The Consumer Financial Protection Bureau said yesterday that it has fined four mortgage insurance companies a total of $15.4 million for allegedly engaging in widespread kickback arrangements with mortgage lenders in exchange for business.
The bureau alleged that the four firms -- Genworth Mortgage Insurance Corp., United Guaranty Corp., Radian Guaranty Inc. and Mortgage Guaranty Insurance Corp. -- “provided kickbacks to … lenders by purchasing captive reinsurance that was essentially worthless but was designed to make a profit for the lenders.”
Under the proposed settlement, which must still be approved by a federal district court, the companies are prohibited from entering into any mortgage reinsurance arrangements for at least 10 years. The four firms neither admitted nor denied the CFPB’s allegations in agreeing to the settlement. Read the CFPB press release.