An embattled mortgage lender has been ordered to pay a $109 million penalty for orchestrating a massive mortgage insurance kickback scheme.
Consumer Financial Protection Bureau Director Richard Cordray denied an appeal by mortgage lender PHH Corp., concluding that the lender illegally referred customers to mortgage insurers in exchange for kickbacks. Cordray ordered PHH to pay $109 million to the CFPB for violating the Real Estate Settlement Procedures Act (RESPA).
Cordray held that PHH violated RESPA every time it accepted a kickback payment on or after July 21, 2008. The kickbacks took the form of mortgage reinsurance payments that mortgage insurers paid to a PHH subsidiary.
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