In a huge setback for Countrywide Financial Corp., a federal appeals court has revived a national class action brought by homebuyers who accused the lender of concocting a kickback scheme in which buyers were required to purchase mortgage insurance from one of a handful of companies that in turn took out reinsurance policies from one of Countrywide’s wholly owned subsidiaries.
A lower court had dismissed the case on standing grounds after finding that the buyers could never show they had been “overcharged” and therefore had no right to sue under the Real Estate Settlement Procedures Act.
