CFPB Initiates Administrative Proceeding Against Mortgage Lender


Subsequent to its denial of a mortgage lender’s petition to set aside a civil investigative demand in 2012 (see October 2, 2012 Alert), the CFPB publicly announced that it had served Notice of Charges, initiating an administrative proceeding against the mortgage lender. According to the CFPB, between 1995 and 2009, the mortgage lender used mortgage reinsurance arrangements to solicit and collect allegedly illegal kickback payments and unearned fees, which resulted in consumers paying increased mortgage insurance premiums in violation of the Real Estate Settlement Procedures Act. The CFPB is seeking civil money penalties, a permanent injunction and victim restitution. If allowed by the hearing officer, the Notice of Charges will be available on the CFPB website after February 12, 2014. This, along with the CFPB’s previous settlements with mortgage insurers for alleged violations of RESPA’s anti-kickback provisions (see November 26, 2013 Alert), illustrates the range of enforcement measures available to the CPFB.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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