April 5, 2013
Law360 interviewed me in Lenders Face Hefty Fines in CFPB Mortgage Insurance Probe (paywall) about the recent $15 million settlement with four mortgage insurers. It reads in part:
The Consumer Financial Protection Bureau’s $15.4 million settlement Thursday with four mortgage insurers is just the first to come out of a probe into an alleged scheme to pay kickbacks to banks in exchange for business, and lenders caught up in the agency’s net are likely to get hit even harder, experts say.
In announcing the settlement, the CFPB made clear that it was looking closely at lenders and their role in the alleged kickback scheme, which the bureau said began in the 1990s. Implied in the CFPB’s statements is that the lenders were at the center of the enterprise, and that could mean that both bank and nonbank lenders could face a far stiffer penalty than the mortgage insurance firms paid, said Brooklyn Law School professor David Reiss.
“In the context of the overall markets that we’re talking about, $15 million is not even a rounding error. If this is for real, it’s going to have to be a larger settlement with the financial institutions that demanded the bribe,” he said.| Permalink