The Consumer Financial Protection Bureau's enforcement actions against four of the nation's largest mortgage insurers is only the beginning as the agency will probe an alleged widespread mortgage insurance kickback scheme that involves several lenders.
The four mortgage insurers were ordered to halt reinsurance deals with mortgage lenders and the companies must pay a fine of $15.4 million in civil money penalties.
"Yet the paltry size of the fines - combined with additional investigations and ongoing litigation involving borrowers, insurers and big banks alleged to have participated - suggests more enforcement activity is still on the way, including against lenders that were said to have received the reinsurance business. The scheme is estimated by some to have involved as much as $6 billion in kickbacks," writes American Banker's Joe Adler.
"The mortgage insurance business can be lucrative, and our investigation indicates that lenders sought to leverage their control over the business to capture some of those revenues for themselves," CFPB Director Richard Cordray said on a conference call with reporters.
The CFPB will continue to monitor the insurers.
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