This article discusses several aspects of a GMAC Mortgage Flood Insurance Lawsuit. In this article, we discuss how agents of GMAC mortgage flood insurance failed to protect plaintiffs’ personal property. We also examine how GMAC failed to renew an Allstate policy and allegedly engaged in kickbacks. Ultimately, we find that GMAC owed the plaintiffs property protection and should have remedied its breach of contract.
GMAC mortgage flood insurance settlement offer was low
A GMAC mortgage flood insurance settlement offer was very low in light of the evidence. The company did not renew the policy when it was due and failed to pay the premiums. GMAC failed to renew the policy expired, but the plaintiffs’ escrow funds were sufficient for flood insurance premiums. This fact led to the settlement offer. GMAC did not have adequate flood insurance coverage on their policy. GMAC’s failure to renew the policy violated the escrow contract.
In March 2001, William and Lisa Monahan, who had purchased a residential property in Pittsford, New York, received a mortgage from GMAC. GMAC’s representative had explained the mortgage requirements to the plaintiffs. The plaintiffs’ property was in a flood zone and the lender had required them to purchase flood insurance. They purchased the insurance from Allstate and took the insurance binder to the closing.
GMAC failed to renew the Allstate policy
Ultimately, the case settled on the basis that GMAC breached its contractual duty to maintain an insurance policy. The policy named the plaintiffs as first-party insurers and the breach was so obvious, that it did not merit jury consideration. GMAC admitted that it knew about the lapsed policy, but it did nothing to remedy it. However, it failed to renew the policy and did not provide adequate remediation.
The plaintiffs alleged that GMAC breached its duty of good faith and fair dealing by failing to pay premiums for flood insurance that was mandatory for new home purchases. In addition to the breach, the court found that GMAC failed to renew the policy, despite a notice sent to homeowners. The court held that GMAC lacked an adequate explanation for the nonrenewal of the policy.
Kickbacks charged against GMAC
In a recent decision, U.S. District Judge Alison J. Nathan upheld a class action against Balboa Insurance Co., a lender, and ithe nsurance company. The complaint alleges that Balboa paid kickbacks to GMAC Mortgage LLC in exchange for accepting force-placed insurance policies. The lender also received free mortgage tracking services from an affiliate of Balboa, which constituted a kickback from Balboa.
The court found that the plaintiffs made factual, detailed, and precise allegations. They based their allegations on similar cases pending in federal courts throughout the country, investigations by the New York State Department of Financial Services, and the Defendants’ public filings. In addition, they have presented reliable evidence of industry-wide practices and ASIC kickbacks to lenders. These findings are significant because the allegations were based on actual transactions and were not invented by the plaintiffs.
