CFPB Charges Four Mortgage Insurers With ‘Improper Kickbacks’

13592_embezzle CFPB Charges Four Mortgage Insurers With 'Improper Kickbacks' The Consumer Financial Protection Bureau (CFPB) has announced enforcement actions against four mortgage insurance companies that the agency alleges were involved in ‘improper kickbacks’ that were paid to lenders in exchange for business.

The CFPB filed complaints and proposed consent orders against Genworth Mortgage Insurance Corp., Mortgage Guaranty Insurance Corp., Radian Guaranty Inc. and United Guaranty Corp. The CFPB claims that in exchange for kickbacks, the mortgage insurers received ‘lucrative business referrals’ from lenders.

The proposed orders require the four mortgage insurers to pay more than $15 million in penalties to the CFPB. In accordance with the proposed settlement, the four mortgage insurance companies have agreed to pay fines to the CFPB and adjust their business practices.

‘Illegal kickbacks distort markets and can inflate the financial burden of homeownership for consumers,’ says CFPB Director Richard Cordray. ‘We believe these mortgage insurance companies funneled millions of dollars to mortgage lenders for well over a decade. The orders announced today put an end to these types of arrangements and require these insurers to pay more than $15 million in penalties for violating the law.’

Shortly after the CFPB announced its actions, Genworth Mortgage Insurance Corp. issued a statement that noted the CFPB ‘did not make any findings or determinations that Genworth or any other company violated any law.’Â

‘Genworth agreed to settle this review so we can focus our resources on working with customers to help borrowers responsibly achieve and maintain homeownership, and to resolve the uncertainties inherent in such a review and any possible resulting litigation,’ said Rohit Gupta, president and CEO of Genworth U.S. Mortgage Insurance.


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