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With dozens of similar cases pending around the country, judges may look to that ruling in favor of the lender.
A Michigan judge has ruled in favor of the lender in what appears to be the first judicial decision in a class-action lawsuit over a mortgage banker's obligation to notify borrowers when they no longer need private mortgage insurance.
Judge Paul Sullivan, of the Circuit Court for the County of Kent, ruled that the mortgage contract provides that PMI can be required for the life of the loan unless termination is agreed to by the lender and that no duty to notify is provided for in the mortgage.
In the case, borrower Jill May alleged that Grand Rapids, MI-based Old Kent Bank and Trust Co. collected premiums for private mortgage insurance well past the time such insurance might reasonably be warranted, and without disclosing to borrowers that such coverage was no longer required. In addition, she argued that Old Kent Bank should return the PMI premiums collected from her on the mortgage that it owns and services.
Old Kent Bank denied that it had any legal duty to disclose such information and held that there was...