Republic Mortgage Insurance Corp. has agreed to pay a $100,000 penalty and stop providing allegedly illegal kickbacks to mortgage lenders as part of a proposed settlement with the Consumer Financial Protection Bureau.
The CFPB alleges that Republic Mortgage purchased unnecessary reinsurance to earn a profit for mortgage lenders in exchange for referrals, according to a complaint filed Friday with the United States District Court for the Southern District of Florida. The proposed consent order, filed with the same court, would prevent Republic Mortgage from entering into such arrangements for the next 10 years and require the company to make regular reports to the CFPB to ensure compliance.
"Kickbacks for mortgage insurance referrals are illegal, and can drive up costs for consumers seeking to buy a home," CFPB Director Richard Cordray said in a Friday press release. "The order announced today will put an end to this practice and require RMIC to pay a $100,000 penalty for violating the law."
A Republic Mortgage representative did not immediately respond to a call seeking comment.
The CFPB took similar actions against four mortgage insurers earlier this year, levying fines worth a total of $15.4 million.