A federal court in Pennsylvania will hear further arguments from a group of plaintiffs in that state and in California who allege that their mortgage broker entered into a captive reinsurance agreement with their mortgage insurance provider and accepted illegal kickbacks. The case, Thurmond v. SunTrust Banks Inc. (U.S. District Court, E.D. Pennsylvania, No. 11–1352), concerns RESPA Section 2607, the portion of the statute that prohibits kickbacks and unearned fees.
At the heart of the case is the plaintiffs’ decision to file suit more than three years after they were notified of the alleged captive reinsurance scheme — exceeding the one-year statute of limitations on RESPA Section 2607 claims. After hearing the plaintiffs’ arguments and the defendants’ motion to dismiss, the court noted that it was troubled by the plaintiffs’ equitable tolling defense, but said because it cannot currently make a necessary factual determination, it will permit discovery on the issue.
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