The CFPB settles accusations against four private mortgage insurers that they improperly kicked back money to lenders.
Jim Puzzanghera, Los Angeles Times
Federal regulators are conducting an extensive investigation into an alleged mortgage insurance kickback scheme that pushed up costs for home buyers dating from the mid-1990s.
The Consumer Financial Protection Bureau, in disclosing its first action Thursday, said the investigation revolves around a scheme in which banks and other lenders required private mortgage insurers to seek backup insurance from lender-owned reinsurance companies.
The backup insurance essentially was worthless and amounted to an improper payment to the lender by the mortgage insurer to acquire new customers, consumer bureau officials said.