Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau

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Showing 5 posts in Insurance Coverage.

Surge in Subprime Auto Lending Prompts Government Concerns

Auto finance companies have witnessed a surge in lending activity, a sign that the economy is gradually improving. However, government agencies are identifying and taking action to address increased lending at high interest rates to borrowers with poor credit, similar to lending practices that were the basis for subprime mortgage lending less than a decade earlier. Read More ›

Bank Insurer Challenges Insurability of Restitution in Settled Class Action

Posted on September 16, 2015 by Kevin Connor

Indian Harbor Insurance Company, relying on the established legal principle that insurance contracts exist to avert loss and not to permit gain, is appealing a federal court’s ruling that it must indemnify U.S. Bancorp’s losses in a settled class action. Indian Harbor’s appeal is pending before the United States Court of Appeals for the Eighth Circuit, whose ruling on the issue may dramatically affect the tenor of future settlement negotiations in suits alleging negligent or willful misconduct by banks.  Read More ›

President Announces Reduction in FHA Mortgage Insurance Premiums

In an effort to encourage first-time homebuyers, President Obama announced on January 7th that the Federal Housing Administration will reduce annual mortgage insurance premiums by 0.5% from 1.35% to 0.85%.  Under the announced plan, FHA will retain underwriting standards that were put in place following the economic downturn.  The White House estimates that this reduction means new home buyers would pay $900 less a year than they would without a change in the premiums.  Additionally, current homeowners who refinance into an FHA mortgage would also benefit from the change.

HUD Exceeded its Authority By Creating a Disparate Impact Rule for Homeowners Insurance

The U.S. District Court for the District of Columbia ruled this month that the Department of Housing and Urban Development (HUD) exceeded its authority under the Administrative Procedure Act by creating a disparate impact rule beyond the scope of the language in the Fair Housing Act (FHA). The case, American Insurance Association v. HUD, Case No. 13- cv-966, U.S. District Court, District of Columbia, addresses a HUD-created rule that prevented the pricing of homeowners insurance that has a disparate impact on minorities. Although the FHA bars disparate treatment and intentional discrimination toward minorities in housing practices, the FHA does not address disparate impact. In the housing context, the doctrine of disparate impact holds that practices in housing may be considered discriminatory and unlawful if they have a disproportionate adverse impact on individuals of a protected trait. Read More ›

Construction Lender Wins Coverage Dispute With Title Insurer—New 7th Circuit Decision

A recent ruling by the 7th Circuit found that a title insurer had a duty to defend the construction lender in a mechanic’s lien suit when the lender did not have an obligation to continue funding the developer after default. 

Home Federal Savings Bank v. Ticor Title Insurance Company, —F.3d—, 2012 WL 3871521 (7th Cir., Sept 6, 2012)

In Home Federal Savings Bank v. Ticor Title Insurance Company (Home Federal v. Ticor), a general contractor asserted that its mechanic’s lien had priority over Home Federal’s mortgage. Because Home Federal had refused to disburse the final payout to the defaulting developer, Ticor refused to defend Home Federal on the ground of an exclusion for claims “created, assumed or agreed to” by the insured. Read More ›