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PHH ordered to pay $109 million over kickback scheme

mpamag.com | June 10, 2015

By Ryan Smith

An embattled mortgage lender has been ordered to pay a $109 million penalty for orchestrating a massive mortgage insurance kickback scheme.

Consumer Financial Protection Bureau Director Richard Cordray denied an appeal by mortgage lender PHH Corp., concluding that the lender illegally referred customers to mortgage insurers in exchange for kickbacks. Cordray ordered PHH to pay $109 million to the CFPB for violating the Real Estate Settlement Procedures Act (RESPA).

Cordray held that PHH violated RESPA every time it accepted a kickback payment on or after July 21, 2008. The kickbacks took the form of mortgage reinsurance payments that mortgage insurers paid to a PHH subsidiary.

Cordray’s order requires the company to pay $109 million – all the reinsurance premiums it received on or after July 21, 2008. It also prohibits PHH from referring any consumer to a provider of a real estate settlement service if the provider has agreed to purchase any service from – or make any payment to – PHH, and if that purchase or payment is triggered by the referral.

PHH has the option to file an appeal in federal court within 30 days.

PHH is no stranger to legal woes. In July of last year, the company was ordered to pay $16 million to a California man in a mortgage modification fraud case. It has also been investigated by the U.S. Attorney’s Office for allegedly overcharging the government for foreclosure expenses on federally backed mortgages.


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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