NEW YORK (TheStreet) -- Bank of America (BAC) and QBE Insurance Corp. have agreed to pay $228 million to settle claims that the two entities had been involved in a kickback scheme that inflated the cost of insurance that homeowners had been forced to buy, according to Reuters.
The settlement was reached in federal court in Miami and is the latest in a line of so-called "forced-place" insurance, or coverage set up by lenders to protect their interest in a property once a homeowner's insurance lapses. Mortgage agreements permit lenders to charge homeowners for insurance, but these lawsuits claim that banks take advantage of this by dumping the costs of kickbacks they received from insurance providers onto homeowners' laps.
QBE Insurance Corp. is part of QBE Insurance Group Ltd., the largest global insurer in Australia.
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TheStreet Ratings team rates BANK OF AMERICA CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate BANK OF AMERICA CORP (BAC) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."