Business Law

The CFPB Takes Action against Mortgage Insurer for Alleged Kickback Arrangements

Today the Consumer Financial Protection Bureau (CFPB) filed a complaint and proposed consent order with the United States District Court for the Southern District of Florida against Republic Mortgage Insurance Company (RMIC) for allegedly paying kickbacks for mortgage insurance referrals.  CFPB Director Richard Cordray stated that kickbacks are illegal and “can drive up costs for consumers seeking to buy a home.”

The CFPB alleges that RMIC violated federal consumer financial law by providing kickbacks to lenders in exchange for referrals of mortgage insurance business by those lenders.  In the proposed settlement, RMIC has agreed to, among other items: (a) pay $100,000 in penalties; (b) be subject to monitoring by the CFPB and make reports to the CFPB; and (c) end the practice of entering into captive mortgage reinsurance arrangements with mortgage lender affiliates.  RMIC’s outstanding insurance claim obligations are being resolved under the supervision of the North Carolina Department of Insurance. 

View the consent order at: 
 http://files.consumerfinance.gov/f/201311_cfpb_consent-order_RMIC.pdf

View the complaint at:
http://files.consumerfinance.gov/f/201311_cfpb_complaint_RMIC.pdf

For more information, please contact Jennifer Duncan , General Counsel at ResortCom International, LLC (jduncan@resortcom.com). 

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