For the second time in two years, private mortgage insurers are facing the possibility of an overhaul of their industry, this time in the form of a lawsuit charging that the companies illegally courted lenders with cut-rate services funded by premiums charged to homebuyers.

The lawsuit, filed in U.S. District Court in Augusta, Ga., seeks class action status and claims that services provided by insurers to lenders, such as contract underwriting, pool insurance, and captive reinsurance, amount to kickbacks for referrals of business in violation of the Real Estate Settlement Procedures Act.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.