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Goldman, Others Targeted In Force-Placed Insurance Suit

Posted: January 28, 2013
By: Juan Carlos Rodriguez
Source: Law360
Practice Areas: Consumer Protection, Insurance & Financial Products & Services

Law360, New York (January 28, 2013, 1:32 PM ET) -- Goldman Sachs Group Inc., Litton Loan Servicing LP and Ocwen Financial Corp. were hit Wednesday with a proposed class action alleging they schemed to require mortgage customers to buy force-placed insurance and took kickbacks from insurers.

Jimmy and Jacqueline Lyons say the defendants derived improper financial benefits by imposing force-placed insurance policies on consumers' properties, some of which were already covered by homeowners insurance policies.

The companies also improperly charged residential borrowers for the cost of procuring the insurance from insurance agents, but some of that cost was returned, transferred or paid to Litton and its related entities, the complaint says.

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