The Consumer Financial Protection Bureau (CFPB) is calling for an end to what the Bureau claims to be illegal kickbacks paid by mortgage insurers to mortgage lenders in exchange for business. The mortgage insurance companies named in the actions are accused of providing the kickbacks to mortgage lenders by purchasing captive reinsurance that “was essentially worthless but was designed to make a profit for the lenders.”
This violation of federal consumer financial law may cost the mortgage companies named in the actions more than $15 million in penalties to the CFPB.
The CFPB filed the complaints and consent orders with the United States District Court for the Southern District of Florida. The orders to stop the alleged kickback arrangements will not be in effect until signed by the presiding judge.