Thursday, April 4, 2013

Fined

"For more than a decade, four of the nation’s largest mortgage insurers paid millions of dollars in kickbacks to home lenders in exchange for business, raising insurance prices for consumers, the Consumer Financial Protection Bureau said Thursday.

The consumer watchdog agency fined Genworth Mortgage Insurance Corp., United Guaranty Corp., Mortgage Guaranty Insurance Corp. and Radian Guaranty Inc. a total of $15.4 million for an alleged scheme that the bureau said was a common practice in the lead-up to the nation’s housing meltdown.

“Illegal kickbacks distort markets and can inflate the financial burden of homeownership for consumers,” CFPB director Richard Cordray said.
 
Lenders typically require homebuyers who cannot afford a 20 percent downpayment on a house to buy mortgage insurance to offset the risk of default. The lender, not the borrower, selects the mortgage insurance company."

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