US Court of Appeals in Philadelphia ruled Wednesday.

"Congress bestowed upon the consumer the right to a real estate settlement free from unlawful kickbacks and unearned fees,'' the appeals court said.

"We're evaluating the ruling and will respond to the court at the appropriate time,'' a spokeswoman for Bank of America said.

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