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Class Action Accuses Wells Fargo Bank|Of Taking Kickbacks For Mortgage Insurance

PHILADELPHIA (CN) - Wells Fargo Bank and its wholly owned subsidiary, North Star Mortgage Guaranty Reinsurance Co., violate lending laws by conspiring to receive kickbacks from private mortgage insurers through "captive reinsurance arrangements," a class-action complaint claims in Federal Court. Plaintiffs claim Wells Fargo made $400 million from 1999-2006 "by arranging for the private mortgage insurer(s) to pay an excessive portion of borrowers' private mortgage insurance premiums to North Star in the form of purported reinsurance premiums" while paying "zero" in claims. See complaint.

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