No Federal Jurisdiction for SunTrust Lawsuit

     WASHINGTON (CN) – A class action that accuses SunTrust Banks of taking kickbacks from mortgage insurers should play out in D.C. Superior Court, a federal judge ruled.
     U.S. District Judge Barbara Rothstein also rejected denied SunTrust’s motion to dismiss.
     The class had moved to remand after Suntrust removed the case from Superior Court in May 2011.
     About a month earlier, the same day that the present case was filed, the class had voluntarily dismissed a federal complaint that made similar claims.
     D.C. Superior Court is the proper venue because the district’s Consumer Protection Act encapsulates the complaint’s Truth in Lending Act claims, Rothstein found.
     SunTrust Banks allegedly steered homebuyers to private mortgage insurance companies that pay the banking giant kickbacks for the business. The class says that the deals “reap millions of dollars in referral fees” for the bank, and “over time artificially inflate the cost of mortgage insurance.”
     The bank and its subsidiaries refer borrowers to private mortgage insurance companies in exchange for a portion of the borrowers’ monthly premiums, lead plaintiffs Archie and Violet Moses say.
     In most instances, consumers were not even aware of the identity of the mortgage insurer, leaving them unable to negotiate insurance rates, according to the complaint.
     The class seeks compensatory and punitive damages for fraud and conspiracy.

%d bloggers like this: