On April 19, a lawsuit was filed on behalf of a putative nationwide class of home buyers against a group of mortgage lenders, mortgage insurers and a reinsurer alleging a breach of the Real Estate Settlement Procedures Act of 1974 (“RESPA”). Citing an investigation by the Department of Housing and Urban Development, and two recent articles in American Banker magazine, the complaint alleges that the defendants were part of a wide-ranging scheme whereby major US mortgage lenders began to coerce mortgage insurers into cutting the banks in on $6 billion of insurance premiums while assuming little or no risk. The complaint describes alleged “kickbacks” paid by private mortgage insurers to a reinsurer affiliated with defendant ABN AMRO Mortgage. Interestingly, plaintiffs claim that the alleged scheme violates RESPA and entitles the plaintiff class to statutory damages and restitution of all allegedly improper payments without regard to whether the plaintiffs were actually overcharged for their private mortgage insurance. The case is assigned to Judge Rakoff.