A Pennsylvania federal judge gave his initial blessing Tuesday
to a $34 million settlement of a class action alleging Bank of
America Corp.'s Countrywide Financial Corp. paid kickbacks to its
reinsurer, CW Reinsurance Co.
Judge Juan R. Sanchez of the U.S. District Court for the Eastern
District of Pennsylvania granted preliminary approval to the
settlement, which stipulated that the lead class counsel's request
for attorneys' fees can't exceed 27.5 percent of the settlement
The class includes all residential mortgage borrowers whose loans
closed between December 2005 and December 2008 and were reinsured
by Countrywide affiliate CW, formerly known as Balboa Reinsurance
Co., according to court documents.
The class alleged that reinsurance premiums that Countrywide paid
to CW were actually kickbacks in exchange for referring mortgage
insurance business in violation of the Real Estate Settlement
Procedures Act. Countrywide and CW both denied any wrongdoing.
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