The Consumer Financial Protection Bureau on Thursday announcedenforcement actions against four mortgage insurance companies the bureau said violated federallaw by engaging in widespread kickbacks to lenders across the country.
|The four companies include Genworth Mortgage Insurance Corp., United Guaranty Corporation,Radian Guaranty Inc., and Mortgage Guaranty Insurance Corp.
|In exchange for the kickbacks, the CFPB said in a release, themortgage insurers received lucrative business referrals fromlenders. The CFPB will fine the four insurers more than $15 millioncollectively in penalties.
|“Illegal kickbacks distort markets and can inflate the financialburden of homeownership for consumers,” said CFPB Director RichardCordray. “We believe these mortgage insurance companies funneledmillions of dollars to mortgage lenders for well over adecade.”
|The kickbacks at issue in the CFPB's actions were paid tolenders through “captive reinsurance arrangements,” the bureausaid.
|In addition to the fines, the companies have agreed to end thekickbacks going forward and allow the CFPB to monitor compliancewith the order.
|The Office of Inspector General at the Department of Housing andUrban Development initiated the investigation of reinsurancepractices, and in July 2011, HUD's authority over the investigationtransferred to the new CFPB.
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