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PHH accused of taking kickbacks from mortgage insurers

  • The CFPB alleges PHH Corp. (PHH -2.5%) over 15 years collected up to 40% of premiums paid by consumers to mortgage insurers - "hundreds of millions in kickbacks." The company worked it, says the CFPB, by pressuring the insurers to purchase reinsurance from PHH. Those fees - rather than transferring risk - were kickbacks in exchange for the original referral, says the agency.
  • PHH: "We believe the CFPB's allegations grossly mischaracterize the legitimate business activities of our mortgage reinsurance subsidiary."
  • The case will be handled by an administrative law judge.
  • Last year, the CFPB reached settlements with five mortgage insurance companies totaling $15.5M over alleged kickbacks.
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