A proposed class of homeowners may continue with most of their claims that a mortgage lender, mortgage servicer, and three insurance companies conspired to overcharge them, a federal court said Dec. 27.

The plaintiffs’ breach of contract, civil conspiracy, Truth in Lending Act, Racketeer Influenced and Corrupt Organizations Act, and other claims survive dismissal, Judge Renée Marie Bumb wrote for the U.S. District Court for the District of New Jersey.

But tortious interference claims against the insurers fail because the homeowners didn’t allege the companies intended to interfere with the mortgage contracts, the court said.

Earl Gray Jr. took out a reverse mortgage from Financial Freedom Senior Funding Corp. on his home in Cinnaminson, N.J., but didn’t maintain required hazard insurance on the property. Financial Freedom charged him a $3,510 insurance premium.

Gray alleges what Financial Freedom represented as the cost of the insurance was actually the cost plus an “unearned commission” the company obtained through “interlocking agreements” with the insurer defendants.

Gray also alleges Financial Freedom took out excessive insurance coverage on the property and charged for unnecessary inspections.

He filed a class action against mortgage lender CIT Bank N.A.; mortgage servicer Financial Freedom; and insurance companies QBE Insurance Corp., QBE First Insurance Agency Inc., and MIC General Insurance Corp.

Roosevelt N. Nesmith in Montclair, N.J., represented the plaintiffs.

Greenberg Traurig LLP represented CIT Bank and Financial Freedom. Buckley Sandler LLP and Sill Cummis & Gross represented the insurance companies.

The case is Gray v. CIT Bank, N.A., 2018 BL 479951, D.N.J., No. 18-1520, 12/27/18.