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The CFPB Takes Action Against Mortgage Insurer to End Illegal Kickbacks to Lenders

Republic Mortgage Insurance Corporation to Pay $100,000 Fine and Halt Illegal Activity

WASHINGTON, DC — The Consumer Financial Protection Bureau (CFPB) today took action against Republic Mortgage Insurance Corporation (RMIC), for allegedly paying illegal kickbacks to mortgage lenders in exchange for business. The CFPB filed a complaint and proposed consent order against RMIC to stop these practices, which have been prevalent for more than 10 years. The proposed order will require RMIC to pay a $100,000 penalty to the CFPB, and follows four similar actions announced earlier this year.

“Kickbacks for mortgage insurance referrals are illegal, and can drive up costs for consumers seeking to buy a home,” said CFPB Director Richard Cordray. “The order announced today will put an end to this practice and require RMIC to pay a $100,000 penalty for violating the law.”

In today’s filing, the CFPB alleges that RMIC violated federal consumer financial law by engaging in widespread kickback arrangements with lenders across the country. The CFPB believes that RMIC provided kickbacks to mortgage lenders by purchasing captive reinsurance that was essentially worthless but was designed to make a profit for the lenders. The kickbacks were in exchange for referrals of private mortgage insurance business from the lenders.

RMIC is currently under administrative supervision with the North Carolina Department of Insurance to help it resolve its outstanding insurance claim obligations through a court-approved corrective plan.

Enforcement Action

In accordance with the proposed settlement, RMIC has agreed to:

  • End the practice: The proposed order would prevent the RMIC from engaging in this practice going forward. The proposed order prohibits RMIC from entering into any new captive mortgage reinsurance arrangements with affiliates of mortgage lenders, and from obtaining captive reinsurance on any new mortgages, for a period of ten years. As pre-existing reinsurance arrangements come to a close, RMIC will forfeit any right to the funds not directly related to collecting on reinsurance claims. The proposed order will also prohibit RMIC from paying illegal kickbacks or otherwise violating the Real Estate Settlement Procedures Act. Any violation of these prohibitions could result in additional fines.
  • Payment of $100,000 in penalties: The penalty amount reflects a number of factors, including that RMIC is currently under administrative supervision with the North Carolina Department of Insurance due to its inability to honor its payment obligations in full.
  • Compliance monitoring and reporting: RMIC will be subject to monitoring by the CFPB and required to make reports to the CFPB in order to ensure their compliance with the provisions of the order.

The proposed Consent Order has been filed with the United States District Court for the Southern District of Florida court and will have the full force of law only when signed by the presiding judge. The Bureau files a complaint when it has reason to believe that the law has been or is being violated, and it appears to the Bureau that an enforcement action is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law.

A copy of the order entered by the court is available at:

The full text of the complaint is available at:

Updated on November 5, 2015 with revised consent order

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit