A putative class of homeowners sued PNC Financial Services Group
Inc. and several insurers Friday in Pennsylvania federal court,
alleging a captive reinsurance scheme under which the lender
received kickbacks for referring its mortgage customers to the
In violation of the Real Estate Settlement Procedures Act of 1974,
the insurers paid PNC predecessor National City Corp. and its
affiliated reinsurer National City Mortgage Insurance Co. Inc.
payments in the form of purported reinsurance premiums and gave
National City an unlawful split of private mortgage insurance
premiums paid by customers that had been referred to the insurers
by National City entities, the complaint alleges.
As a result of this arrangement, NCMIC collected at least $219
million from private mortgage insurers as its share of borrowers'
private mortgage insurance premiums between the beginning of 2004
through the end of 2010, even though its actual share of paid
claims during this time was only $12 million, according to the
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