US Bank Hazard Insurance Charge on Redeemed Property Class Action

In some states, homeowners who undergo foreclosure have a limited amount of time in which they can buy back their properties. The complaint for this class action alleges that when these buybacks take place with a property purchased by US Bank, NA, US Bank charges them for a full year of hazard insurance, even if the property was only in US Bank’s possession for less than three months.

The Nationwide Class for this action is all residents of the US who redeemed a property bought in foreclosure by US Bank and, in connection with that redemption, reimbursed US Bank for property insurance premiums that were not prorated to reflect the length of the period during which US Bank held the property. There is also a Kansas Subclass, which is similar but covers redeemed properties located in Kansas.

In Kansas, the period of time during which people may buy back homes lost to foreclosure depends on how much of the original loan the people paid back. If they have paid back less than a third, they have up to three months to redeem their former home. If they have paid back more than a third of the loan, they have up to twelve months to redeem the property.

To redeem the property, they must pay the sales price of the property plus certain costs incurred by the purchaser during the period allowed for redemption, such as taxes and insurance premiums.

In April 2010, US Bank foreclosed on a home owned by Kimberly Pierce. Her redemption period was fixed at three months. The property was sold at auction and US Bank bought it for $25,000. Pierce assigned her redemption rights to the plaintiffs in this case, Dennis and Charlotte Kehler.

US Bank filed a Statement of Additional Expenses with the court on August 19, 2010. It included $2,532.95 for hazard insurance. On October 1, 2010, it filed another such statement, this time including $1,239.24 for hazard insurance. This adds up to $3,772.19 for hazard insurance.

When the Kehlers went to redeem the property, US Bank told them they had to pay the $25,000 sale price, $276.25 for accrued interest, and $3,772.19 for hazard insurance. They paid the amount, but the complaint alleges that the price of the hazard insurance was for a full year of coverage and that US Bank could have cancelled it, or did cancel it, and obtained a refund when the home was redeemed.

The complaint points out that the lawyers representing US Bank in the foreclosure proceedings was the one representing it in other such proceedings, including one where, the complaint alleges, “the judge specifically ordered the foreclosing lender to prorate the cost of hazard insurance to the actual duration of the redemption period.”

The counts include unjust enrichment, fraudulent misrepresentation, negligent misrepresentation, and fraud by silence.

Article Type: Lawsuit
Topic: Real Estate

Most Recent Case Event

US Bank Hazard Insurance Charge on Redeemed Property Complaint

September 30, 2020

In some states, homeowners who undergo foreclosure have a limited amount of time in which they can buy back their properties. The complaint for this class action alleges that when these buybacks take place with a property purchased by US Bank, NA, US Bank charges them for a full year of hazard insurance, even if the property was only in US Bank’s possession for less than three months.

US Bank Hazard Insurance Charge on Redeemed Property Complaint

Case Event History

US Bank Hazard Insurance Charge on Redeemed Property Complaint

September 30, 2020

In some states, homeowners who undergo foreclosure have a limited amount of time in which they can buy back their properties. The complaint for this class action alleges that when these buybacks take place with a property purchased by US Bank, NA, US Bank charges them for a full year of hazard insurance, even if the property was only in US Bank’s possession for less than three months.

US Bank Hazard Insurance Charge on Redeemed Property Complaint
Tags: Extra Charges, Foreclosure Redemption, Real Estate