[November 30, 2012]

Florida Woman's Force-Placed Insurance Lawsuit Against CitiMortgage Allowed to Proceed with the Assistance of Gilman Law LLP

A Florida judge has rejected CitiMortgage's Motion to Dismiss a lawsuit filed by an 89-year-old woman who claims to be the victim of the bank's alleged predatory force-placed insurance practices. Celeste Coonan had been forced to pursue a pro se action against CitiMortgage, which in addition to its Motion to Dismiss, CitiMortgage had also filed a Motion for Sanctions against her for proceeding with her lawsuit. Gilman Law LLP, which recently entered an appearance in the case on behalf of Ms. Coonan, successfully defended against both the Motion to Dismiss and Motion for Sanctions filed by CitiMortgage. Judge Spencer Eig of the Eleventh Judicial Circuit of Miami-Dade County, Florida, allowed Ms. Coonan's force-placed insurance lawsuit against CitiMortgage to proceed on recent charges, with the assistance of Gilman Law LLP. (Case No. 11-185185-CA (News - Alert))

According to her lawsuit, from 2009 through the present, CitiMortgage has force-placed three types of insurance on Ms. Coonan, wind insurance, flood insurance, and hazard/fire insurance via a company owned by Assurant, Inc. Each time CitiMortage force-placed Ms. Coonan with insurance, she would provide proof that she already carried the required coverage. While Citi would dispute the coverage, the bank would eventually remove the charges. However, after several occurrences of this type, Ms. Coonan filed a complaint with the Florida Attorney General, which Ms. Coonan alleges promoted CitiMortgage to review her account. Following its review, the bank determined that there had in fact been a brief lapse in coverage, and unilaterally charged several thousand dollars to her escrow account. Since then, CitiMortgage has been sending letters to Ms. Coonan threatening to foreclose on her home if she does not pay the escrow charges.

According to Ken Gilman, Managing Partner with Gilman Law LLP, Ms. Coonan's limited financial circumstances had forced her to pursue her claim against CitiMortgage on a pro s basis, without the benefit of legal counsel.

"We believe CitiMortgage's Motion for Sanctions against Ms. Coonan was an attempt to intimidate her into dropping her lawsuit, and it's questionable that the bank would have done so had she had access to legal counsel. We look forward to helping Ms. Coonan pursue her claim against the bank, and are committed to doing everything necessary to ensure her legal rights are protected," Mr. Gilman said.

About Force-Placed Insurance

Force-placed insurance is placed on a property owner in cases where they have allegedly failed to maintain insurance as required by the terms of the mortgage contract. According to the findings of a recent investigation conducted by the New York Department of Financial Services, rates for force-placed insurance can be as much as ten times the cost of normal homeowner's insurance, while offering less protection to the homeowner. Among other things, the investigation revealed that two companies, Assurant, Inc. and QBE Insurance, control about 90% of the market for force-placed insurance. The New York probe also uncovered a number of questionable practices that raised serious "red flags and concerns," including: a lack of competition in the market; the fact that force-placed insurance has become both a major profit center for both banks and insurers; and "tight relationships between banks, their subsidiaries and insurers." As much as 15 percent or more of premiums collected by force-placed insurers flow to the banks through insurance agents affiliated with the banks, state investigators found. (http://www.dfs.ny.gov/insurance/hearing/fp_052012_testimony.htm)

Recently, regulators have begun to take steps to rein in the force-placed insurance market. The Consumer Financial Protection Bureau has proposed new rules to crack down on mortgage servicers' use of force-placed insurance. In addition to New York, California and Florida are actively investigating the force-placed insurance market. The recently agreed-upon state Attorneys General National Mortgage Settlement also limits the ability of servicers to accept payments from service providers. (http://www.cnbc.com/id/48599389/Regulators_May_Crack_Down_on_Mortgage_Insurance)

If you believe CitiMortgage or another mortgage servicer engaged in unfair practices when imposing a force-placed insurance policy on your property, it is vital to retain legal help now. The consumer protection lawyers at Gilman Law LLP are offering free force-placed insurance lawsuit evaluations to property owners. To discuss your legal options, please contact Gilman Law LLP by filling out our online form, or CALL TOLL FREE (888) 252-0048.

About Gilman Law LLP

Gilman Law LLP, a leading national consumer protection law firm, has been recognized for delivering successful results to their clients across a broad range of claims stemming from consumer product injury, mass tort, and class action lawsuits. For over 33 years, the Gilman Law LLP team of highly experienced lawyers has earned renown for tireless work on behalf of their clients on many of today's most challenging and important legal issues.

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