WASHINGTON (6/8/15)--A New Jersey-based mortgage lender will be required to pay $109 million to the Consumer Financial Protection Bureau (CFPB) as a result of illegally referring consumers to insurers for kickbacks.
The decision, announced last week, involved the first-ever appeal of a CFPB administrative enforcement proceeding.
CFPB Director Richard Cordray’s decision relates to a November 2014 verdict from an administrative law judge that PHH Corp. violated the Real Estate Settlement Procedures Act (RESPA).
It was alleged that PHH accepted kickbacks in the form of mortgage reinsurance premiums that mortgage insurers paid to a PHH subsidiary after July 2008.
Cordray’s decision upheld the ruling that PHH violated RESPA with each acceptance of a kickback payment, and the bureau issued a final order requiring PHH to pay $109 million. This is the total of reinsurance premiums it received.
The order also bars PHH from violating the provision of RESPA that forbids kickbacks. It also prohibits PHH from referring any consumer to a provider of a real estate settlement service that has agreed to purchase any service from, or make any payment to, PHH.