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CFPB accuses another mortgage company of illegal kickbacks

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Mortgage Professional America | 30 Jan 2014, 06:18 AM Agree 0
The Consumer Financial Protection Bureau is accusing one of the biggest mortgage originators in the country of orchestrating a mortgage insurance kickback scheme that started as early as 1995
  • Tom | | 30 Jan 2014, 08:40 AM Agree 0
    This is a joke. The industry was complaining about this since its inception. As memory serves me, HUD actually looked at this and said it was OK. Personally, I thought it was a sham, but if a Regulator tells you its ok, how does another regulator look at it 18yrs later and say, NO. If we don't stop all this look back garbage, the industry will never move forward.
  • dave | | 30 Jan 2014, 08:42 AM Agree 0
    CFPB is out of control
  • David A Lewis | | 30 Jan 2014, 09:11 AM Agree 0
    A while back, my company, Select Mortgage, looked at a re-insurance arrangement with Triad. We had our attorneys go over the arrangement, because it involved, of all things, the MI companies setting up off-shore corporations for the re-insurance.
    Once the attorneys OK'd the paperwork, we ran the idea past one of our major correspondent counterparties at the time, RBMG/NetBank. The Manager of Secondary at RBMG told me that they would not accept mortgages so insured from us, because Triad was not on the FNMA list.
    As it turned out, FNMA had a re-insurance deal with some of the MI guys, and if your company was not on their list, (i.e. FNMA couldn't make money) they wouldn't allow the deal.
    So. Let's have the CFPB put their flashlight up Fannie's wazoo and see what kind of RE deals they were involved in early in the New Millenium.
    As I recall, the MI premiums for the Re-Insurance program did not vary one basis point from the rates quoted on the MI cards. I hope the Admin judge crushes the CFPB on the matter.
    David A.
  • Brad | | 30 Jan 2014, 09:12 AM Agree 0
    Is it fair when other originators are following the rules and not taking/receiving kickbacks? How could HUD have approved a mortgage company placing borrowers with a specific insurer in exchange for revenues from the inflated premiums borrowers paid on the policy - come on MAN? That is a blatent RESPA violation! It "steers" the consumer to a higher cost product in order for increased revenue. All from their "trusted" mortgage adviser. Not ethical and against the law!!!
  • TODD | | 30 Jan 2014, 09:14 AM Agree 0
    Can you say witch hunt?!!
  • TODD | | 30 Jan 2014, 09:54 AM Agree 0
    I agree with all sentiments....I am in the industry and have personally been affected by the bloated policies that they force upon homeowners with no prior knowledge. The CFPB is a joke and a good example of the overregulated in point,....compensation to lenders, "transparency", and the notion that all of these changes are in the best interest of the borrower!!
  • Diane Walz | | 30 Jan 2014, 10:57 AM Agree 0
    This is nothing new. Northwood Realty, West Penn Financial and Northwood Settlement Services are under one umbrella Everest Group and owned by the same people. The settlement company has just changed its name to avoid the new cost guidelines. They "encourage" agents to use those services and there are " bonus's paid to real estate brokers for business kept within the umbrella.
  • M. Scott | | 30 Jan 2014, 11:55 AM Agree 0
    I believe it really is about one thing. The big banks didn't like all the money that mortgage officers were fairly making so they created, with the help of our government, most of these new rules so that they could get away with underpaying hard working employees in the industry. Now, most mortgage officers are barely making minimum wage and the banks don't compensate their employees who once had the choice to leave!
  • JCRussell | | 30 Jan 2014, 12:18 PM Agree 0
    Not a attorney, but how can an admin judge from CFPB's Administrative Adjudication Div serve on this matter which is being brought forth by CFPB? The Prosecution, Judge and in this case, Jury are all under the CFPB's umbrella. Any attorneys out there please clarify.....
  • Thomas Morgan | | 30 Jan 2014, 12:20 PM Agree 0
    It looks like a kickback until there is a loss... on the policies or individual mortgages... Just ask AIG, for one, or Enron (remember them) about how reinsurance can go wrong.
  • Jeff T | | 31 Jan 2014, 07:25 AM Agree 0
    It's ok for government to ram a M.I. Down the borrorers' throat but not private industry. Hypocrisy. I chose MI based on best price option first, then underwriting.
  • Fred M | | 31 Jan 2014, 04:02 PM Agree 0
    HUD is the one who requested CFPB go in and investigate so I think there is more going on than the normal MI program offered in the early 2000's that most MI companies were offering. Just something to think about.
  • Silent Partner | | 24 Feb 2014, 12:14 PM Agree 0
    One should investigate the affiliated business arrangements PHH has with regards to Appraisers and etc.

    They own the Appraisal Company who hires the appraisers and take more of the money charged to the consumer than the appraiser does for the work. What else do you ask? How about affiliations with Title Companies as well???
  • Ron Armstrong | | 24 Feb 2014, 01:55 PM Agree 0
    As long as I have been involved in the financial market place it seem almost any and all Government interference, (Oops, involvement) has been counter productive to protecting the right of private enterprise as well as the consumer, ie; Dodd Frank, (what a joke!) as well as Sarbanes Okley. I seems to me the overall concussions is we would all be better off if the over reach of Big Government removed their collective heads from our backside and shoved it back up their own.

    Ron A
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